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Moribund Investments of Southeast: Still no hope of recovery

By  Lawrence Njoku, Southeast Bureau Chief
18 March 2018   |   3:08 am
If there is a serious challenge confronting the Southeast and which appears to have defied human solutions, it is how to revitalise moribund industries established during Michael Okpara’s administration. These industries, which were the toast of the former eastern region, owing to the volume of business they generated, the number of workers they absorbed and…


If there is a serious challenge confronting the Southeast and which appears to have defied human solutions, it is how to revitalise moribund industries established during Michael Okpara’s administration.

These industries, which were the toast of the former eastern region, owing to the volume of business they generated, the number of workers they absorbed and revenues that went into government’s coffers, have become a shadow of their former selves, as they lie in ruins.

Although they have become a source of political campaigns for politicians angling to occupy the seat of power, investigations show that successive administrations have not made any concrete policy on how to resuscitate the industries.

Rather, in the guise of privatising them, they have only succeeded in embroiling them in legal tussles.

Indeed, since activities ceased in the industries, which include Golden Guinea Breweries and Modern Ceramics Industries located in Umuahia, Abia State, Nigercem at Nkalagu in Ebonyi State and the Hotel Presidential in Enugu, their condition has been deteriorating.

A visit to these industries revealed their decrepit state, and essential equipment vandalised. Some of the premises have become grazing reserves for cows, while others are home to rodents, dangerous animals, lunatics and men of the underworld.

With their terrible condition, it is hard to believe that these industries can ever be revived.

Although Abia State government under Governor Okezie Ikpeazu has attempted to reclaim and restore Golden Guinea and Ceramics Industries after they were concessioned by previous administrations, it is, however, not clear how soon this effort would get the outfits back on track.

Last week, Ikpeazu told journalists, while responding to a question on the state of the industries that as far as the industries were concerned, he “is like a helpless bystander.”

“I am like an Israelite, whose Ark is falling and I am forbidden from touching the Ark,” he said.

Explaining his handicaps and efforts he had put in since assuming office more than two years ago to revive the industries, he said the problem was that the factories were handed over to people who lacked financial abilities to resuscitate them, adding that the country’s economic situation, whereby exchange rate shot up drastically has also not helped matters.

He said: “Golden Guinea is in the hands of somebody. It has become a personal enterprise. We provided security and accommodation for the German engineers that came to rebuild it. I was virtually pampering them and spent close to 30 minutes daily with them at the factory.

Sometime in 2017, they assured me that I was going to enjoy Golden Guinea beer in December 2017, but that was not to be.

The company said dollar and exchange rate and what have you couldn’t let them get raw materials and they asked me to get help through the Vice President, so they could seek assistance from Bank of Industry and I did.

However, the good news is that they recently called me to say that our effort with the Bank of Industry is yielding result,” he said.

It was gathered that before this fresh challenge, installation of modern equipment was nearing completion. The production line capacity was improved from 24,000 bottles per hour to 48,000 per hour and would employ over 5,000 workers should it commence production.

Golden Guinea was shut in 2003, following a fire outbreak during Orji Uzor Kalu’s tenure. Kalu’s successor, Theordore Orji, had launched efforts to revive the place by setting up a committee to look into the problems and advise government.

Sources told The Guardian that Golden Guinea, which was into brewing, bottling and marketing of Golden Guinea larger beer, Eagle Stout, Bergedorf Premium beer and Bergedorf Malta, was facing financial difficulties that led to taking loans from some individuals, who are presently managing it, when the company was unable to pay the loan.

Modern Ceramics was shut in 1996, following inability to tackle production challenges arising from vandalisation of the production line. It was said to have been handed over to the Catholic Diocese of Umuahia on May 9, 2003, which in turn brought in UCL Resources and Investments Ltd. that renamed it UCL-Modern Ceramics Ltd.

“The Catholic Church was to use its contact in Italy to bring in experts, but they went and took a loan of N250m to rehabilitate and revitalise the place,” Ikpeazu explained. “That has been the source of the problem, because as I speak to you now, the interest on that money has accumulated to more than N1.5bn.

A banker with a new generation bank pressured the church into acquiring the facility. We have approached the court to pay and exit the church from the shylock facility and when that is realised, we will like the church to explore its Italian connection to make the company functional again. So, here again, I am a helpless bystander. Some of these things are quite touchy.”

He likened the industries’ fate to that of Enyimba Hotels in Aba built by the late Sam Mbakwe’s administration.

Ikpeazu noted that while Concord Hotel in Owerri, built at the same time with Enyimba Hotel has been serving humanity, that of Aba has been vandalised and inhabited by lunatics after it was sold by an administration to Aba Chamber of Commerce for N16m.

He said: “If you go to that building, you will discover that the kind of material used for construction was not something ordinary you can easily get from anywhere and this is what a government sold for N16m, instead of pulling resources to complete it.

All efforts by this government to recover the hotel have not been successful. At that time, many members of Aba Chamber of Commerce were owners of major hotels in Aba and they were not ready to allow that hotel to flourish.”

But even if the current administration’s efforts to save Golden Guinea and Modern Ceramics were to yield result in the future, it might not be possible for Hotel Presidential Enugu and Nigercem, Nkalagu in Ebonyi State.

The Presidential Hotel, Enugu
THE hotel, a replica of the one sited in Port Harcourt, Rivers State also by Okpara’s administration, deteriorated in 2009 during the administration of Sullivan Chime.

Unfortunately, while the one in Port Harcourt has stood the test of time and is flourishing, that of Enugu is the very opposite.

Comprising a four-storey building without a roof, windows and doors over grown with bushes, the Hotel Presidential, Enugu is less than five minutes drive to Enugu Government House. It is another public institution that has suffered government neglect and incompetent management.

The hotel, comprising 100 rooms with such recreational facilities as swimming pools, tennis courts and a nightclub, was a popular destination for Nigerians and foreigners some years back.

Many people, growing up in Enugu and other eastern states have fond memories of sumptuous Sunday lunch in the hotel’s restaurant, as well as attending functions in the grand ballroom.

It was gathered that at some point, government officials who occupied and held functions at the facility were not paying. Expectedly, this attitude soon started to take its toll.

Signs that the hotel was in deep trouble began during Chimaroke Nnamani’s administration, as the workers frequently went on strike over unpaid salaries, among other issues. But Sullivan Chime, who succeeded Nnamani decided to privatise the place after it went down and the workers disengaged.

Thus, by virtue of a joint agreement in September 17, 2013 entered into by Hotel Presidential on behalf of Enugu State government, E-Services Ltd. and Primeview Hotels, A 35-year concession was granted effective from October 1 2013 to renovate and operate Presidential Hotel, Enugu.

The proposed redevelopment concept, which Primeview claimed would cost over N4bn, involved reconfiguring and modernising such existing facilities as restaurants, conference rooms, outdoor swimming pool, four tennis courts, as well as increasing the rooms from 100 to 150.

Additionally, a family leisure centre was to be incorporated and the number of restaurants and others increased in line with requirements of the preferred hotel manager. The new management had proposed to award the main contract in the fourth quarter of 2015.

But rather than fulfil all these promises, the company, which took possession of the property in July 2013, had “auctioned” it to the highest bidder, while installing security personnel to man the property.

Apparently sensing that the deal between the previous administration and present managers would not benefit the state and having waited for the renovation work to commence to no avail, the Ifeanyi Ugwuanyi administration, which came on board in 2015, attempted to recover the hotel, when it listed and advertised it among the 13 state-owned assets slated for privatisation.

It was learnt that the government had also forcefully moved into the premises on October 30, 2017 with soldiers, mobile policemen and Civil defence corps to eject the private security men. It went further to barricade the entire premises.

Claiming ignorance of existing agreement, the state government said it took the action to safeguard the property and was ready to deal with any company that shows interest in it.

However, on December 11, 2017, the management of Primeview Hotels issued a caveat emptor, advising prospective investor(s) to “steer clear of Hotel Presidential, Enugu, as any investment therein would tantamount to buying a law suit.”

Nigercem, Nkalagu
THERE has not been any activity in this facility since September 2000, which was the last time cement was produced in the factory. The degeneration began from what was considered a temporary closure in response to workers’ protests over unpaid salaries arrears. By the time the then state governor, Dr. Sam Egwu, directed that the salaries be paid, disputes over leadership and administrative concerns had set in.

Following a series of failed efforts to address issues between management and staff, as well as depreciating facilities, the government mooted the idea of privatisation, as a way of improving efficiency and repositioning for greater productivity.

It was Eastern Bulkcem Company in Port Harcourt that won the bid and acquired 60 percent equity share, as its core investor in 2002. But between 2002 and May 2007, when Chief Martin Elechi’s administration came into power, nothing happened to indicate that the company was making a comeback.

Since resuscitating the cement company was one of his campaign promises, Elechi set up a seven-man Economic Advisory committee to among other things, articulate strategies for building a strong and vibrant private sector, as well as facilitate realisation of the state’s economic potentials. It was also to examine the viability of state-owned companies, especially Nigercem.

It was gathered that the committee’s findings, which advised that government bar Eastern Bulkcem from handling the revitalisation process, was stoutly resisted by the company. 

But Elechi’s government, which also convoked a judicial panel of inquiry, had revoked the certificate of occupancy of the land where the factory is located and issued an ultimatum to Eastern Bulkcem to quit the property.

A long tussle commenced that later saw Eastern Bulkcem relinquishing its majority shares to Ibeto Cement Company in Nnewi.

Appalled by the development, the government challenged it in court, asking that Ibeto be declared incompetent to handle resuscitation of the factory, aside being an intruder.

The matter lingered till after the 2015 elections that brought in Chief Dave Umahi as the governor.

It was gathered that based on the existing relationship between Umahi and Ibeto, he (Umahi) had directed withdrawal of the case to allow Ibeto revamp the industry.

However, since then and despite assurances from both Umahi and Ibeto that the cement factory would be revived, nothing has happened to change the story.

Indeed, it is being speculated that the company lacked financial ability to revamp the factory. Sources said Umahi knew it would be difficult for Ibeto to improve the factory’s fortunes, as he has to start afresh, but that he decided to allow him in appreciation for the support he got from Ibeto group during his election campaign.

A source said in order to show that the state government was no longer interested in reviving the factory, Umahi’s administration has decided to establish a cement factory in the state and is currently undertaking a feasibility study on a location vast in limestone.

Nigercem factory was established in 1957. And within 30 years, the company witnessed expansion, diversification and eventual decline, following the Nigeria civil war. But after the war, the factory started begging for attention and rehabilitation, and upon series of policy reversals, board and management instability, sustained losses, the firm collapsed.

Speaking at a function last Thursday, in Enugu, a University lecturer, Dr. Philip Obi blamed successive administrations in the region for the sad development, noting that “selfishness of the political class” contributed to the problem.

Citing several institutions in the western region that are still functional and contributing to government revenues in that region, he said: “these patrimonies have been sustained because there is a policy to the effect that, irrespective of party affiliation, there must be no tampering with all that are of economic value to their people.

And that is why they have the Oodua Investment, which every governor in the west supports. They pull resources to revive those things that hold them together in order to create jobs and expand their revenue sources. This is what is lacking here.

“There is this I-don’t-care-attitude among our leaders and each administration is only interested in its own policies. Otherwise, how come Hotel Presidential, Port Harcourt, has continued to survive, while that of Enugu has become history? Southeast cannot make progress, if it continues this way.”

Chief Jasper Oguejiofor, a lawyer, regretted what he described as “abandonment of things that make the southeast tick.”

“Had the concept by Okpara and our forebears been sustained, we will not be going to Abuja cap-in-hand to ask for recognition,” he said.