Jossy Nkwocha
11 November 2008
opinion
Eleme Petrochemicals Company Limited (EPCL), privatised in 2006 by the Federal Government has turned out to be the most handy success story of the privatisation programme in Nigeria.
Various stakeholders including the Bureau of Public Enterprises (BPE), the National Assembly Committees on Privatisation, the host Communities, among others have at various times commended Indorama, the core investors for reviving the company.
Today, the company which couldn't work under government ownership is doing very well: continuously supplying petrochemical products to domestic plastics manufactures, exporting same to the international market, paying dividend to government, generating billions of naira for government in taxes and VAT revenue, and creating job opportunities for Nigerians. This essentially was the reason for the privatisation programme in the first place. And Eleme has turned out to be the government's most visible dividend of privatisation!
Based on the facts above, it is incumbent on all patriotic Nigerians to help the company to consolidate on its achievements for the benefit of all, including the foreign investors. The current Management of EPCL under Indorama believes in providing the critical stakeholders and the general public with the relevant facts and figures on the privatisation and current operations of Eleme Petrochemicals. According to the well-known journalism dictum, "facts are sacred, comments are free!"
Point number one is that EPCL under the management of government could not do well. For 10 years, they could not carry out turnaround maintenance (TAM) which was supposed to be done every two years. The plant was run at below 20% capacity and had an indebtedness of N1.8 billion. It could not pay for its feedstock supply from NNPC, Agip Oil and Conco-Phillips. One of its former managers acknowledged these facts recently but blamed the situation on various factors.
Point number two is that the Federal Government followed the due process in privatising the company. The Bureau of Public Enterprises (BPE) formally advertised plan to privatise EPCL and asked for expressions of interest (EOI) from competent organisations. At the end of the exercise, two companies namely Dangote from Nigeria and Indorama from Indonesia emerged as final bidders after normal due diligence of the company. Indorama bided higher and was so chosen as the core investor by the National Council on Privatisation (NCP).
Point number three is that Indorama paid the bid price as at when due. This fact can be confirmed by the Bureau of Public Enterprises (BPE) and other relevant agencies of the Federal Government.
Point number four is that Indorama took over the management of EPCL in August 2007, moved in its engineers and equipments and for the first time in 10 odd years carried out comprehensive turnaround maintenance of the plants and they roared back to life! Since then, and despite the security challenges in the Niger Delta region, the plants have been running well and producing various grades of petrochemical products (polypropylene and polyethylene) which were hitherto imported into the country. Today, EPCL under Indorama services about 84% of the domestic market and exports the excess products to various countries in Europe, Asia and other parts of Africa. Nigeria is now a net exporter of petrochemical products!
Point number five is that the new EPCL has added great value to the Nigerian economy. Its export represents about 10% of all Nigeria's non-oil exports. The company has till date paid more than N2.86 billion to the government as VAT, Customs duty, withholding tax and PAYEE.
The company has so far paid N7.85 billion to NNPC and its affiliates towards supply of Natural Gas Liquid (NGL), the feedstock for its production. Besides, the company has generated more than 1,000 direct and indirect employments for Nigerians, especially Niger Deltans. The multiplier effect is enormous. This means that more than 6,000 Nigerians now depend on EPCL for their livelihood.
Point number six: the company has impacted very positively on the lives of its six host communities in Eleme, Rivers State. In April last year, it signed a Memorandum of Understanding (MoU) with the host communities on various development initiatives including employment, youth empowerment, award of contracts, sustainable development initiatives and corporate social responsibility (CSR). About 40 indigenous contractors from the communities are handling various contracts in Eleme Petrochemicals.
It is important to note that two committees of the National Assembly have visited EPCL on their oversight functions and have seen for themselves the monumental transformation of the company as privatisation's success story. Other agencies of the government including the Federal Ministry of Finance and the Raw Materials Research and Development Council (RMRDC) have also visited the company and have all the facts and figures.
The sustained propaganda against Eleme Petrochemicals and Indorama in recent times is neither in the general interest of Nigerians nor the foreign investors who answered a call to invest in our country. The Federal Government and indeed all Nigerians need to provide the company the enabling environment to consolidate on its achievements for the benefits of all.
Nkwocha is the Head of Corporate Communications of Eleme Petrochemicals, Port Harcourt.
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