Erisco Foods Limited, a major tomato manufacturing company in Nigeria, has announced plans to move out of the country, further deepening the current economic crisis plaguing the nation.
Explaining reasons for its closure, the company’s management pegs it on the harsh operating climate, which has hiked operational costs in recent months.
The decision to shut down the Nigerian manufacturing plant was taken after the expiration of a 30-day ultimatum given by the management of the company to the Federal Government to prevail on the CBN to make available enough foreign exchange (forex) to assist in the imports of raw materials as well as the requisite equipment needed to keep the manufacturing plants running and also profitable.
The company had also demanded that the Federal Government compel regulatory agencies like NAFDAC, SON, and the Federal Ministries of Agriculture, Industry, Trade and Investment to end the imports and dumping of sub-standard tomato paste in the country.
President/CEO of Erisco Foods Limited, Chief Eric Umeofia while speaking at a press conference in Lagos, said the company had concluded plans to move to Asia, precisely China, and finished products would then be imported and sold to consumers in Nigeria and other parts of the world.
“We are moving the factory to China from where we will manufacture and bring back to Nigeria while also selling to other over seas clients. It pays us that way as a business because in recent months, our continuous operation in Nigeria has resulted in a loss of over N3.6 billion investments.
Because of the huge machines we have to move out, winding down will last us about nine months as we plan to first exhaust the existing raw materials we have before moving our equipment out to China.
It’s unfortunate that out of a workforce of about 2,000 Nigerians that we have, we will be dis-engaging about 1,500 of these workers as we need just about 40 staff to keep the Nigerian company running since what we will now be doing is just restricted to marketing and sales of imported products from our China plant. My business has been deliberately frustrated by the way the CBN has managed forex bidding and allocation…”
He further laments that the CBN refused to give them forex to import machinery, machine spare parts and raw materials for processing Nigerian fresh tomatoes into paste in their Lagos factory and also denied them the approval to use their own money (about $460,000) generated from the company’s foreign operations to import raw materials.
Umeofia stressed that their decision is final and there is no going back on it since discovering that tomato paste imports to Nigeria can still fetch them huge profits.