The economic crisis in Nigeria is taking further toll on multinational companies.
This is just as major tomato manufacturing company in Nigeria, Erisco Foods Limited has announced its plan to move out of the country.
The company anchored its reason to close the company on harsh operating climate, which has hiked operational costs in recent months.
Speaking at a press conference in Lagos, President/CEO of Erisco Foods Limited, Chief Eric Umeofia said the company had concluded plans to move to Asian continent, precisely China.
He said from China, finished products would be imported and sold to consumers in Nigeria and other parts of the world.
According to him, 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.
His words, “As from today, November 1, 2016 we have commenced the winding down of our tomato manufacturing business in Nigeria and it’s a decision that we have taken as the 30 days ultimatum has expired without our terms being met,” Umeofia said.
“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 N3.6billion 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.
“They won’t give us forex to import machinery, machine spare parts and raw materials for processing Nigerian fresh tomatoes into paste in our Lagos factory and they won’t give us approval to use our own money (about $460,000) generated from our foreign operations to import our raw materials.
“They won’t also check dumping because of the powerful nature of the import cabals. This decision is therefore final and there is no going back on it; nothing will make us to come back even in the future because we have found out that we can import tomato paste into Nigeria and still make huge profits,” he added. Umeofia said.
The Minister of Finance, Mrs. Kemi Adeosun, has said that she does not know when the ongoing economic recession in Nigeria will end.
Just recently, Emirates, one of the biggest foreign airlines operating in Nigeria, stopped flight operations to the Nnamdi Azikiwe International Airport, Abuja.
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