James Emejo in Abuja
Indorama Group, the consortium which took over ownership of the Eleme Petrochemicals Industry through a privatisation exercise in 2006, plans to bring total investment in the company to $4.2 billion by 2020.
Already, the company has implemented the world’s largest single train Urea plant of 1.5 million tonnes capacity along with associated infrastructure with total investment of $1.4 billion, making its current total investment of $2 billon.
The acting Director General, Bureau of Public Enterprises (BPE), Dr. Vincent Onome Akpotaire said the sale of the almost moribund petrochemical company represented one of the success stories of the Federal Government’s privatisation programme in terms of compliance to the executed Share Purchase Agreement (SPA)/Post Acquisition Plan (PAP); contribution to the Gross Domestic Product (GDP) and the creation of employment in the country.
He further maintained that the sale of Eleme Petrochemicals to Indorama was transparent and followed due process with all the necessary approvals given by the National Council on Privatisation (NCP).
According to him, four companies were pre-qualified for the bidding process at the close of the deadline on May 2005 for the submission of Expression of Interests (EOIs) which after evaluation, only Dangote Chemicals Co. Consortium, Indorama Group and LG Chem were shortlisted.
He recalled that LG Chem subsequently pulled out on the grounds that it intended to participate as an Operations and Management (O & M) contractor and not to acquire controlling interest in EPCL, leaving the contest between Dangote Company Consortium and Indorama Group.
Eventually, the latter won the bid to take over the company at the cost of $225 million from the earlier $215,088,888 it had bidded with a commitment to invest $150 million to be sourced from the International Finance Corporation (IFC) to revamp the company’s plants and facilities.
He said the federal government had so far been impressed by the performance of the new management, adding that because of the impressive performance and compliance of the Core Investor to all the obligations it covenanted in the Post Acquisition Plan (PAP)/Shares Sale Purchase Agreement (SSPA) signed with the federal government, the NCP had at its meeting held on December 18, 2014, approved the ‘discharge’ of the company from the 5-year monitoring programme of BPE.
As a result, he said the company would no longer be monitored routinely as provided for in part b of section 8.4 of the SSPA except for occasional performance assessment purpose.
Akpotaire, represented by the Director, Mines & Steel Development Department, Mallam Abdullahi Muhammad Dikko stated these during the Investigative Hearing on the Privatisation Process and performance of Eleme Petrochemicals by the House of Representatives Committee on Privatisation.
Akpotaire added that within 11 years after take-over, the company, which was almost moribund before privatisation, had recorded many milestones in its vision of building Africa’s largest petrochemicals hub in Nigeria as it now operates at over 100 per cent capacity, meeting the need of the Nigerian plastics industry, which utilises petrochemical products (polymer resins) as its raw materials.
In a statement by BPE spokesman, Mr. Alex Okoh, he disclosed that the company’s surplus supplies were being exported to about 20 countries in Europe, Asia, US and parts of Africa, stressing that since take over in 2006, the company had done two major turnaround maintenance (TAM) and carried out extensive innovations and modifications of existing facilities thus creating 13 new ranges of polymer resins to suit the needs of various customers.
Nevertheless, Director, Post Privatisation Monitoring (PPM), BPE, Mr. Chigbo Anichebe listed the milestones achieved by the new investor to include investment of $470 million by the investor for 75 per cent EPCL equity; conversion of dead assets through world class technical support and now committed to expansion; and further commitment to build the largest petrochemicals in the country.