How Erisco Foods Received Huge Commercial Agric Credit Intervention 


By Chika Amanze-Nwachuku and Obinna Chima

Findings have showed that contrary to the recent claim by the Chairman of Erisco Foods Limited, Chief Eric Umeofia,  that his firm has not been receiving support from the federal government, the company has got support of about N3 billion from the Commercial Agriculture Credit Scheme (CACS) between 2014 and 2016.
Umeofia recently alleged that his company had been frustrated by the National Agency for Food and Drug Administration and Control (NAFDAC), Ministry of Trade and Investment and the Central Bank of Nigeria (CBN).

But documents seen by THISDAY at the weekend showed that in January 2014, Erisco Foods was given a total of N500 million for the importation and installation of four addition tomato processing lines to the existing three lines it had, as well as for stockpiling of raw materials needs for the operational efficiency of the company. The company received the intervention fund which had a tenor of 32 months through Stanbic IBTC Bank.  Also, in May 2014, it received another N400 million which was for working capital, for the purchase of diesel, gas, salaries and local raw material such as sugar, salt, potassium, solvent, cartons and other packaging materials. The fund which the document showed was also disbursed through Stanbic IBTC had a tenor of 30 months. The document also showed thereafter the firm got N300 million.

In the same vein, in December 2014, same Erisco Foods got a total of N800 million which was for the procurement of raw materials- 240,000 metric tonnes/year tomato paste into sachet and cans. The fund given to the firm also had a separate tenor of 36 months. Similarly, in April this year, Erisco Food got another N1 billion to finance the procurement of processing machinery for fresh tomatoes into concentrate. The fund which had 84 months tenor was received by the bank through Keystone Bank Limited.
“The N2 billion facilities given to the company were intended for capital importation, while the extra N1 billion was advanced to the company on the company on the premise that it was going to be used for the purposes of starting primary production through backward integration, using locally produced tomatoes from indigenous farmers.
“As at today, this has not been achieved. Erisco is only importing and packaging tomato paste concentrates into fina, products,” the document also indicated.
Furthermore, the source at one of the Participating Financial Institutions (PFIs), through which the CBN disbursed the funds to Erisco and other beneficiaries, disclosed that the company, between June 2014 and April 2016, received various sums for the importation and installation of tomato processing lines and the stockpiling of raw materials for operational efficiency. The source, who alleged that the loans received by Erisco were expected to be repaid within a period ranging from two and a half years to seven years, wondered why the industrialist opted to accuse various government agencies when indeed his company had benefitted immensely from interventions of government and funding from the banks.
Furthermore, the source alleged that the company might not have kept to existing rules of engagement by importing tomato paste and repacking the item instead of boosting local tomato paste production in line with the aspirations of government.
“When contacted, the Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, said the central bank does not allocate forex anymore.
“By practice, we do not join issues with individuals on matters of this nature. All I can tell you is that the CBN does not allocate foreign exchange. All business persons, manufacturers, traders, among others  are expected to approach their respective banks to bid for and obtain foreign exchange. Whether they succeed or not is their business. No amount of blackmail through paid advertorial or sponsored reports could make the CBN change its policy.”
Okorafor therefore urged those seeking to purchase foreign exchange to follow the due process instead of deploying blackmail and other unethical schemes in their ploy to win public empathy.
Umeofia who had criticised the central bank and other government agencies for not supporting his business, had blamed government for lack of clear policies towards manufacturing, high interest rates and mass importation of products such as tomato paste which his company produces in Nigeria.