Wednesday, 2 November 2016

Rich Businessman Erisco Shuts Down His Factory In Nigeria, Relocates To China

He said it weeks back that if things continue the way they were going, he would be forced to leave his country, Nigeria, and relocate his Multi-Millions Dollars business to China. Sadly, he has done it.

Erisco Foods Limited has announced the shutdown of its tomato manufacturing business in Nigeria, citing unfavourable operating climate which has escalated operational costs in recent months.
President/CEO of Erisco Foods Limited, Chief Eric Umeofia, who addressed a press conference in Lagos said the company had concluded plans to relocate the manufacturing aspect of the business to China from where finished products would be imported and sold to consumers in Nigeria.

He said the decision to shut down the Nigerian manufacturing plant was taken after the expiration of a 30-day ultimatum given by the management to Government to compel 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 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. 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.

Most of those to be employed in the now factory would be from China. More job loss for Nigerians.
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