Erisco Foods shames FG, relocates to China for ease of doing business
Barley six months after the wife of the President, Mrs. Aisha Buhari came down to Lagos to represent, husband President Muhammadu Buhari in the commissioning of the multi billion dollar indigenous tomato paste plant by Erisco Foods Limited, the group has relocated to China for want of ease of doing business.
The Chief Executive Officer, Erisco Foods Limited, Chief Eric Umeofia, announced Tuesday that the company was winding down operations preparatory for its final exit from the country, saying he is moving the factory to China where he already had a thriving business, adding that from there, he would be manufacturing and exporting tomato paste back to Nigeria, as it was far cheaper doing so than producing locally.
Another angle of shame and controversy around the firm which experts say may culminate to his possible arrest by security agencies is the fact that part of the fund for the development of the Lagos factory valued at $2bn was granted to him by the Central Bank of Nigeria (CBN) as an intervention fund because of the company’s status as an indigenous investor in creating jobs.
It would be recalled that according to the CBN Industrial Intervention window provisions, the investor who had accessed such fund shall not exit the country for whatever reason.
However, the company had complained of the influx of imported tomato paste, Umeofia had issued a 30-day ultimatum that if the issues were not resolved, he would move his factory outside Nigeria.
Umeofia stated that he had already incurred a loss of over N3bn in the past one year and blamed the Central Bank of Nigeria for withholding foreign exchange from local manufacturers, while approving same for importers of tomato paste.
The group further aulted CBN’s declaration that it had ceased to allocate forex to manufacturers after it floated the naira, adding, “No bank can pay you forex unless the CBN has approved the Form ‘M’, which is a form permitting you to import.”
Besides, Erisco is not the only tomato paste manufacturer shutting down in Nigeria. The Group Vice President, Dangote Industries Limited, Alhaji Sani Dangote, said in October that the group had stopped tomato paste production at its $20m factory, which was established in March.