Erisco Foods threatens to shut down production, quit Nigeria
Erisco Foods has warned that it may be forced to shut down its production in the country due to its inability to access foreign exchange from the Central Bank of Nigeria for the procurement of machinery. The company’s Chief Executive, Mr. Eric Umeofia, said it would lay off 1,500 employees and quit Nigeria for a more favourable business environment if things don’t change.
He said this in Lagos on Wednesday when some of the company’s workers held a protest, lamenting plans by the company to halt operations and lay off workers. Umeofia said, “It is difficult for indigenous manufacturers to access forex despite CBN’s promise to manufacturers that they will allocate 60 per cent of foreign exchange to them.
“It is unbelievable that for over two months, no forex has been allocated to Erisco Foods whereas the same forex is allocated daily for the importation of finished goods.
“Products that can be easily produced locally like fish head, tomato paste, razor blade are on the forex bids of the various banks.”
He said that the high interest rates charged by commercial banks, importation as well as policy constraints were disincentives to manufacturer’s production in the country.
He said, “The prices of our products are high due to high cost of production and this is in addition that we currently generate our own power. We have lost over N3.5bn in our bid to industrialise Nigerian economy and (are) ready to move our production section to another country.”
Umeofia complained that the penchant of Nigerians for imported goods and lack of clear policy against importation of goods that could be manufactured locally were destroying manufacturers.
He said, “We have stock of tomato paste worth over N6bn now and not selling due to dumping and conspiracy against indigenous manufacturers.
“We will lay off 1,500 of our employees in the factory, replicate our $150m investment in another country and from there import tomato paste to Nigeria.”
Erisco Foods has a production capacity of 450,000 metric tons of tomato paste annually for 22 brands with over 2,000 workers.
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