The Acting Director General of the Bureau of Public Enterprises (BPE), Dr. Vincent Akpotaire has said that investment of Indorama in Eleme Petrochemicals Limited may hit $4.2 billion by 2020.
He also said that the company is currently implementing the world largest single train Urea plant of 1.5 million tons capacity along with associated infrastructure with total investment of $1.4bn, making total investment of $2bn.
Dr. Akpotaire, represented by the Director, Mines & Steel Development Department, Mallam Abdullahi Muhammad Dikko stated this at the investigative hearing on the privatization process and performance of Eleme Petrochemicals at the House of Representatives in Abuja.
He said that since the takeover of the plant after privatization, the company has produced high quality products, excellent public-private partnership, high corporate social responsibility and community development; and a staff strength of 5300 as at February 29, 2016.
According to him, 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).
He described the transaction as 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.
Akpotaire said that 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.
However he stated 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 which left the contest between Dangote Company Consortium and Indorama Group and in the end; the latter won to take over the company at the cost of $225 Million from the earlier $215,088, 888 it had bid 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 also said 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 National Council on Privatisation (NCP), at its meeting held on December 18, 2014, approved the‘discharge’ of the company from the 5-year monitoring programme of BPE.
Consequently, 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 (s).
He noted that in eleven years after take over, the company, which was almost moribund before privatization, has recorded many milestones in its vision of building Africa’s largest petrochemicals hub in Nigeria as it
now operates at over 100% capacity, meeting the need of the Nigerian plastics industry, which uses petrochemical products (polymer resins) as its raw materials.
He added that the company’s surplus supplies are exported to about 20 countries in Europe, Asia, US and parts of Africa and that since take over in 2006, the company has 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.
Also speaking at the occasion, the Director of Post Privatisation Monitoring (PPM) in the Bureau, Mr. Chigbo Anichebe listed the milestones achieved by the new investor as:Investment of $470 million by the investor for 75% EPCL equity, having one of the highest Foreign Direct Investment (FDI) in the downstream non oil & gas sector till date, conversion of dead assets through world class technical support and now committed to expansion andcommitment to build the largest Petrochemicals in Nigeria among others.
In his presentation, the Acting Director, Oil & Gas in the Bureau, Mr. Sunday Olatunde Ikhuerowo also gave kudos to Indorama for turning around the company since take over, saying it is a success story for the Reform and Privatisation programme of the Federal Government