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Erisco Foods Limited yesterday announced the closure
of its tomato manufacturing plants in Nigeria, citing an unfavorable 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 Tuesday, 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 and other parts of the world.

According to him, the decision to shut down the
Nigerian manufacturing plant was taken after the expiration of a 30-day
ultimatum given by the management of the company to the Federal Government to
compel the Central Bank of Nigeria (CBN) to make available adequate foreign
exchange 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 urged the Federal Government to compel regulatory agencies
like NAFDAC, SON and the Federal Ministries of Agriculture, Industry, Trade and
Investment to end the importation and dumping of substandard tomato pastes in
the country.

“As from today, November 1, 2016, we have commenced
the winding down of our tomato manufacturing business in Nigeria and it’s a
decision we have taken after the 30-day ultimatum to government expired without
our terms being met,” Umeofia said.

“We are moving the factory to China from where we
will manufacture and bring back to Nigeria while also selling to other overseas
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 N3.6 billion.

“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 disengaging 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.

‎He said the company had similarly abandoned the
Katsina State backward integration programme with the Certificate of Occupancy
on the 2,400 hectares of land issued to the company returned to the state
government.

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