The Bureau of Public Enterprises (BPE) has said that 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).
It also 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.
Acting Director General of the Bureau, Dr. Vincent Onome Akpotaire, represented by the Director, Mines & Steel Development Department, Mallam Abdullahi Muhammad Dikko stated these at the Investigative Hearing on the Privatisation Process and performance of Eleme Petrochemicals which held on Tuesday, July 27, 2016 by the House of Representatives Committee on Privatisation.
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.
The Acting DG 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).
The Acting DG listed the success story of Eleme Petrochemicals as:
- Implementing 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 $2.0billion estimated to touch $4.2billion by 2020
- High quality products
- Excellent public-private partnership
- High corporate social responsibility and community development; and
- Staff strength as at February 29, 2016 at 5300
According to him, 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, 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; and
- Commitment 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.
