Erisco Foods Limited, an indigenous tomato manufacturer, has announced the plan to shut down its manufacturing businesses in Nigeria owing to unfavourable operating climate.
President/CEO of the company, Chief Eric Umeofia who addressed the media in Lagos on Wednesday said the cost of running both the Nigerian farms in Katsina and fresh tomato paste processing plant business in Lagos had become so exorbitant given the high cost of sourcing for foreign exchange (forex) as well as the inability of regulatory agencies to halt the high rate of importation and dumping of imported tomato paste in the country.
According to him, the management of the company had concluded the plan to shut the Nigerian operations in the next 30 days and lay off about 1,500 workers, except the investment climate improves. Umeofia listed such immediate improvements to include access to cash guaranteed by the Central Bank of Nigeria (CBN) while the Standard Organisation of Nigeria (SON) and NAFDAC will move to end the import and dumping of substandard tomato paste in Nigeria which he said disrupted efforts to sell locally processed tomato paste.
“The CBN has refused to give us forex to import machinery, machine spare parts and our raw materials to be used for production of Nigerian fresh tomatoes to be used to produce tomato paste,” said Umeofia.
“The CBN, like NAFDAC is against my business because while they refuse me forex, they are approving intervention loan and forex to companies mostly owned by foreigners to import the same finished tomato paste and other items like frozen fish, fish heads and supermarket items that we don’t need at all or we can produce better in Nigeria.
“We are running our business relying on the dollars that we source from the parallel market at the exchange rate of over, 450 to $1.
“In view of the above, Erisco Foods will be forced to relocate our operations to a country where there is a conducive and favourable environment for tomato paste manufacturing if within 30 days from now nothing significant is done by the government to address these issues raised by us. “We intend to manufacture from outside, export and sell in Nigeria.
It will pay us that way financially. And we have also concluded plans to lay off 1,500 of our 2, 520 staff because we can’t sustain the huge staff strength given the shift in our new production policy. We however assure our consumers that the same products will be made available to them though manufactured by us in other countries as done by all other brands of tomato paste in the Nigerian market today since that is what Nigeria wants,” he added. As the press conference was going on, some staff who got wind of the planned sack staged a peaceful protest outside urging the management not to shut down and imploring the Federal Government to assist the company stay afloat. Mr. Ezeugwa Obinna, a Maintenance Manager with the company who addressed the media on behalf of the workers said sending about 1,500 workers into the labour market would compound the unemployment woes in the country. “We are begging President Buhari, Governor Ambode, the CBN, NAFDAC, the Ministers of Employment, Industry Trade and Investment to step in and assist protect our jobs,” Obinna added.
