INDORAMA Group, the core investor in Eleme Petrochemicals Limited, River State, has concluded plans to invest additional N326 billion ($2.1billion) in three new plants at Eleme Petrochemicals for PET, fertiliser and methanol projects within the next three years.
These would complement the existing investment of about $575million, which the Group has injected to revive the moribund plants that currently produce various petrochemical products such as polyethylene and polypropylene for exports.
The Minister of Trade and Investment, Mr. Olusegun Aganga, confirmed the Group’s new investment plan during his inspection of the facilities and operations of the company.
Indorama Corporation, with headquarters in Indonesia, was founded in 1976 and operates in Singapore, India, Thailand, Egypt, Sri-Lanka and Turkey, among other countries. The company is a global manufacturer of diversified industrial products including polyester and intermediates (fibre, PET, Resin, PTA), spun yarns, polyolefin, cement, textiles and industrial gloves. It emerged core investor in the privatisation of Eleme Petrochemicals in 2006.
Currently, the Eleme Petrochemicals Company Limited has the following ownership structure: Federal Governmenty (15 per cent); Rivers State Government(10 per cent); host communities( 7.5 per cent); employees of EPCL(2.5 per cent); and Indorama(65 per cent).
However, Aganga said that the federal government would initiate policies and a regime of incentives which would drive the petrochemicals sector to ensure that Nigeria became the hub of the petrochemicals industry in Africa and globally.
According to him: “The Indorama Group said they had concluded plans to invest additional $2.1billion in three new plants at Eleme Petrochemicals for PET, fertiliser and methanol projects. This is a clear indication that we have the potentials to make Nigeria the hub of petrochemical industry in Africa and then compete with other major global players. "
“This is because we have the raw materials and the people. The model today is that most of the raw materials used in the petrochemical industry are produced in the Middle East. The latest Forbes ranking of the wealthiest nations, which was released a few days ago, showed that Qatar has become the richest country in the world, with per capita income of more than $88,000. This is based on the growth of their petrochemical industry.”
He added, “The reason I am focusing on the development of the petrochemical industry is that my vision, and that of this administration, is that in this industry, we can easily become the leaders in the world. Specifically, I am focusing on areas where we can become top three in Africa and at least top 10 globally.
“Already, with the plans the Indorama Group has on ground, we will have the second largest petrochemicals facility in Africa, second to South Africa. However, it won’t take long, within the next two to three years, we should have the largest petrochemicals industry in Africa.”
Aganga said that his ministry would base its industrial revolution strategy on areas where the country had comparative and competitive advantage, adding that the petrochemicals industry was one of the key areas to be given priority attention.
He said that EPCL was a good example of the success story of the privatisation programme of the Federal Government, adding that available records from the company showed that it had paid dividends of over N40bn to the Federal Government, Rivers State Government and employees in the last five years.
He hinged the success of Eleme Petrochemicals on its market leadership, strong corporate value and ethics and excellent public-private partnership (PPP) model, which gave the community, employees, state and the Federal Government equity stakes in the company.
He said, “The parent company of EPCL, the Indorama Group, are world leaders in the petrochemical industry. They are the biggest producers of polyester globally and have presence in at least 16 countries, with manufacturing sites in about 30 locations. They took over the EPCL, which was a subsidiary of NNPC in 2006. From the records made available to me, over a five-year period, they have grown their revenue and production at least 32 times.
“Also, revenue has grown significantly, even as they have paid taxes and dividends to the Federal and state governments to the tune of about N45bn. So, that is the success story of the privatisation programme of the government. Too many times, we have heard that the privatization policy of the government has not gone down well. But this is an example of a success story of the privatisation of a company that was not doing well under government but is now doing extremely well and has now become the leading light in petrochemical industry in Nigeria.”
Speaking during the inspection visit, the Managing Director of Eleme petrochemicals, Mr. Manish Mundra, said the INDORAMA Group was ready to partner the Federal Government on making the country the global hub of the petrochemical industry.
He said, “There are more than 20 compounds and sub-compounds that can be derived from the petrochemicals sector for various areas of the social and economic development of any country. Nigeria has the potential in terms of natural and human resources to become the hub of the petrochemical industry in the world. We are ready to work with the Federal Government to make this happen.”