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Almost nine months after commissioning its tomato paste manufacturing plant in Lagos, Erisco Foods Limited, an indigenous manufacturer of food products, has announced it will close its factory due to the refusal of the Central Bank of Nigeria to grant it access to foreign exchange to procure machineries, spare parts, chemicals and improved seedlings.   

In an open letter published on Wednesday, Chief Eric Umeofia, President/CEO of Erisco Foods, openly criticised President Muhammadu Buhari and the CBN for failing to support the company. Erisco Foods has said it will shut down its operations, sack its 1,500 employees and relocate its factory to China.

“CBN refused to give us FOREX to import machineries, machine spare parts and raw materials to be used for processing of Nigeria fresh tomatoes into tomato paste in our Lagos factory," Chief Umeofia said. "In addition, CBN refused to give us enough intervention funds after several promises to import agricultural tractors, improved tomato seedlings, fertilizer, and chemicals for our Katsina Project."
 
The company’s N4 billion tomato paste processing plant was commissioned on February 18 by the First Lady, Aisha Buhari, at a ceremony that was attended by several dignitaries, including the wife of the Senate President, Bukola Saraki. The plant reportedly has a processing capacity of 450,000 tonnes of tomatoes.

Erisco said with the launch of its mega factory, it aimed to support the government’s import substitution agenda. Therefore, it had hoped the government would support the company by banning importation of tomato paste, as it did in the past with cement and other items. The company said at full capacity, it can meet all the tomato needs of Nigeria and also export. However, Chief Umeofia said his company regrets the government’s lack of support.

"Your Excellency Sir, you may wish to know that Erisco Foods Limited is the only tomato processing company that is using Nigeria's fresh and dry tomatoes as the major raw material to produce tomato paste till date," Umeofia sai in the letter.

With the pressure on Nigeria’s foreign exchange reserves, owing to the decline in oil prices, the CBN has retained the ban on access to forex to 41 imported items. This has forced several manufacturing companies, including Erisco Foods to source forex from the parallel market, where rates are in excess of 40 per cent above the interbank market rate.  

In the strongly-worded letter, Erisco Foods accused the government of sabotage and double-standard, stating that some government agencies allow importation of sub-standard tomatoes paste into the country. As a result, Erisco Foods has over N6 billion of finished products that are currently unsold and over N13 billion worth of raw materials in its warehouses. Chief Umeofia also accused government of giving preferential treatment to foreign companies by approving those company's request to buy forex for their operations. He said the company has accumulates loses of N3.6 billion.

The company said the CBN also denied to issue approval for Erisco Foods to use its own deposit of $460,000 to purchase the machineries and equipment it needs.