• Sunday, May 19, 2024
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Economic reforms by industrial revolution – a practical approach (2)

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 At this point, we will take a critical look at a local manufacturing firm, Indorama Eleme Petrochemicals Ltd (IEPL). This will help us to further explain Nigeria’s present state of under-industrialisation so as to suggest an actionable measure through industrial revolution as time closes in fast on the Vision 20-2020 project. I believe we shall end up with a conclusive resolution to embark, through our collective efforts, on these all-important economic reform programmes and projects without further rhetoric and delay.

Formerly known as the Eleme Petrochemicals Company Limited (EPCL), a subsidiary fully owned by the Nigerian National Petroleum Corporation (NNPC), IEPL was acquired in August 2006 by Indorama Group as the core investor. It is a state-of-the-art Olefins plant producing a range of poly-ethylene/butene and poly-propylene products. The erstwhile EPCL was poorly managed under NNPC. Before it was privatised in 2006, this complex was completely grounded. The moribund manufacturing plants were not operating due to unavailability of spare parts and equipment breakdown. Indorama took over, rehabilitated the entire complex (through a major turn-around maintenance) and started operations on October 12, 2006. Adequate maintenance is extremely vital to the health of any manufacturing equipment to ensure smooth running of operations. In this direction as well, two more TAMs had already been carried out by the management. This unit has become a successful model of the nation’s privatisation programme and has also recorded numerous achievements – smooth and stable operations, enhanced production capacities, among others. It has indeed proved to be an excellent model of Public Private Partnership (PPP) and has positioned itself as a strategic player in the Nigerian economy, catering to the domestic demands of the growing plastic  

 processing downstream industries. As a perfect reflection of the government’s backward integration policy, the company has also significantly contributed in import substitution by supplying quality polymer products to over 200 plastic processing companies in Nigeria and export to many nations, including USA, Europe and Asia, thereby placing Nigeria on the global polymer map as a leading supplier of poly-olefins. This is just a tip of the iceberg.

Furthermore, IEPL’s insistence on total customer satisfaction through consistent supply of high quality products, competitive pricing and technological capabilities with ever growing readiness for steady provision of high quality grades, and its overwhelming market share of 82 percent being controlled in the domestic market, are a clear evidence of the strong relationships it has succeeded to build with its customers. Besides, it has contributed immensely to employment generation in that region, generated earnings for both the federal and state governments; developed and enriched its host communities as well (inclusive of its corporate social responsibility); and contributed to Nigeria’s GDP and economy by contributing favourably to balance of trade. In addition, a PET plant was commissioned in July 2012 and has since started production. There is also an ongoing project in the complex to set up one of the world’s largest grassroots fertiliser plants, being followed by a methanol plant.

From all of the above recorded performances and exploits so far by IEPL, the much sought-after attractions and attributes of industrial revolution are hereto clearly characterised. These growth aspirations for a healthy industrialised economy – through an aggregate accumulation of the above prototype economic contributions as shall be replicated in the system, cumulatively – are clearly indicated from the above sample study.

One is tempted to comment at this point on existing government-owned business establishments, such as the principal arm of the erstwhile EPCL, the unbundled NNPC. This gigantic legal personality, as an organisation already reorganised and registered with the Corporate Affairs Commission (CAC) to go and run business with the aim of making profit (and never to be run like a “charitable organisation”), its entire operations ought to take a cue from the performances of its former subsidiary IEPL. Even its contemporaries from Russia (Gazprom) and Brazil (Petrobras) are performing excellently well as profit-making ventures.

Opportunities abound for NNPC to make exploits as well, but nothing much seems to be happening with the enormous amount of natural gas resources we hold (at least to the eyes of the masses). Apart from the expected modern Greenfield refineries, one should expect NNPC to equally exploit, optimally, the opportunities available to Nigeria considering our proven natural gas reserves of 180 trillion cubic feet, the 7th largest in the world, and like its counterparts in the South Pars field along the Persian Gulf (the Iranians in the Middle East), make investment in ethylene and derivatives. Be that as it may, we still hope that one day our country will be totally “petrochemicalised” with both heavy, medium and small scale cottage industries coming as clusters. 

 

SUNNY NWACHUKWU

Nwachukwu writes from Onitsha,

Anambra State.

[email protected]

 

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