Indorama Boosts Solvency Rating With N275bn

Barely five years after the former subsidiary of the Nigerian National Petroleum Corporation (NNPC), Eleme Petrochemicals Company Limited (EPCL) was privatised by the Federal Government, the now privately managed Indorama/EPCL has overcome the mountain of debt overhang, management and technical challenges, and shot itself up as a sound and solvent company.
This outstanding performance and improved corporate governance profile, The Tide, gathered, has necessitated the investment of $1.8billion (about N275billion) foreign direct credit for the expansion of the company’s facilities with new methanol, fertilizer and LDPE plants.
The Tide can authoritatively reveal that this monumental feat is coming on the heels of increasing global investors’ cut back on existing and future investment portfolios following hurting borderless recession, hard-to-bear insecurity concerns arising from almost seven years of militancy and kidnapping in the Niger Delta, and general investor apathy in the Nigerian economy due mainly to crippling corruption, policy inconsistencies and endemic power supply challenges.
Speaking during the first-ever national media tour of the Indorama/EPCL plants in Eleme, Rivers State, last Friday, the company’s Managing Director, Mr Manish Mundra, said, with a credible and transparent management, sound technical status of the plants, increased global and domestic markets’ share, and buoyant financial base, both shareholders and domestic and international  lending sources have established confidence in the ability of the company to achieve long-term business goals set out in its acquisition programme.
Mundra noted that it was for this reason that the company’s current shareholders have agreed to pump in additional $600million while a consortium of foreign and domestic lenders have collectively committed to a staggering $1.2billion facility expansion funding programme, aimed to consolidate the leadership of the Rivers-based petrochemicals plant in Africa.
The managing director indicated that in the last five years, “Indorama/EPCL has helped Nigeria to save approximately $1.3billion in foreign exchange through import substitution”, adding that the company has turned Nigeria into a net exporter of petrochemical products, and single­handedly hitting 10 per cent of the nation’s total non-oil exports.
According to Mundra, following the increasing revenue inflows from products’ sales to both domestic and foreign markets, Indorama/EPCL has shored off initial financial and technical challenges, and paid shareholders more than N23billion dividends while also paying total tax call obligations of N11 billion.
The Tide learnt that Indorama/EPCL shareholders include the Nigerian National Petroleum Corporation (NNPC), the Rivers State Government and Bureau of Public Enterprises, which holds shares on behalf of the Federal Government, while the taxes paid so far include Value Added Tax (VAT), customs duty, withholding taxes, and pay-as-you-earn (PAYE).
The Tide recalls that the Indorama holds 65 per cent shares of the company while the Federal Government, Rivers State Government, the Nigerian National Petroleum Corporation (NNPC), host communities, and employees hold 5, 10, 10, 7.5 and 2.5 per cent of the stakes, respectively.
In an almost moribund petrochemicals facility that was eventually privatised in 2006 after a protracted official industry and labour resistance aimed at keeping the essential national economic asset in government control.
The core investor had expended more than $400 million to acquire the ailing EPCL, and resuscitated the plants after about three months of extensive turn around maintenance (TAM) before commencing production.
Indorama/EPCL gets its critical natural gas feedstock from the Nigerian Agip Oil Company (NAOC) cluster facilities in Ebocha, Ogba/Egbema/Ndoni Local Government Area of Rivers State, pumped through an underground pipeline to the site of the plant in Eleme, some more than 300 kilometres away.
The new company, a tacit example of workable public private partnership (PPP), produces high quality polymer resins, comprising a range of polypropylene and polyethylene grades for both domestic and foreign markets, with footprint and market share in 20 countries.
Highlights of the event were a guarded tour of the Indorama/EPCL plants, including olefins, polyethylene and polypropylene plants, plants’ cooling facility, water treatment tanks, raw materials storage units and products warehouse and loading sections, as well as press briefing to unveil the company’s new expansion strategy.

Nelson Chukwudi