Of the three paper mills-the Nigeria Paper Mill (NPM) Limited located in Jebba, Kwara State; Nigerian Newsprint Manufacturing Co. (NNMC) Ltd. Oku-Iboku, Akwa Ibom State; and Nigerian National Paper Manufacturing Company (NNPMC) Ltd. Iwopin (formerly Iwopin Pulp and Paper Company), in Ogun Waterside Local Government Area of the state, only the NPM and NNMC were producing, though at a low capacity, the NNPMC did not work.
As at 1990, the Oku-Iboku plant had produced 37,581 metric tons of newsprint, which reduced the country’s importation by 12.7 per cent, but was shutdown in 1993 before its completion, and was consequently sold. The NPM, which had produced 42,960 tons of kraft paper as of 1986, is the biggest of them all.
NNPMC is the worst of them. It was planned to produce fully bleached
pulp for production of 68,000 tons of various grades of fine writing,
printing and cultural papers on annual basis, but the plant from its
pre-privatisation to post-privatisation era has so far produced for only
six months.
It was learnt that with initial dependence on imported long fibre
pulp, the mill was planned to produce long fibre pulp from Pinus species
established in plantations in different locations in the country, but
from inception, it has tottered ceaselessly, occasioned first by
equipment installation delays.
Despite the commissioning of the first phase of the mill in 1994, as a result of the joint venture collaboration with Wittermore Paterson Investment BV of Germany, no production took place. There were efforts to run the mill on imported raw materials on one of the paper machines, but the effort stopped in 1998 because of problem of electricity supply.
The plant, till now is not connected to the national grid. High cost of diesel was one of the factors responsible for its initial failure, as it takes the company approximately 52,000 liters of diesel per day to function.
In 2006, when government took steps to sell the company, two indigenous firms-Noxieme Technologies Limited and Beulah Technical Services Company Limited (BETCO), showed keen interest. But their desperation to outsmart each other caused a serious setback, as they ended in court. The intervention of the host community-Iwopin, which intervened, based on the negative effect of the litigation on the community, led to the out of court settlement that saw BETCO as the new owner in 2014. But since it took over, no tangible activity had being carried out at the mill.
The privatisation process started in 2001 with the advertisement for expression of interest published in 2002. BETCO won the bid with an offer price of N3.1 billion.
However, due to several unresolved issues, especially the forestry plantations concession license, BETCO, it was learnt refrained from paying the bid price and in the process, BETCO took the Federal Government to court to restrain the Bureau of Public Enterprise (BPE) from annulling the sale and realising the bid bond of $750,000 without resolving the outstanding issues.
Despite the commissioning of the first phase of the mill in 1994, as a result of the joint venture collaboration with Wittermore Paterson Investment BV of Germany, no production took place. There were efforts to run the mill on imported raw materials on one of the paper machines, but the effort stopped in 1998 because of problem of electricity supply.
The plant, till now is not connected to the national grid. High cost of diesel was one of the factors responsible for its initial failure, as it takes the company approximately 52,000 liters of diesel per day to function.
In 2006, when government took steps to sell the company, two indigenous firms-Noxieme Technologies Limited and Beulah Technical Services Company Limited (BETCO), showed keen interest. But their desperation to outsmart each other caused a serious setback, as they ended in court. The intervention of the host community-Iwopin, which intervened, based on the negative effect of the litigation on the community, led to the out of court settlement that saw BETCO as the new owner in 2014. But since it took over, no tangible activity had being carried out at the mill.
The privatisation process started in 2001 with the advertisement for expression of interest published in 2002. BETCO won the bid with an offer price of N3.1 billion.
However, due to several unresolved issues, especially the forestry plantations concession license, BETCO, it was learnt refrained from paying the bid price and in the process, BETCO took the Federal Government to court to restrain the Bureau of Public Enterprise (BPE) from annulling the sale and realising the bid bond of $750,000 without resolving the outstanding issues.
The core investor and BPE eventually negotiated an out of court
settlement with the consent judgment obtained at the Federal High Court,
Lagos on December 6, 2013. To conclude the transaction, BETCO was
asked to pay N1 billion and in addition, compensate the landowners and
secure the forestry concession license from both Ondo and Ogun State
governments.
The Guardian visited the company three weeks ago. It was observed
that the buildings acquired have been renovated, painted and looking
radiant, likewise the offices. The grasses and lawns were well trimmed,
while the administrative block and staff quarters, have also been given
new looks. The workers, according to investigations are over 50, 30 of
which are security guards, resuming at their duty posts everyday and
collecting salaries and other allowances, yet the company is not
producing anything.
Though the Managing Director of the company was not on seat as at time of the visit, nobody was willing to speak with the reporter, despite nondisclosure of his identity. But a top official of the company, told The Guardian in private that they never envisaged what they met on ground when they bought the company, noting that their major challenge is the obsolete equipment met on ground, coupled with unavailability of raw materials.
One key challenge faced by the investors, is their inability to source long fiber trees. This is a major problem the plant may likely continue to face even after becoming fully operational, as they are totally dependent on imported long fiber pulp and chemicals, which might not help in reducing the cost of local paper products.
It was learnt that core foreign investors, were always discouraged from partnering with the company whenever they come around to check what the company has on ground. Whenever it occurs to them that raw materials are not readily available, they take to their heels. The Guardian learnt that at the initial stage, the Federal Government established the company in Iwopin to get ready raw materials from Ogun and Ondo. But since Ondo has since pulled out, Ogun that is left does not encourage with raw materials.
“Another problem we are facing is electricity supply. We are not connected to the national grid; we are solely dependent on diesel. To start the engines, we’ll need four drums of diesel. Constant use of generator is definitely increasing our cost of production and hence the price of the products, thereby reducing the gains to the economy,” he said.
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Though the Managing Director of the company was not on seat as at time of the visit, nobody was willing to speak with the reporter, despite nondisclosure of his identity. But a top official of the company, told The Guardian in private that they never envisaged what they met on ground when they bought the company, noting that their major challenge is the obsolete equipment met on ground, coupled with unavailability of raw materials.
One key challenge faced by the investors, is their inability to source long fiber trees. This is a major problem the plant may likely continue to face even after becoming fully operational, as they are totally dependent on imported long fiber pulp and chemicals, which might not help in reducing the cost of local paper products.
It was learnt that core foreign investors, were always discouraged from partnering with the company whenever they come around to check what the company has on ground. Whenever it occurs to them that raw materials are not readily available, they take to their heels. The Guardian learnt that at the initial stage, the Federal Government established the company in Iwopin to get ready raw materials from Ogun and Ondo. But since Ondo has since pulled out, Ogun that is left does not encourage with raw materials.
“Another problem we are facing is electricity supply. We are not connected to the national grid; we are solely dependent on diesel. To start the engines, we’ll need four drums of diesel. Constant use of generator is definitely increasing our cost of production and hence the price of the products, thereby reducing the gains to the economy,” he said.
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