Revitalisation of Eleme Petrochemicals Company Limited (EPCL)

Eleme Petrochemicals Company is the only petrochemical plant in the West African sub-region; converting Nigeria's vast hydrocarbons resources such as natural gas liquid into intermediate products. The revitalised Eleme Petrochemicals Company Limited (EPCL), re-commissioned by Nigerian President on 12th October 2006, has been operating quietly since Indorama Group took it over. But in the past few days, EPCL has consistently been in the news. Firstly, Stanbic Bank, one of the newly recapitalised banks in Nigeria announced that it has received the nod to arrange with Fidelity Bank and UBA to raise US$160 million loan for Indorama for the effective revitalisation of the newly privatised petrochemical complex. Secondly, a few days later, the International Finance Corporation (IFC), the private sector arm of the World Bank announced a US$155 million loan agreement to support Indorama' s 75% equity in the company and for comprehensive turnaround programme designed to enhance its full-capacity operation and profitability. Thirdly, at a Senate Committee hearing, the Minister of Energy announced that Indorama was doing a fantastic job at Eleme Petrochemicals. What will be the socio-economic implications of the World Bank gesture on the operations of the petrochemicals company, and its multiplier effect on the economy of Nigeria? Several Nigerian processors, that were uptil now importing or couldn't afford to import, have started sourcing raw material from Eleme. This increase in production has lead to creation of job opportunities in the community. This would gradually translate into enhanced economic activities, more job creation, poverty reduction, more taxes for government, and better life for the employees and their dependants. It is indisputable that the World Bank's endorsement of the Eleme transaction and funding for comprehensive turnaround programme is an endorsement of the on-going economic reforms in Nigeria and confidence in Nigeria and Nigerians and also a vote of confidence on the technical, managerial and professional competence of Indorama Group. In announcing the US$155 million loan, the IFC is quite hopeful it would create value and greater multiplier effect. More and more foreign investments would be attracted to reinforce Nigeria's economy. More plastics companies would come on stream, endorsing the success story of Eleme as a success story of Nigeria. World Bank loan would help facilitate not only its full capacity operation but its community development programme as well as sustainable safety and environmental initiatives embedded in its Corporate Social Responsibility (CSR) package.