Business
Abia Modern Ceramics Industry to soon bounce back
From PETER OKORE, Umuahia
There are clear indications that the moribund Modern Ceramics Industry, Umuahia, Abia state would soon bounce back to life after many years of neglect and abandonment. Reliable sources say the Abia state government has opened-up fresh negotiations with choice commercial banks and Institutions on how to give a clean bill of health to the Industry, which will empower it to commence operations on a clean slate.
To this end, the state governor, Dr Okezie Ikpeazu, has constituted a 7-man panel of Inquiry, headed by a High court judge, Justice A.U. Kalu, to look into the immediate and remote causes of the collapse of the one-time viable industry and advise government accordingly.
Inaugurating members of the panel of inquiry at the Government House, Umuahia, recently, Governor Ikpeazu, represented by his Deputy, Sir Ude Oko Chukwu, declared that revitalizing the Modern Ceramics Industry, Umuahia, which once determined the economy of the state and entire geo-political zone as well as provided employment to many and enhanced the socio-economic lives of the citizenry, is very dear to his administration,
He, therefore, urged members of the Panel to look into the problems of the moribund UCL- Modern Ceramics, Umuahia and come out with recommendations that will enable the government to resuscitate and bring the industry back to life. He stressed that the government will be delighted to have a detailed report from the panel and called for realistic and prompt recommendations for immediate actions to be taken.
The governor, further charged members of the panel to carefully review all the loans taken by UCL from such banks like Diamond Bank, Bank of Industries and others and ascertain what and how the loans were used.
Other Terms of reference to the panel include: “To ascertain the total investment of the UCL in the Industry and the role the Board of UCL has played from inception in 2006 till date and any other matter that they consider important on the activities of the board and supposed creditors, to revamp the Industry back to life.
The governor, however, assured members of the panel of support in carrying out their assignment.
Responding on behalf of other members of the Panel of Inquiry, the Chairman, Justice A.U. Kalu thanked the governor for finding them worthy to serve in that panel and assured that they will provide answers to the numerous anticipated questions about the Modern Ceramics Industry as well as come out with recommendations that will enable the government to revitalize the Industry by being objective and fair in their investigations.
BusinessHallmark understands that the defunct Modern Ceramics Industry, Umuahia (MOCERAM) was established in the ’60s by the Government of the Eastern Region of Nigeria, under late Dr Michael Okpara, as Premier. That industry and the Golden Guinness Breweries, as well as the other industries that adorned the former Eastern Region under Okpara, came on board as part of the Industrial Revolution programmes of that era. The factory operated optimally until the outbreak of the Nigeria/Biafra Civil War in 1967 which affected its operations.
Modern Ceramics Industry was, however, reactivated in 1972, but collapsed completely in 1996 due to obsolete equipment, vandalisation and asset stripping by successive managements over- time.
As a result, the Abia State Government handed over the management of the Modern Ceramics Industry Limited to UCL Resources and Investments Ltd (UCL)- a Special Purpose Vehicle incorporated by the Catholic Diocese of Umuahia, on May 9, 2003, under the new company name of UCL-Modern Ceramics Industry Limited (UCL-MOCERAM).
Under the new Equity shares arrangements, UCL owns 80 per cent(80%) of Modern Ceramics Ltd; Abia State government has five per cent (5%) while the remaining 15 per cent(15%) was reserved for prospective investors.
The Promoter of UCL-MOCERAM and Catholic Bishop of Umuahia Diocese, Most Rev. Dr Lucius Ugorji, at the formal handing over ceremony in 2003, hinted that an Italian Technical partner called, FUCELLI-BRUNO, was engaged for the rehabilitation of the factory. He further disclosed that the company was sourcing for the sum of N3.2 billion, at no extra cost to Abia state government, to reactivate the factory.
In the process of sourcing for the facility, the Umuahia Catholic Diocese (major shareholder in the company), approached the Diamond Bank Plc for the loan. The Diamond Bank granted the company an equipment financing loan of N2 billion. But when that loan could not purchase all the equipment needed for the re-opening of the factory; the company again sought for additional funding. Diamond Bank again, offered to help syndicate another round of financing for the company. The company signed all the required documents for the new funds to be raised.
The required funds were raised from a consortium of lending institutions, but a bizarre twist ensued later. Diamond Bank, plc with-held this new funds, as repayment of the principal of the initial N2 billion loan granted and insisted that interest on the loan was still outstanding.
All entreaties by the Catholic Bishop of Umuahia to Diamond Bank to, at least, allow the company use the new funds to complete the acquisition of needed machinery and resume operations, while proceeds from the loan will be repaid; fell on deaf ears.
The summation of it all is that, as at today (time of doing this report), UCL-MOCERAM is indebted to Diamond Bank to the tune of about N4.5 billion, being outstanding interest accrued on the loan obtained; in addition to the new funds raised, which was withheld by Diamond Bank.
A caveat was also placed on the UCL-MOCERAM by the bank that any investor seeking to reactivate the factory must first off-set the outstanding indebtedness before any new work can begin.
Faced with these difficulties and worried by the enviable role Modern Ceramics played during its glorious days, the Abia state governor, Dr Okezie is, according to informed sources, opening fresh negotiations with the Diamond Bank Plc, now Access bank, to commence the process of repaying the outstanding indebtedness of UCL-MOCERAM to so that the company can resume operations.
Nevertheless, another option open to UCL- Modern Ceramics, Umuahia, is probably, to explore the chances being offered by both the Federal Government and Central Bank of Nigeria (CBN) supports to enterprises, in particular. These supports to Micro, Small and Medium-scale Enterprises, MSME’s, are designed to serve as palliatives to cushion the economic fall-outs of COVID-19 pandemic.
According to the Vice President Yemi Osinbajo, and the CBN governor Godwin Emefiele, these palliatives reflect the present administration’s determination to support MSME’s and the priority the Federal Government places on small businesses.
Osinbajo noted that as businesses across the world confront the disruptions caused by the Coronavirus pandemic, the Federal Government will continue to adopt and implement practical measures to ensure that the projected growth in the Micro, Small and Medium Enterprises (MSMEs) sector is not seriously affected by the development.
The palliatives include E-Registration of MSMEs/products at 80% discounted rate over six months. Zero tariffs for the first 200 micro and small businesses to register on the E-platform. Also, there is a waiver on administrative charges for overdue, late renewal of expired licenses of micro/small businesses products for 90 days.
