Nigeria Loses $120bn To Untapped Potential In Petrochemicals | Independent Newspapers Limited
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Nigeria Loses $120bn To Untapped Potential In Petrochemicals

Posted: Mar 24, 2016 at 3:00 am   /   by   /   comments (0)





Olisa Egbunike LAGOS


As the Federal Government moves aggressively to reposition the economy beyond crude oil and warehouse diversified income streams, Indorama Corporation, a major stakeholder in global petrochemicals industry, says Nigeria lost more than $120 billion in potential revenue over 20 years due to government’s poor perception about petrochemicals’ inherent potentials.

Indorama Corporation, the core investor in Indorama Nigeria, operators of Indorama Eleme Petrochemicals, Indorama Eleme Fertilizer and Indorama Port Complex, Onne, all in Rivers, hinged the nation’s inability to get such revenue in two decades to the absence of an enduring climate for foreign direct investments (FDI) in petrochemicals.

Mr Manish Mundra, Managing Director and Chief Executive Officer (CEO), Indorama Nigeria, said recently at Eleme, Rivers that poor incentives, dismal infrastructure, absence of policy document or blue print on petrochemicals made it unattractive for Nigeria to attract global investment giants in the sub-sector.

Mundra, who commended government’s efforts and commitment at diversifying Nigeria’s economy amid the persisting crash of crude oil prices in the international market, said that government needed a quasi marshal plan to attract foreign direct investment in the nation’s emerging petrochemical sector.

According to him, the huge and sustained foreign direct investment in the volatile nation’s of Iran, Iraqi, other gulf states and the entire South East Asia can only be explained and appreciated from those countries’ comprehensive blue-print on petrochemical industries.

He argued that it is also important for government and Nigerians to ascertain the reasons why ExxonMobil and Total, the two biggest global drivers in petrochemical, have shunned investing in Nigeria’s petrochemicals while committing billions of dollars annually in Saudi Arabi and other gulf states’ petrochemical industries.

“The reason is that Nigeria has never focused on petrochemical investment drive. Today oil price has gone down and everybody is talking about non-oil based revenue but non-oil based revenue does not come over night, it takes years to calculate and cultivate,” Mundra said.

Indorama Nigeria CEO, explaining passionately about the latent potential of the nation, said that Saudi Arabi and other gulf states proactively insulated future economic challenges, arising from global oscillation of crude oil prices in their development agenda by investing between $60 billion and $70 billion in petrochemical industries in the past two decades.

The Gulf States, he said, were never worried about the depressed crude oil prices because their governments used the returns from their investments in petrochemical industries to bridge possible gaps from dismal crude oil sales.

Mundra, who urged government to restrategise on petrochemical investments, identified the lopsided investment incentives for investors, lack of industrial infrastructure, absence of designated areas as industrial hub and inconsistence in economic policy directives as the bane of Nigeria’s industrial development.

He also suggested, among other things, phased incentives for interested foreign investors as part of the road map toward sustained petrochemical industry development in Nigeria.

Independent quotes Mundra as saying that the incentives should be segment or sector specific and driven also by the volume of the investment funds.

He described the subsisting approach of lumping incentives for all classes of investors in Nigeria as “highly unscientific and a major disincentive.”

On the success profile of Indorama so far, Mundra said that they took advantage of the nation’s gas resource and untapped agricultural potential to diversify into fertilizer industry for domestic consumption and export business.

Indorama Nigeria CEO, who declined to project revenue from both Eleme Petrochemicals and Eleme Fertilizer Companies, only said that they are championing and providing impetus for a diversified national wealth and revenue.