Thursday, 6 October 2016

Recession: Tomato Paste Company, Erisco Foods shuts down Operation

Lagos-based tomato paste company, Erisco Foods Limited, has shut down its $150m plant, as about 1,500 employees of a the firm are set to lose their jobs. The Chief Executive Officer of Erisco Foods Limited, Chief Eric Umeofia, disclosed this on Wednesday in Lagos, attributing this to scarcity of foreign exchange.

Umeofia said he decided to shut down for one month over what he described as frustration in sourcing foreign exchange from the Central Bank of Nigeria.

According to him, if at the end of 30 days, the situation does not improve, he will move his manufacturing firm out of Nigeria.

He said, “We cannot get forex to buy machinery. We run our big factory with forex sourced from the parallel market at the exchange rate of N450/dollar. The companies that get forex at the official exchange rate are those that import items included in the list of items not valid for forex.

“We cannot continue this business because we are running at a loss while importers continue to flood our markets with banned tomato paste and prevent our products from selling.”

Umeofia said about 1,500 of the company’s 2,000 workers in the Lagos factory would have to go.

Following the decision to close down the business, some of the employees of the firm protested the action on Wednesday. They carried placards with various inscriptions calling on the Federal Government to save their jobs.

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