Succour for newsprint industry as FG sells Oku-Iboku for N3.8bn

The company is one of the three paper mills slated for privatisation in the current phase of the privatisation programme of the Federal Government.

The privatisation process of the company commenced alongside those of two other paper mills - Nigerian Paper Mill Limited, Jebba and Iwopin Pulp and Paper Company Limited, Iwopin - which have both been concluded.

The preferred bidder beat three other companies namely, Grandbond Guaranty Limited, Industrial Restoration Limited and Mahogany Oil and Gas Limited to clinch the deal.

Grandbond, the reserved bidder at the close of the first round though offered the highest bid of $32 million was later disqualified for presenting cheque of N1.858.240 billion instead of bankdraft as required by the process, representing 50 percent of the bid offer.

Adekanola Olusola, the liquidator of the company who announced this yesterday in Abuja at the close of the liquidation exercise challenged the new owners to justify their ability to reposition the organisation which has been moribund for 15 years.

On the problem of power generation, Olusola explained that arrangements are ongoing to put in place independent power plants.

"One of the fears that had been repeatedly expressed by investors is the availability of power supply for the company’s operations at affordable cost. Recent developments in the power sector have laid the fear to rest," he said.

The ongoing power projects include the 90 megawatts which is presently being upgraded to 190 megawatts gas turbines at Ibom power plant and 500mw Greenfield power plant at Odukpani from NNMC mill site

The construction of the steel tower that will carry the 330KV transformer from the station to the PHCN injection station at Ikot Nya has reached advanced stage, he said.

Both Mahogany Oil and Gas Limited presented offer of $10 million with no financial commitment while Industrial Restoration with $25 million was nullified for not enclosing the recommended 50 percent draft of the entire bid offer.

Irene Chigbue, director-general of Bureau of Public Enterprises (BPE), explained that "Nigeria can not continue to have a supposedly profitable venture like NNMC lie in waste, while spending scarce foreign resources on massive importation of newsprint."

She the earlier of earlier attempts to liquidate the company to the inability of John Silver Nigeria Limited which emerged as the preferred bidder and O-Secul Nigeria Limited as reserved bidder to meet up with the financial obligation of the bid.

NNMC was established in 1975 with an installed capacity of 100,000 metric tones of paper products yearly, specialising in production of newsprints and allied products.

90 percent of the company’s equity is owned by the Federal Government, 5.5 percent owned by Akwa Ibom State while Cross River State owns 4.5 percent of the equity.

NNMC owns and operates a jetty licensed by the National Inland Waterways Authority in addition to 82 blocks of flat and 103 buildings of various categories at 90 percent completion.

Its forestry division has a total of 15,391 hectares of gmelina and 18 hectares of pine feed, as well as 21,700 hectares under developed land for expansion of gmelina production.

Emmanuel Ijewere, a member BPE’s technical committee, advised the winner to realise that winning the bid was just the beginning of the hard work needed to revamp the newsprint company.

He said 80 percent of the books read in Nigerian schools today are imported, adding that the trend was increasing.

"Nigeria needs you to reverse the trend, and for you to achieve that, you must work

very hard," Ijewere said.

Musa Ojeifo, the group chief operating officer of Negris Holdings, said the company was aware that it must work hard if it was to revamp the company. "We are determined to do whatever it takes to rebuild the company," he said.