Eleme Petrochemicals Company Limited (EPCL) was incorporated in 1988 as a wholly owned subsidiary of the Nigerian National Petroleum Corporation (NNPC), established to produce a wide range of petrochemical products from natural gas liquids. The plant, located near Port Harcourt, Rivers State, was a major component of Nigeria’s industrial development vision for value addition to gas and oil resources.
However, despite its strategic potential, EPCL was plagued by:
- Persistent operational inefficiencies
- Inadequate funding and underinvestment
- Poor corporate governance
- Low capacity utilisation (as low as 30%)
- Frequent plant shutdowns
These problems rendered EPCL unprofitable and a burden on government finances.
The Privatisation Process
In line with Nigeria’s economic reform agenda and guided by the Bureau of Public Enterprises (BPE), the National Council on Privatisation (NCP) approved the core investor sale of EPCL.
• In 2006, Indorama Group, a global manufacturing conglomerate headquartered in Indonesia, emerged as the core investor, acquiring 75% equity in EPCL.
• The Federal Government retained 15%, and 10% was reserved for the host community and staff.
Transactions
Following its acquisition, the company was renamed Indorama Eleme Petrochemicals Company Limited (IEPL). The transformation was both swift and remarkable:
- Operational Excellence
- Capacity utilisation rose from less than 30% to over 95%
- The plant was successfully rehabilitated and expanded
- Use of modern management and technical practices significantly improved productivity and efficiency
- Investment and Expansion
- Indorama invested over $1.5 billion in upgrading the existing plant and developing new industrial facilities
- Commissioned fertiliser plants, polyolefin plants, and a gas pipeline system, making the site a fully integrated petrochemical and fertiliser complex
- Employment and Human Capital Development
- The company retained all former staff and significantly increased employment
- It invested in training and development, including overseas training programs for Nigerian engineers
- Community Engagement and CSR
- Indorama established a robust Corporate Social Responsibility (CSR) framework
- Community equity participation (7.5%) ensured the host communities benefitted directly from the company’s profits
- Projects included scholarships, healthcare, infrastructure, and youth empowerment programs
- Export and Revenue Generation
- Nigeria became a net exporter of petrochemical and fertiliser products
- IEPL became one of the highest non-oil exporters in Nigeria, earning billions of dollars in foreign exchange
Recognition and Impact
- The privatisation of EPCL is widely hailed as a model transaction by the Bureau of Public Enterprises (BPE) and international observers.
- It has become a template for future privatisations in Nigeria’s oil and gas sector.
- It showcases how strategic private investment, combined with robust regulation and community engagement, can unlock value from state-owned enterprises.
The privatisation of Eleme Petrochemicals stands as a landmark success in Nigeria’s economic reform journey. It demonstrates how public-private partnerships can drive industrial growth, reduce the burden on government finances, generate employment, and contribute significantly to national development.
