Cross River State Commissioner for Commerce and Industry, Peter Egba, fielded questions from DAVID ODEY, our correspondent in Calabar, on the Industrial Park, garment factory and other projects initiated and executed by the governor of Cross River State, Prof Ben Ayade, and how they could impact the economy of the state.
What impact will the Industrial Park have on the economy of Cross River State after it is commissioned?
Industrial park generally is an area set aside mainly outside the main residential area where infrastructure are provided such as road network, internet facilities, street lighting, parameter fencing, drainages and all that. The idea behind it is that there is need to have a single operation where, when people come into Cross River State, they will have a place in which they will build their factories. And when they come around, they don't have to start worrying themselves about providing the initial infrastructure. The government would have provided the infrastructure already, waiting for them to come and construct their factories and start running them. It has a whole lot of benefits. One of the benefits it has is that it helps you to shorten your break-even point--the period in which you are supposed to start making profit, it shortens it in the sense that instead of going around a virgin place looking for funds to build your infrastructure, that aspect has already been absorbed by the state government. So, what you just need is your operating expense and just a little space where you now build your main factory. It helps also to share facilities. Instead of companies trying to build different power plants or spend extra income to take power to different locations, we bring power to a single location where the industries are going to be situated. It reduces cost and that money can now be ploughed into different ventures that can also yield dividends to the state. That is one of the advantages as well. What we are trying to do now with this industrial park is to speak with Nigeria Export Promotion Zone Authority (NEPZA) to make this place free economic zone centre. We have already gone 70 per cent in that aspect already. What that tends to address is that everything we produce here, and maybe produce for export is duty free. The raw materials you bring to produce in your factory will be duty free as well as long as you bring them within the industrial park. These are some of the things we are putting in place to ensure that everything runs very well in the industrial park and ensure that investors come here to invest.
Are we not going to have the same problem we have with Tinapa that ran into problem and looks like a white elephant project?
It is not going to be the same. If you check, when the initial license for Tinapa was got, there were some legal frameworks which were not met. And because of that it took a whole lot of time for that to be done. For the industrial park, we don't need to pass through all those hiccups. We have already set every machinery in place. It is not encumbered. Government took the place for public interest and that is why you see massive infrastructure going on here. All the foreseen challenges have already been incorporated into the feasibility study. And the feasibility study has already addressed all these. So the issues we had in Tinapa will not repeat themselves in this particular location.
How many companies have already bought into this project?
Already, three companies have already indicated interest to build here. One of them is a fabricated steel factory; the second one is a company that wants to produce PVCs used for modernized ceiling. And the third one is that the state government is picking a location here to build an instant noodles factory.
How soon will the industrial park be commissioned?
It is 80 per cent complete. So, what we are doing now is the road network. We have already done what they call MC1, which is putting the stone base and then putting light tar on it. We believe that on or before the end of June, the industrial park will be 100 per cent ready, because the drainages have been completed, the solar power is already done, the internet facilities are installed in the solar panels. So, before the end of June everything would have been completed and commissioning done.
How much was invested in the industrial park?
From the budget and also from the procurement process, it cost N4 billion to establish it. That is a conservative estimate. If you have seen how this land was, you see that hill over there, that was how the whole of this place was. It took us so much on earthwork alone to bring it down to the level it is now. If not that we have a governor that is cost-conscious, if it were some states and even the federal government that wants to embark on such a project, it will take nothing less than N10 billion. But it cost us N4 billion.
Recently, there was a dispute over part of the land here. The natives said they won't release the land because they have not been compensated. Has that issue been addressed?
The land we had a little challenge with was not part of the industrial park. It is that swampy area. The state wanted to open up an estate, a virgin estate and link up to the river down there. That was the area that was a little encumbered. That problem has been addressed. If you go a little down there, you will see that work has resumed there. But it didn't affect the industrial park in any way.
Everything we have seen here is all about investment and what will be the yield thereafter? If you look at government investment in the area of tourism, let's look at Marina Resort for example. The place is almost dead. Tinapa is almost dead also. The Botanical Garden close to Mary Slessor Roundabout is also gone. What are we looking at? These are investments that would have been yielding IGR for the state. But they are gone. Now government is focusing on the industrial park. Maybe another government comes in and creates something else for itself. So, where are we going?
We are not abandoning those projects which the former administration embarked upon. Tinapa as you have mentioned, the Marina Resort, the Botanical Garden, we are not abandoning them. Like the Marina Resort, his Excellency has said clearly that he is going to revamp it and the same thing with Tinapa. That is the reason why, in spite of our lean resources, we had to ensure that we complete that mono rail that links Tinapa with the International Convention Centre so that investors or people who come for workshops or conferences at the CICC could lodge at the Lakeside Hotel at Tinapa. Beyond that, most of those four emporia we have in Tinapa, the investor we have from China for the garment factory wants to use two of the emporia as another production outlet for the production of jeans trousers and shirts basically for export. It is an export line because of the free economic zone status Tinapa enjoys. So, we believe that when he produces there it will be easier for him to export and also take cognizance of the AGOA (African Growth Opportunities Act) opportunity and make our export to American market very easily. So, we are not abandoning those projects. We are very serious about them and they will come on stream very soon. What we intend to do here is that, even if another government comes around, just as you have asked, I believe that before his Excellency leaves after eight years by the grace of God, most of the projects, most of the investments we are doing here, there would have been arrangements in place where they will not be solely left for the government to run. We have designed a model that will divest our interest as a state. When we divest our interest as a state, private investors will come around, invest in the businesses and run them as private businesses. Maybe the state could own like 20 per cent to 30 per cent as the case may be. That is the only way we can sustain all these industries we are building. If we leave them to run as government businesses, their sustainability will not be guaranteed.
In the garment factory, everything we are seeing is sewing. We have not seen anything about garment manufacturing. It is ironical that you call it garment factory whereas what is going on here is tailoring...
What is going on here is not tailoring. It is garment production. You came at a time we are making school uniforms. We have made other things. Like I mentioned earlier, we have two outlets in Tinapa where we are going to produce jeans trousers, the tops for export. You cannot call that tailoring. I thought what you were going to ask is that we are not producing our own fabrics.
Yes, we were coming to that. We have not seen any machine here that produces the fabrics used for the garments produced here…?
We have not reached that level. We are getting there. What we are doing now is a garment factory. It is not a tailoring outfit. It is a garment factory because here you have different units. Look at the first line here, these guys are basically in charge of cutting the fabric. The second line is basically sorting. The third line is basically weaving. After that it goes to button hole, a different section entirely. From there it goes to another section that fixes the buttons with machines before it now comes to safety control where the workers make sure the button is properly fixed and all that and then take it to tailoring. You can't have all that in a tailoring shop.
But you have all these stages in a tailoring shop but on a smaller scale. What we would have loved to see is a linen producing machine that will convert cotton to yarn and then fabric…
We will get to that. We have gone to Yala local government, Woda precisely, to plant cotton. Our soil in the northern part of the state supports cotton cultivation very well. The first cotton was cultivated in December last year. There is one in Ogoja, there is one in Yala. The yield was huge. We have partnered with Arewa Textiles to build a ginnery where they will convert our cotton to yarn. It is from the yarn that they will produce the fabric and send to us as part of the backward integration. So, they are already working on that. We have had the first harvest. We did a show of it. The whole world saw it.
Most of the workers at the garment factory are undergoing training which ends in September. So, what happens after that?
These guys came in here in October 2016. Most of them did not know how to put thread in the needle. So, we trained them intensively for two months. We brought consultants from Abuja who trained them very well. After that they have worked for over a year. They are full staff of the garment factory. They are no longer trainees.
Have they got their employment letters?
What happened is that, because of the high turnover, we are like trying to streamline. We have discussed with his Excellency and he has given us the green light to work on their appointment letters. As at the last count, 300 letters were ready but we want all to be ready before we issue it to them.
So, how come somebody has worked for one year before you are giving him employment letter?
Because we needed to ensure that they actually acquired the required skill we wanted. You know training is a continuous process. Apart from the two months training, the training they have on the job is usually more important and faster for them than for someone to come around to train them. The level they are now we can certify that they can stand on their own. And so, we can now regularize their appointment. But again they have been absorbed already as full staff over a year ago.