Sam Hart Esq
A number of concerned individuals have made enquiries as to the situation at Modern Ceramics Umuahia. Here is an update on the true state of affairs at the factory.
Modern Ceramics Umuahia (MOCERAM) was established by the Government of the Eastern Region under the Premiership of the Late Dr. Michael Okpara in the 60’s as part of the industrial revolution of that era. The factory operated optimally until the outbreak of the Civil War in 1967 which affected it’s operations.
The factory was reactivated in 1972 but collapsed completely in 1996 due to obsolete equipments, vandalisation and asset stripping by successive managements over time.
The company was handed over by the Abia State Government to UCL Resources and Investments Ltd (UCL), a Special Purpose Vehicle incorporated by the Catholic Diocese of Umuahia on May 9, 2003 and now called UCL-Modern Ceramics Industries Limited (UCL-MOCERAM).
Under the present arrangement, UCL owns 80 per cent of Modern Ceramics Ltd, Abia State government, five per cent with the remaining 15 per cent reserved for undisclosed investors.
The Promoter of UCL-MOCERAM and Catholic Bishop of Umuahia Diocese, Most Rev. Dr Licius Iwejuru Ugorji, at the handing over ceremony disclosed that an Italian technical partner called FUCELLI-BRUNO was engaged for the rehabilitation of the factory adding that the company was sourcing for the sum of N3.2 billion at no extra cost to the state government to reactivate the factory.
In the course of sourcing for the funds, the Umuahia Catholic Diocese, which owns majority shares in the company, approached Diamond Bank Plc with an Abian as MD/CEO for a loan. The bank granted the company an equipment financing loan of N2B.
When the loan could not acquire all the equipments required for the reopening of the factory, the company again sought for additional funding. The Abia-born Diamond Bank MD again offered to help syndicate another round of financing for the company. The company signed all required documents for the new funds to be raised. Funds were raised from a consortium of lending institutions but a bizarre twist ensued. The bank withheld the new funds as repayment of the principal of the initial N2B loan granted and indicated that interest on the loan was still outstanding.
All entreaties by the Bishop of Umuahia to the Bank MD to at least allow the company use the new funds to complete the acquisition of needed machinery and resume operations proceeds from which the loan will be repaid fell on deaf ears.
As things stand today, UCL-MOCERAM is currently indebted to Diamond Bank to the tune of about N4.5B being outstanding interest accrued on the loan obtained in addition to the new funds raised which was withheld by the bank.
A caveat was also placed on the company by the bank that any investor seeking to reactivate the factory must first offset the outstanding indebtedness before any new work can commence.
Mindful of the importance of the factory to the economic architecture of Umuahia and Abia State both in terms of employment of surrounding indigenes and the corporate image of the Umuahia Catholic Diocese which has faced some odious derision from the populace for its inability to resuscitate the factory, the Abia State Government under Governor Okezie Ikpeazu has decided to intervene.
The Governor, despite the Abia State Government owning only 5% equity in the UCL-MOCERAM, has decided to commence negotiations with Diamond Bank Plc to commence the process of repaying the outstanding indebtedness of UCL-MOCERAM to Diamond Bank Plc so that the company can resume operations.
This is the current development as it concerns UCL-MOCERAM. More updates will be provided as events unfold.