Crisis in WEMPCO, Western Metal Products Company, has resulted to the shut down of 19 enamelware firms and threatens about 250,000 jobs. WEMPCO is reported to be in debt at the tune of N90bn and is planning to sell its five-start Oriental Hotel on the Island. It is also revealed to be making plans to exit Nigeria. Hence, this may be the end for its steel plant of 700,000 tonnes capacity.
The firm before now was the authorized sole distributor of cold-rolled iron sheet. This is used in the manufacturing of roofing sheets and other materials for enamelware.
However, in a bid to protect local companies, the Central Bank of Nigeria included the cold-rolled iron sheet and annealed in the list of 41 banned items from access to official foreign exchange. By extension, this will result in all companies involved in the production of roofing sheets and enamelware shutting down with the exit of WEMPCO. This can already be seen as lots of companies manufacturing wheelbarrows and shovels are shutting down as they lack raw materials.
With the increase in the standard of roofing sheets to 0.015mm by the SON, serious competition challenged the smuggling of roofing sheets with 0.013mm and 0.014mm. The smuggled roofing sheets are however preferred by users as they are reportedly cheaper. This resulted in low patronage for WEMPCO as its stock rotted away and many pf its plants shut down as a result of no production.
Reports have however shown that WEMPCO has not been consistent in filling of orders and have also defaulted on the waiver given by previous government to aid production in Nigeria.
This waiver has been withdrawn by the current government as WEMPCO has continually imported its materials instead of manufacturing locally.
Fulfilling the customer demand became a Herculean task for WEMPCO as the importation routes are closed.
At the moment, the management of WEMPCO has not released any official statement concerning the rumors.