Union Dicon Salt Plc, on Wednesday, February 27, 2019, admitted that its efforts at diversifying from its core business of salt production and marketing into agribusiness, which began in 2014 with the appointment of CBO Capital as new core investor have failed.
The board announced its resolve that all matters relating to farming be put on hold.
In a statement dated February 21, 2019, titled “status report on Union Dicon Salt Plc,” the company said Col. (Rtd) Henry Mgbemena has been appointed acting managing director, following the removal of Chika Mordi and Ben Nwawudu of CBO Capital Partners, as MD and DMD respectively.
While Mordi resigned from the board, Nwawudu, however remains a director.
UDS recalled that it entered a management contract with CBO Capital Partner, which subsequently commenced diversification of the company
CBO Capital, it recalled, had upon assuming management, announced several partnerships, including one with the Delta State Government in cassava production, investment in the $100m Alape Staple Crop Processing Zone (SCPZ) in Kogi State. It also entered into agreement with PNG Gas in Delta State to supply gas to its proposed starch processing plant in Umutu, Delta State and acquisition of several hectares of land in Edo State.
The former management, the statement continued, signed another investment in the agro industrial sector, in addition to its earlier agreement for acquisition of 15,000 hectares of land in Edo State, in addition to a previous 2,000 hectares, both of which were expected to make UDS the largest cassava producer in Nigeria.
However, the statement continued, “the C of O of the land was revoked by the Edo State Government because the ground rent to be paid was not brought to the notice of the board of Union Dicon by the past management led by CBO Capital.”
As if this was not enough bad news, the past management also failed to inform the board of their intention to replace Cargill as core investor in $100m Alape Staple Crop Processing Zone (SCPZ), following which the project was eventually not achieved at the time CBO Capital left the management of UDS in 2017.
Continuing, the statement by the new acting MD lamented further that the planned starch processing plant in Delta, for which UDS signed an agreement with PNG Gas for gas supply was not established, following which the contract did not proceed.
“Negotiation and steps to establish the starch processing plant has been aborted with the exit of CBO Capital,” Mgbemena added.