The Manufacturers Association of Nigeria (MAN) has attributed the continuous departure of multinational companies, including the recent exit of Jubilee Syringe Manufacturing (JSM), to the challenging business environment in the country.
Owned by Turkish national, Onur Kumral, Jubilee Syringe Manufacturing, a subsidiary of VKS Group of Companies once regarded as Africa’s largest syringe manufacturing venture was drawn to Akwa Ibom State by the Governor Udom Emmanuel administration in 2017.
The firm had previously secured a $1m credit facility and planned to expand beyond syringes into gloves, masks, and infusion sets but a memo addressed to employees confirmed the closure of operations on December 31, 2022, attributing it to the need for ‘temporary measures to ensure the long-term sustainability of the company’.
This follows the wave of multinational departures from Nigeria, including Procter & Gamble, GlaxoSmithKline, Sanofi-Aventis, and Equinor. These companies have attributed their exits to economic uncertainties and the challenging business environment.
The memo titled ‘Temporary Redundancy – Service Not Needed Till Further Notice’ and signed by Managing Director of JSM, Akin Oyediran reads in part, “We trust this message finds you in good health. With a heavy heart, we write to you today to communicate a challenging decision that Jubilee Syringe Manufacturing Company Limited has had to make due to unforeseen circumstances affecting our business operations.
“After careful consideration and a thorough evaluation of our current business situation, we regret to inform you that we must implement temporary measures to ensure the long-term sustainability of the company. Unfortunately, this includes placing all positions including yours on temporary redundancy effective January 1, 2024.
“We want to emphasize that this decision is not a reflection of your individual performance or dedication to the company. The challenging business environment we find ourselves in, has compelled us to take these difficult steps. Please return all company belongings in your custody. Thank you for your understanding and cooperation during these challenging times.”
Oyediran had confirmed to PREMIUM TIMES in an interview that the shutdown was triggered by the harsh economic situation in the country.
“We have temporarily suspended our operations. Our plan is to resume operations stronger and more robust. The economic challenges have significantly impacted our company. We are actively exploring various avenues for financing and restructuring. Therefore, our current strategy involves organizational reformation with the intention of returning in the future,” Oyediran stated.
Commenting on the specific obstacles the company is confronting, Mr. Oyediran highlighted, “Import duties on raw materials are exorbitant, the dollar exchange rate is high, and the cost of power is soaring. We are actively pursuing initiatives to invest in alternative power sources to ameliorate the situation.”
The Director-General of the Manufacturers Association of Nigeria, (MAN), Segun Ajayi-Kadir in an interview told The Punch, that companies leaving Nigeria are reaching a ‘breaking point’ due to the challenging employment environment.
Though, JSM has clarified that it is restructuring, and not shutting down its operations in Nigeria.
The Managing Director of VKS Group of Companies, Onur Kumral, said in a statement to clarify the previous one, which claimed that the company, in Onna, Akwa Ibom State, was shutting down its operations due to Nigeria’s harsh economic environment.
Mr Kurmal explained that the restructuring phase will only make the company experience a brief break within this period.
