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Hope Rises as New Core Investor Acquires PAN, Injects N5.7b Lifeline

-By Ironhand S. Chukwuemeka

Nigeria’s automotive policy and the drive towards restoring PAN Nigeria Limited to its former number one position received a veritable boost recently when the Asset Management Corporation of Nigeria (AMCON) officially handed over the company to a new core investor, Nesbitt Investment Nigeria Limited.

There was excitement at the ceremony held at the plant in the Kakuri area of Kaduna, as the enthusiastic new core investor consortium known as Nesbitt team raised hope of a return to better days by announcing plans to inject a total of USD150 million (about N5.7b) in the next three years.

This, the core investor explained, was with the aim of awakening “this huge sleeping giant of immense economic potentials.”
Speaking at the hand-over event, the new PAN Nigeria Chairman, Hon. Ahmed Wadada Aliyu, said the investors were humbled and fortunate to be in the saddle, even as he thanked AMCON for the opportunity to undertake the task of repositioning the once leading auto maker in the country.

NESBITT takes over PAN

Aliyu, a former lawmaker who represented Keffi in NaNESBITT takes overssarawa State explained that the N5.7b investments would be ploughed into retooling and upgrading of the assembly line, support infrastructure, and working capital.

The PAN Chairman further remarked, “We treasure our human capital and strongly believe in them to drive our visions and aspirations for PAN Nigeria, and that is why we are immediately putting in place an attractive condition of service that will retain and motivate our human capital and also attract the best hands, so as to restore the company to its number one position in Nigeria and within the ECOWAS region.

“PAN under the supervision of the board shall undergo massive restructuring, and in doing so, we shall observe strict corporate governance, transparency, business integrity, efficiency and ethics, in all our undertakings.

“As the core investor, we strongly believe in the principle of responsible, responsive and sustainable investments, while we add not only financial muscle and strength, but also social value to the investments we embark on. We will not only be providing employment, but we shall also provide economic benefits throughout the supply chain and to local service providers (local content).”

Lamenting the unfavourable figures which showed that at least 400,000 used {tokunbo} cars, compared to only 68,000 new ones, were imported into the country in 2019, the Nesbitt team pledged to redress the imbalance by ensuring that PAN Nigeria introduces brand new vehicles that would be affordable to the buying public across the country.

“We will also be introducing a robust car financing scheme which will be a collaboration and partnership between our dealerships and a few selected banks. This will be in fulfillment of President Buhari’s wish for Nigerians to afford brand new vehicles,” Aliyu assured.

As the resurging number one assembly plant in the country, PAN, he pledged, would take the lead in engaging stakeholders like the National Assembly; Federal Ministry of Trade, Industry; and Investment, National Automotive Design and Development Council, NADDC; Manufacturers Association of Nigeria, MAN; among others, to take the automotive industry out of the woods.

The Chairman, however, expressed deep concern over a situation where a good number of the more than 50 assembly plants approved as part of the Nigeria Automotive Industry Development Plan (NAIDP), have not made any matching investments, but are enjoying the incentives spelt out in the auto policy.

His reference to one of the obvious drawbacks in the NAIDP echoes the criticisms by some stakeholders who have at different times alleged that some of the incentives are being abused by some unserious ‘plants’ with shallow investments.

Specifically, when the auto policy took effect on July 1, 2014, it imposed a total of 70 percent tariff on the importation of fully built up vehicles, but permits companies that assemble same locally to import one vehicle for every one that rolls out of their plants (paying concessionary duties).

Hon. Aliyu also spoke on other related issues, saying “PAN Nigeria will initiate conversations with the NADDC to enforce the assembly classification and equipment standardisation.

“We will be appealing to the Central Bank of Nigeria to support us and all other genuine assembly plants, so that foreign exchange is made available for our imports.”

He appealed to President Muhammadu Buhari to fast-track the legislative process that would lead to the NAIDP Fiscal Incentive and Guarantees Bill being passed again and signed into law, to enhance its effective implementation by the NADDC.

As the construction of a new Peugeot plant by another company reaches advanced stages also in Kaduna, it is not certain if the new PAN Nigeria brand and product line-up will include the roaring lion-badged vehicles with French DNA that once ruled the Nigerian market.

But, industry watchers believe that with the huge capital inflow, right product (vehicle) mix, and efficient management, there is sunshine in the company’s horizon. Presently, the plant is meeting the needs of a section of light commercial vehicle buyers with the assembly of Higer products.

Peugeot Automobile Nigeria Limited popularly known as PAN, now PAN Nigeria Limited, was inaugurated by Gen. Yakubu Gowon, on Friday, March 14, 1975, as a joint venture between the government of Nigeria, Automobiles Peugeot of France and Nigerian shareholders. It had installed capacity for 20, 000 cars in one shift.

There was, however, a later switch in ownership when the Federal Government divested itself of its interest in the company as part of the Olusegun Obasanjo regime’s privitisation programme which commenced in 2005, following which a leading Peugeot partner, ASD Motors, emerged the core investor.

However, in 2012, AMCON took over the management of the auto maker until the new core investor, Nesbitt Investment Nigeria Limited, struck a deal with the asset management authority recently, after indications of interest over the past eight years by investors, including some of Nigeria’s largest conglomerates.