Anxiety as LADOL Sacks another Foreign Investor from Free Zone

ABIOLA Seun

Barely two months after Lagos Deep Offshore Logistics (LADOL) provider terminated the operating licence of Samsung Heavy Industries Nigeria (SHIN) Limited in LADOL Free Zone in Lagos; the deep offshore logistics provider has sacked another company, Africoat Nigeria Limited from the zone.

It would be recalled that Africoat was conceived to take advantage of the investment opportunities left in the pipe-coating market in Nigeria when Bredero Shaw decided to leave West Africa.

The Nigerian and expatriate personnel of Africoat is made up entirely of ex-employees of Bredero Shaw with extensive technical expertise in worldwide pipe-coating operations.

Africoat purchased a complete corrosion and concrete weight coating plants from Korindo in Indonesia in 2012, packaged for freight and shipped to Nigeria by charter vessel directly to LADOL, where it established a world-class warehouse for pipe-coating operations.

However, Africoat has received a final notice from LADOL for the removal of its equipment/properties from the free zone after it had earlier terminated the Services Agreement it signed with Africoat.

It was gathered that because the company’s operating licence was not renewed and its service agreement terminated, the company has lost opportunities of getting new businesses.

A source in LADOL had earlier confirmed that Africoat failed to pay rent fees and file quarterly data and annual returns to LADOL.

“Africoat also failed to commence operations since the completion and rental of the pipe-coating facility. It also defaulted in the payment of ground rent and service charges,” the source added.

But an Africoat official who spoke to journalists, blamed his company’s predicament on what he described as the “toxic environment created by LADOL for companies operating in the free zone.

“LADOL Free Zone is currently a toxic environment to operate as the company is in conflict with the only two independent operators in the zone – Samsung Heavy Industries Nigeria Limited and Africoat. Many Nigerians are losing their jobs because of these conflicts.

“The solution to the crisis is for the federal government to encourage competition by issuing other free zone management operator’s licence at LADOL. The quaysides should also be open for other operators to utilise because it belongs to Nigerian Export Processing Zone Authority and Nigerian Ports Authority (NEPZA/NPA).

How can the federal government attract foreign investors and a Nigerian company chases the investors away after the investors have established operations in Nigeria? Competition is the solution to this impunity,” he explained.

The final notice dated November 21, 2018 and addressed to the Managing Director of Africoat Nigeria Limited, Mr. Butch Ford, was signed by Mr. Anthony Onyeamama, representing Detailed Commercial Solicitors, which acts on behalf of LADOL.

Part of the letter read: “Please be advised that the timeframe given to Africoat by our client to move out all their equipment/properties from our client’s facilities had since elapsed on July 20, 2018, while we note that Africoat are yet to comply with this demand.

“However, our client is constrained to give Africoat up till November 30, 2018 to move out all their equipment/properties from our client’s facility as a sign of good faith on its part.”

Before this final notice was issued, another letter from Detailed Commercial Solicitors (DCS), dated June 29, 2018, had terminated the agreement between LADOL and Africoat over what the law firm described as Africoat’s payment default.

The letter, which was also signed by Mr. Anthony Ezeamama and addressed to the Managing Director of Africoat Nigeria Limited, was titled “Re: Services Agreement –Notice of Termination.”

According to the letter, “we act for Ladol Integrated Logistics Free Zone Enterprise (LILE) and write further to the Services Agreement between Africoat Nigeria Limited and our client dated June 7, 2013 and amended Services Agreement dated November 27, 2015.

“Following Africoat’s refusal to comply with LILE’s notice of payment default dated June 4, 2018 for the settlement of its outstanding invoices, LILE hereby terminates the Services Agreement with immediate effect from the date of receipt of this letter.

”Take notice that the termination of the Services Agreement is without prejudice to Africoat’s obligation to pay the accrued outstanding sum to LILE together with its fulfilment of all its outstanding obligations to LILE at the effective date of termination of the Services Agreement.”

It was also gathered that Africoat had received a second letter from DCS dated July 13, 2018, which placed Africoat on notice that the company’s workers will no longer have access to Africoat’s facility because they would not be allowed into LADOL Free Zone.