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We Are Ready to Come Back, Peugeot of France Tells President Buhari

[dropcap]F[/dropcap]rench multinational automobile manufacturer, Peugeot (PSA Peugeot Citroen) has indicated intention to return and inject fresh investment into PAN Nigeria Limited, Nigeria’s Assembly plant, which it helped to set up in the 1970s and later abandoned.

The company’s Executive Vice President for Africa and Middle-East, Mr. Jean-Christophe Quemard, stated this at Presidential Villa, Abuja while having an audience with President Muhammadu Buhari.

Quemard assured Nigerian President that Peugeot was ready to reinvest in vehicle assembly in Nigeria, “provided that the right indigenous partners are found”.

Briefing the President on the company’s three-phased plan to resume vehicle assembly in Nigeria, he said his company plans to roll out 4,000 cars next year, and increase production to 10,000 cars by 2021.

He said that the plan, which he urged the Federal Government to support with appropriate policies and actions, would entail higher local content in the assembly of Peugeot cars in Nigeria.

He said the plan also included the exportation of locally assembled Peugeot cars from Nigeria to neighboring African countries.

Meanwhile, given the bad experiences recorded in past privatization of government-owned businesses, including Peugeot Nigeria, President Buhari vowed to henceforth ensure placement of higher premium on technical competence and financial clout of bidders in future privatization exercises, to avoid running aground of privatized companies by ill-equipped and incapable investors.

Peugeot Automobile Nigeria Limited was conceived in 1969 by the then Federal Military Government under the leadership of General Yakubu Gowon. And in the build-up to actualize the dream, 16 reputable vehicle manufacturing companies were invited to tender their proposals for the establishment of a vehicle assembly plant in the country. Thus, with the high acceptability and demand of Peugeot vehicles in the country, the proposal of Automobile Peugeot France (AP France) scaled through on May 7, 1971.

PAN Nigeria Limited, a joint venture between the Federal Government and AP France, was incorporated on December 15, 1972 and 27 months after incorporation, the Kaduna based assembly plant was commissioned by General Yakubu Gowon on March 11, 1975.

PAN commenced production on March 2, 1975 with an annual output of 60,000 cars, improving substantially to 90,000 cars per annum in the 1980s with more than 2000 staff on its payroll. PAN’s role in the industrial sector at inception was significant as it greatly relied on local suppliers who provided about 37% local content for production.

In November 2006, PAN was privatized in line with Government’s agenda to build a stronger, more competitive and diversified economy; ASD Motors emerged as the successful core investor and took over management of the company in January 2007.

The expectation was that the privatization of PAN would create a quantum leap in performance, but that has not happened as planned.

Following the accumulation of huge non-performing loans (NPL) indebtedness to banks, in October 2012, the Asset Management Company of Nigeria (AMCON) acquired the debts of the company and converted a portion to equity to help restructure the firm.

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