Recently, the Abia State Government announced the acquisition of Star Paper Mill Ltd from the Asset Management Corporation of Nigeria (AMCON).
This was after several years since the company went moribund, throwing thousands of direct and indirect staff into the labour market.
The Star Paper Mill was a notable Aba-based Indigenous company that was outstandingly reputable for producing high quality paper materials, especially tissue papers and exercise books. At a point in Aba, if you didn’t have Star exercise book as a primary or secondary school student, you were seen as a “mugu”.
In line with his campaign promise to bring back to life all moribund industries that once impacted the economy of Aba in particular and the state in general positively, Governor Otti swung into action and began the process of recovering the company and others.
While Governor Otti was making efforts to acquire the company, news filtered in that some other investors from outside the state were also making serious effort. In fact, a particular company had made an audacious offer, far bigger than the amount the state finally paid to acquire the company.
Governor Otti swiftly deployed his contacts and influence, bringing his negotiation skills to bear and paving the way for the successful acquisition of the company.
Governor Otti didn’t just acquire the company on behalf of Abia State; he did so at a cost that shocked everyone – N2.5billion. If you’re a businessman or come from a family that has a business background in Aba, you will appreciate that this is more than a masterstroke.
In acquiring the company, Governor Otti took a few things into consideration.
First, the job opportunities it would create when revitalised. Two, the insecurity it would help fight through job creation.
Three, the popular brand that’s about to be restored. Four, the pride of Aba that is being regained.
Five, the encouragement and inspiration it would drive in the minds of other willing local investors, especially Abians.
As expected, some people, especially members of the opposition have criticised the acquisition, describing it as a bad investment. The criticisms have largely been anchored on two grounds. One, that the company’s assets, especially production equipment, have become obsolete and useless. Secondly, that printing press is no longer a lucrative business, therefore there would be no return on investment. These views, including those made in bad faith and aired without decorum are all respected. That’s part of democracy.
However, as a Bende man with some business understanding, I would like to narrow it down to buying and selling, backed by some empirical data.
Sometime in 2021, my boss, the present Governor of Abia State, Dr Alex Otti, had asked me to look for a location in Aba for the establishment of the branch of the about-to-be-opened Signature Bank. I got a six plot of land belonging to a well-known senior citizen. They were only disposed to selling the entire six plots at N600 million. I suggested to Dr Otti that part of the land could be used to build a shopping mall since we didn’t need up to six plots for the bank. He asked me to go ahead and tidy up the discussion for the purchase. Midway into my discussion with the representatives of the sellers, I discovered that the children of the man were at war with each other over the property, so I called off the transaction.
Fast forward to 2025, my kinsman, a businessman, purchased five plots of land in the same location for N1.5 billion. That’s N300 million per plot. Of course, this development is predicated on the transformational leadership of Governor Otti, which has impacted positively on the value of properties in Aba.
I do not know the exact number of plots of land on which the Star Paper Mill Aba sits on, but anyone who has the smallest idea about the value of properties in the city presently will agree that the empty plot of the company located along Aba Owerri Road cannot go for anything less than N1billion, excluding the buildings.
Additionally, the Star Paper Mill at Owerrinta occupies 10 hectares of land. If you’re to measure by 500 square meters per plot, this would give you 200 plots. If a plot goes for N10 million, this would give you N2billion. This my layman’s arithmetic did not consider the material assets of the company, especially in Aba. Simply put, Governor Otti has already generated a substantial profit for the state, even before production commences.
Profitability
Some of the items/services that are still being produced and rendered in large quantities today by a Paper Mill include, but are not limited to, paper bags, cartons for packaging, books of all kinds, Tissue papers, serviettes, souvenirs, etc. Demands for all these come in millions.
The argument that the printing press is no longer profitable is baseless. Honestly, that’s obviously an argument made in bad faith. In siting an industry, one of the most critical factors for consideration is population. Given the population of Aba in particular and Nigeria in general, and the high volume of demand for most of the aforementioned products, it’s safe to say that this is one of the most sensible and profitable investments a state government has made in Nigeria in recent times.
The real challenge that was not mentioned
Star Paper Mill didn’t disappear because of lack of patronage, but because of government-induced failure.
Because the Star Paper Mill was synonymous with quality, the cost of production was high. Sadly, when power generation became a serious issue, the company was unable to compete with goods being imported from China, which were cheaper due to the low cost of production.
Solution
With Governor Otti’s intentional and patriotic involvement and investment in the power sector in Abia State, he is carefully laying the foundation for the re-industrialisation of Aba. This development would enable the Star Paper Mill to return to profitability following revitalisation.
Conclusion
I commend those who have genuinely asked questions and expressed concerns about the acquisition and government’s intentions, and wish to restate Governor Otti’s assurances that beyond de-risking the company by the government for the expected turnaround, the government is sincerely committed to ensuring that it takes off in the hands of private investors, employs Abia youths, returns to profitability and impact the Abia economy positively.
*Ferdinand Ekeoma is a special adviser on media and publicity to Governor Alex Otti of Abia State.
