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OPINION

Premium Steel Acquisition Of DSC: Another Step In A Wrong Direction By Justice Iyasere

Premium Steel Acquisition Of
DSC: Another Step In A
Wrong Direction

By

Justice Iyasere

Nigeria

When
the then Delta Steel Company, an integrated
steel complex located in Ovwian-Aladja,
Delta State was established and
commissioned in 1982, it was designed to
capture the collective hopes of Nigerians for
proper industrial take-off of the country.


It was a major federal presence in this part
of Nigeria, offering direct employment to
over 5,000 staff, many of whom were mopped
up from the best establishments in the
country and on the global scene.

The steel
plant, with an installed capacity to produce
one million tonnes of liquid steel per annum
using 80 per cent of local iron ore and 20 per
cent of metal scraps, lived up to its billing at
the initial stage triggering a major economic
awakening in the neigbourhood as DSC
became so attractive that major companies
like SPDC, Chevron, etc lost critical staff to
the enchanting lure of the prospects of DSC
at the time.


At the pick of its glory, it was a delight
and a thing of pride to be a staff of DSC.
Moving into the sprawling integrated steel
plant covering 172 hectares of land,
visitors get welcomed into the complex by
the noise of moving machines,
accompanied by billows of smoke and
blazing fire emanating from the steel
melting section of the facility where steel
workers frantically worked on the Electric
Arc Furnace and the Continuous Caster to
melt scraps and other raw materials into
liquid steel. The liquid steel is later cast
into billets, an intermediate or semi-
finished product, which serves as the
main input for the rolling mills section
where various shapes and sizes of
finished or rolled products are produced
and stacked in the warehouse to be sold
to customers in various local and
international markets. What government
dreamed of was not only a DSC that
would be the pivot of the Nigerian
economy; not only one that was
thoroughly captivating and tantalizing,
but one that suggested that “all that
glitters is gold”. Everything was properly
planned and executed; the standard of the
structure, the products and even the
management of the waste there from was
acclaimed not only theoretically but
empirically international.


But after about 15 years of imparting the
economy of the nation very positively,
production activities in the steel plant
came to an unfortunate and abrupt halt as
the plant was forced to shut down in 1996
due of course to prevailing political
intrigues of the time. It stayed without
activities until February 8, 2005 when the
federal government, under its
privatisation programme, sold 80 per cent
shares of DSC to Global Steel Holdings
Limited, an investor which could not
profitably manage the company rather,
went on a cabalization spree to further
worsen the state of the company. Assets

stripping and accumulation of huge debts
were the major legacies of the former
investors.


With the unfortunate twist in the fate of
the company, thousands of able-bodied
and well trained Nigerians were flushed
into the unemployment market while
their entitlements remain unpaid.
Predictably, fortunes of thousands of
parents, children, relations and other
dependants were traumatized and
suddenly negatively impacted. Some
erstwhile virile DSC men and women have
died of high blood pressures and other
ailments. Some have gone to their villages
where they are being treated of
downright madness arising from the rude
shock. Large numbers have gone
underground as a result of the
humiliating and dehumanizing conditions
in which they suddenly found themselves.


As the reality of the collapse of DSC bite
harder on the local economy, some
women who would easily have passed for
“beauty queens” in DSC towns roamed
the streets of neighbouring Warri towns,
looking like a soggy mass of protoplasm
loosely helmed to a crumbling bag of
bones, while young and dandy men grew
grey and gaunt overnight. During the hay
days of DSC, whenever the company paid
salaries, the local economy received an
instant boost as sales in the various
markets in the area peaked. DSC was the
mainstay of many small and medium scale
industries which offer one form of
services or the other to the company.


Food vendors, road transport workers,
business centers and different times of
economic engagements of the Udu people
and neighbouring communities got their
lifelines from DSC. One can therefore
imagine the impact of the unfortunate
twist in the fate of DSC on the local
economy.
It was in this state that Premium Steel and
Mines Limited stepped in having acquired
major equity holding as core investor in
DSC only last year in order to revive the
company and bring back its lost glory and
reign of profitability. There was
excitement amongst the people as they
hoped for better days ahead. However,
having in realizing that the new investors
are Indians like the former investors, the
Udu people of Delta state received
Premium Steel with cautious optimism.
Their suspicions were further heightened
when the company refused to disclose the
content of the Sales/Purchase Agreement
with the federal government that could
define the relationship between the
company and the host community in an
MOU with the Udu people. It took
Premium Steel and Mines Limited several
months to agree to meet with the Udu
monarch to brief the people of their
presence and the prospects of the new
deal for Delta state. When the company
led by the CEO, Mr Prasanta Mishra,
eventually met the Udu people, they
promised to turn around the company
and resume production shortly, but
details of the transactions that gave
Premium Steel keys into the plant were
shrouded in dodgy secrecy.

Expectedly, as
the new investors took over, various units
and equipment at the plant have been in
deplorable conditions due of course to
lack of use for many years. Critical sub-
systems like ball mills, cooling towers;
control systems and furnace have been
affected and are presently required a
turn-around for full blown production to
commence. The rot is also evident at the
raw materials handling system and jetty
as some of the major equipment including
two ship loaders, two billet loaders, two
slew cranes, stacker reclaimers, one pellet
stacker and 17 conveyor belts would be
requiring extensive rehabilitation or
thorough turn-around maintenance. The
plant was originally designed to produce
one million tonnes of liquid steel per
annum using 80 per cent of local iron ore
and 20 per cent of metal scraps. This is
why iron ore, which must be fetched
from NIOMCO, Itakpe to Aladja, remains
the most important raw material for
production of steel in commercial
quantity.
According to the CEO, the vision of
Premium Steel and Mines Limited (PSM)
goes beyond steel production. The new
investors promised to ensure the gas
plant designed for the company is
upgraded to generate power for use of
the plant and the local or host
communities besides going commercial to
supply power to distribution companies.


Another component of the investment
vision of PSM is production of fertilizer
for use of large scale farming enterprises.
The Oxygen plant, according to a top
management staff of the company was
designed for full scale production of
fertilizer. Already, all the non-functioning
units in the plant were earmarked for
maintenance ahead of production
schedule. PMS and her local and
international technical partners, they said
were already strategizing on how to tackle
the challenges met on the ground. The
host Udu community, though not
convinced of the genuineness of the
promises, demonstrated very appreciable
understanding with PMS urging for early
coming on stream for full scale
production and activities on all fronts in
the plant in the interest of the local
economy. The plant, from reliable source
could absorb over 10,000 direct and
indirect staff from the labour market
when the company starts production to
installed capacity.


At full production, Premium Steel, which
boasts of a direct reduction, DR, plant and
the pellet plant, Lime Plant, Rolling Mill,
Electric Arc Furnace, and Continuous
Caster as well as other auxiliary units of
the plant such as foundry, electrical and
mechanical maintenance workshops, air
separation plant, workshops, plant
harbour, and water supply system, fire
and safety, Heavy equipment workshop,
among others, would be able to produce
1.45 Million tonnes per annum from the
palletization plant while the Direct
Reduction plant has a projection of 1
Million tonnes per annum; the steel
smelting shop, 1 Million tonnes per
annum; Continuous casting machine, 0.96
million tonnes per annum; Rolling mill,
0.32 million tonnes per annum; Oxygen
plant, 80 tonnes per annum and Lime
plant, 66000 tonnes per annum. The
product portfolio of the company includes
Billets, TMT bar, Premium quality bar,
Wire rod, angle and channels among
others.
But in her over one year of taking over
the complex, Premium Steel and Mines, a
company that was registered in December
2014 without any visible experience in
steel production anywhere in the world,
has not taken steps to allay the fears of
the Udu people suggesting that DSC has
been handed to another plunderer who
has come as undertaker to finish off
where Global Steel Holdings Limited left
the scene. The first sign that shows
Premium Steel to be insincere with their
acclaimed vision and commitment to
production was the attempts at selling off
lands acquired by government for specific
purposes related to DSC but were not
used for those purposes over the years.

They were resisted by the Udu people
before they finally ran to BPE which
issued a warning to the land owners to
stay away from DSC property. From very
close observation, it is obvious the
Indians came with empty portfolios and
are sourcing for fund from the local
economy to keep them afloat. They are
likely going for the jugular like GSHL,
trying to sell off DSC lands and worst still,
the DSC Technical High School and the
Primary Schools to be able to sustain their
stay in the country perhaps for a period.


They need to be around to shop for
investors most probably from the
Nigerian investment market to move
forward. The host Udu community has
gotten winds of the planned sale of THS,
one of the best Secondary School in
Nigeria with a global reputation for
excellence. Instead of importing foreign
exchange to be invested in the plant,
Premium Steel seem determined to sell
whatever could be laid off for quick
money and perhaps zoom off like GSHL
did about 5 years ago.
While the host communities are anxiously
waiting and praying for speedy
commencement of production so as to
open the door of employment for
qualified members of the society, nothing
is happening inside the company to
suggest production would commence
soon. Nigerians hope for a fresh breath of
life into the old Delta Steel Company, now
PSM but the expectation of the people
and the window for strengthening dried
bones and frustrated erstwhile staff of the
company are already turning into a
mirage. The DSC Hospital which was one
of the best in the area having been
privatized by GSHL has not been able to
live up to expectations since then. The
Schools are the only assets of DSC which
are thriving and have not been affected
by the rots in the system. The Schools’
management is being frustrated daily by
Premium Steel through a miserly
approach to release of self-generated
fund for critical business of the school.


The schools are gold mines which
Premium Steel and Mines Limited have
discovered yet it is being frustrated with
teachers being owned much entitlement
whereas there is so much money in the
schools accounts.
In the opinion of this writer, something
worst than crime is being perpetuated
against the fortunes of DSC by the new
investors. Premium Steel is perhaps not
the answer to the cry for the
revitalization of the company. They are
up to no good and the entire Urhobo
nation and Delta state must rise up to
challenge Premium Steel to either do the
right thing or go elsewhere otherwise we
shall wake up one day to see DSC reduced
to something less than scraps. With
Premium Steel, certainly it is not yet
Uhuru for DSC. The Federal Government
should critically review her romance with
Premium Steel and put a halt to their
nefarious activities at DSC before it is too
late. A stitch in time saves nine.

 

Author’s brief bio:

[Profile] Irikefe Justice Michael Iyasere

ABOUT THE AUTHOR

GOODNEWS ANDREW ERUEMUARE also known as SIR A-ONE is a website reviewer, blogger, pengician/writer.
He earned a Bachelor of Arts in languages and linguistics from Delta State University (DELSU), Abraka. He is the
CEO of :
www.pengician.com
www.widestforum.com
& Pengician Multimedia Concepts registered with the Corporate Affairs Commission (C.A.C).

Surfing the internet & reading are his hobbies.
He can be reached via +2348063562857 & +2347051756171