By Justice Iyasere
LAGOS AUGUST 28TH (URHOBOTODAY)-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.
Mr Justice Iyasere is ajournalist based Warri, Delta State