AUSTIN OMOS OYIBODE, EDITOR
Following series of assets stripping allegations against management of Premium Steel and Mines, operators of Delta Steel Company (DSC), management team of the steel firm has opened up, denying all allegations, saying rather than allegations of asset stripping, the new owners have invested millions of dollars in a stage by stage revamping process and that assets no longer useful for the firm’s operation are sold out for replacement.
Over the past few weeks, there have been media bombardments against the company but on Thursday August 16, 2019, the entire management team including the Chief Executive Officer, Mishra Prasantra and the general managers of all departments gathered to clear the issues, insisting that the firm was on a right footing, noting that the allegations are borne from uninformed minds and that the Indian firm was poised to employ all machineries to transform the firm for optimum steel production.
In a step by step analysis, deputy general manager of corporate affairs, Emmanuel Etaghene, explained the success stories so far recorded by the firm from November 2015 to the present day, adding that everything is being put in place and that the transformation was being made in phases, just as he described as laughable the claim that the owners were working to run away.
Etaghene told journalists that when Premium Steel came into DSC, most of the machines were obsolete and that it took the Indian owners long time to wake up the plant, adding that millions of dollars have been invested, saying: “We are here for business, we are here to resuscitate the company, we are taking the resuscitation process stage by stage.”
According to Etaghene, the steel firm which was established in 1982 needed a lot of revamping to make it remain competitive, insisting that at the point of acquisition of the plant, the entire system was in a moribund state.
He said: “We acquired a steel plant that has remained dormant for over 20 years, the plant was like a forest, the source of power to the plant was vandalized, machines were obsolete and those not obsolete were malfunctioning because they have been left too long in idle state. It took us a lot innovative efforts to wake up the plant.
“We had to spend so much money through TCN and BEDC to restore power. Also, the debtors of the former owners asked us to pay before we took over. We have invested millions of dollars in the plant. We have installed new machines worth millions of dollars. All the ancillary plants, quality control plants, laboratories, instrumentation and control systems, water plants are all in working conditions.
“To get all these in place, it required a lot of human efforts and money. We have also procured seven trucks and each truck costs N29million with a total cost of N203million. These actions do not reflect the names we are being called in the public domain today. As we speak, the rolling mill is functioning, the steel melting shop, the direct production plant, the pellet plant are all working. What we are doing is like a backward integration.
“By September this year, work will start in the steel melting shop. A firm is coming from Italy to install new continuous casting machines and this will increase our activities in the plant. When the steel melting shop is ready, we shall start producing our own billets.
“For now, we are importing billets to sustain the rolling mill. And each ship load of billets costs us 9million dollars, if you multiply that by the current exchange rate of N360 per dollar, of course you will be talking in terms of billions. As at date, we have gotten three ship loads of billets.
These actions do not reflect people who will soon run away. We can’t be running away when we are bringing billets worth over three billion naira. We can’t be running away when we are bringing people to resuscitate the firm. We can’t be running away when we have on our payroll over 500 staff with a monthly wage bill of over N40million.”
Giving details of the investment made in the non-core area, General manager of Non-core area,——said when Premium Steel took over the steel firm, the estates were disconnected from power supply noting that the 500 families that are resident in the non-core area were living in darkness.
He said: “For five years we have been without power supply. We made efforts to settle all the bills. We had negotiation with BEDC, we worked out an arrangement and defrayed all the bills. And as I speak with you for the past two months, power has been restored to the estates. Tenants are in the estate and some of our staff are also there.
“Coming to the schools, since the advent of the schools from 1983 till now, this is the first time serious renovation was made in the school. There is complete landscaping of the technical high school which is one of the best three schools in Nigeria in terms of academics. The whole place is being interlocked.
“We have 11 blocks of hostels for boarders. For the first time in 30 years the roof has been replaced with long span aluminum all for the comfort of the students. Those who have students there, by the time schools resumes in September, it will be different place they will see.”
Also, General Manager of Mechanical Maintenance, Engr. Samuel Tanno, said the steel firm has concluded its International Standard Organisation (ISO) certification, noting that “Premium Steel is doing all these to have access to international bodies to help us push out our products.
“We discovered that the local market is getting very terrible and competitive. And if you are aware, about nine firms have closed up in Lagos. The steel industry globally is undergoing terrible times. We have taken a vow on our part and we are not looking back. What is happening in the global steel market is enough for one to pack out of the market.”
On asset stripping allegations, Engr. Tanno said: “Yes, a lot has been said about asset stripping. Well if I own a property, and I am doing systematic replacement of those properties, I do not see why somebody should tell me am stripping assets. If something is no longer useful, I don’t know whether one can call it an asset. An asset is something valuable which I must keep either for future or immediate use.
“If it is no longer useful I wouldn’t call it an asset. We have some old trucks, somebody is telling me I should refurbish them, I said no I don’t want to refurbish them but I want to buy new ones. What is wrong in buying new ones and selling out the old ones? We removed all of them and replaced them.
“We’ve bought new generators put in all the schools and removed the old ones. So, we are very mindful of these things. Nothing that is useful in the present day Premium Steel that will be tampered with. Anything sold out is not an asset, is not useful to the company. But they term it asset stripping just to give it a bad name.
“Those generators were installed when electricity was not in the steel towns. They were running. Due to high cost and introduction of electricity, they were packed up. When Global Infrastructure came in June 2005 till when they left in 2012, those generators never worked one day.”
However, journalists who were present at the media interaction called on management of the steel firm to organize a media tour of the facilities mentioned so as to have on the sight view of assets and the transformations which Premium Steel claimed to have made.