ByÂ Franklin Alli
Dana Steel Limited, the core investor in the Katsina Steel Rolling Company, has cut down the volume of its billetsâ€™ import by 81 per cent.Â Billets are one of the raw materials used in the production of steel.
Jacky Hathiramani, Managing Director of the company, said they have just commissioned their new billet manufacturing plants valued at N5.4 billion.
â€œWith the Steel Melt Shop now operational, Dana Steel will now cast its own billets from metal scraps. This would lessen the Millâ€™s dependence on purchased billets by up to 81 per cent, and improve overall efficiency and gross profit margins. The rolling mill has installed capacity of 207,000 metric tons,â€ he said.
According to him, the steel melts shops is a major step in the companyâ€™s backward integration strategy and is sure to boost the operations of the Steel Mill significantly.
Hathiramani noted that, prior to the commissioning of the Plant, Dana Steel had to rely on billets imported mainly from Ukraine, and also from Brazil, China, and Russia.
â€œThe lengthy import cycle, the need to stock a substantial supply of billets to cushion against outages, the necessity of road transport, and the need to pre-pay for imports resulted in an extremely long working capital cycle, requiring large amounts of cash borrowing to feed working capital needs. This led to high interest expense and depressed margins,â€ he said.
He further stated that since they took over the moribund rolling steel mill in December 2006, the group has invested heavily in the refurbishment of the plant.
â€œToday, the entire induction furnace and mill have been completely renovated and updated with the latest technology. Three sizes of bars are currently produced; 12mm (50 per cent of sales), 10mm (25 per cent of sales) and 16 mm (25 per cent of sales),â€ he said.
The activities of Dana Steel have also generated employment for many. The management of the company inherited 56 full time staff and 30 contract staffs when it took over the company, and as at October 2009, the number had increased to 207 full time staff and 63 contract staffs. With the commissioning of the new billet plant, more staff will be employed.
As a responsible corporate citizen, Dana Steel has made significant contributions to the socioeconomic development of its host community.