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We’re replacing obsolete equipment, not assets stripping—Premium Steel

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Steel
Mr. Emmanuel Etaghene, General Manager, Public Affairs, Premium Steel and Mines Limited

Mr. Emmanuel Etaghene is the General Manager, Public Affairs, Premium Steel and Mines Limited, PSML, formerly called Delta Steel Company, DSC, Ovwian-Aladja, Delta State. He answered questions about the firm, especially in the face of the latest criticism of the firm’s activities and intentions.

There are insinuations that PSML has not been able to revive the plant

The process of resuscitating the plant is still on. But we have started production since 2018. In March 2018, Governor Ifeanyi Okowa and officials of the Federal Government came to commission the rolling mill. Since then, the plant has continually been producing quality steel products, which had been delights of reputable companies like Dangote, Julius Berger, CCECC and many others.

Every day, finished products are being evacuated from the company’s yard for supply to our clients. The process of reviving the other sectors is on. The various segments of the plant are already receiving attention to give the plant a new life. By late 2021 and early 2022, 1 EAF (Electric Arc Furnace), one caster, one Direct Reduction Module and one pellet plant would have been fully resuscitated and put into use. Where we are taking the plant to will create over 5,000 direct and multiplier indirect employments for our teeming unemployed youths.

When the plant is fully revamped for the full turn around and production to installed capacity, importation of long steel products into Nigeria will come down to less than 50% of the current importation profile so as to save foreign exchange to boost the Nigerian economy.

There have been complaints about outstanding workers’ entitlements from the old DSC

Premium Steel and Mines Limited does not owe any old staff a dime. What we bought from AMCON is assets of the old DSC. That was why when we came in 2015 we mounted pressure on the Federal Government to fulfill its part of the bargain by clearing the entitlements of the old workers by paying them off so they could let us have our peace.

Many people had the erroneous impression that we were owners of the DSC liabilities. That is not true. We bought only the assets, but because we were on the ground here in the plant, the old staff held a demonstration at our gate and harassed our staff. We had to work with the government to ensure they are paid off. We succeeded and they were paid off in 2017. By 2018, the plant was commissioned and since then production has been going on well.

Over seven shipments of billets have been received from abroad so as to sustain production. Before we took over the plant, there was a handful of staff on the ground, less than 50. Today we have over 500 staff and by the time the SMS and other sectors come on-stream, we shall be talking of over 5,000 direct and many indirect staff with a multiplier effect on the local economy and bigger gains for all stakeholders.

What about the allegation that PSML was trying to convert the plant into a warehouse for the storage of rice?

This is another laughable one. Nobody in his right senses could ever conceive such irritating ideas in his mind. How can anybody convert such a huge asset as this company to a warehouse for rice business? What profit can you make from rice that could outweigh the steel business? We are here for serious business and soon the world shall see the new glory of the modern steel plant we are building here.

There is another argument that the Udu community, your host, ought to have about 20 percent ownership of the company

We have been confronted with that argument several times, but our stand remains that what we bought from AMCON was 100 percent of assets of the old DSC. Besides, under the former investors, GSHL, the 10 percent holding supposed to be allocated to the host community could not be subscribed to by the host. All that became toxic assets, hence AMCON gave PSML 100 percent ownership of the company. We have no reason whatsoever to deny our host their entitlements if that was captured in the purchase agreement.

The trouble DSC went through and the failure of the former investors to fully revamp the plant before they left forced AMCON to give us 100 percent holding, so we could address all issues towards total turn-around of the plant. The Economic and Financial Crimes Commission, EFCC, has given us a clean bill of health after a thorough evaluation of all the complaints from some interest groups. We did not bother to gain media currency from that because our focus is to revamp the plant, succeed where others failed and contribute our quota to the Nigerian economy, and not to make a noise of our fidelity and integrity in handling the company affairs.

Why then did your workers demonstrate against the company sometime last year?

The allegation of a demonstration by workers over salary payments is not true. That is mere imagination by promoters of hatred against the company. We are up to date in our obligations to staff. Employee welfare is our priority and we are not owing any staff a dime. We have paid February salaries and everybody is happy here. We believe in steel. Steel is our business and employee is our motto.

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There are allegations of assets stripping by some stakeholders…

That is the major distraction from our corporate competitors. Many people who want to fight their way back, having lost out earlier, are doing everything possible to discredit our efforts and hire enemies against us. But we are focused. We have refused to be distracted. As we speak, PSML has added value to the assets while in the process of resuscitation. We are working hard to revamp the plant with modern and state-of-the-art technology by laying-off old and obsolete machines and machinery which are not compatible with modern cutting edge equipment for better and improved steel production in Nigeria.

As soon as you lay off the old and obsolete equipment which can no longer fit into modern production processes, they will run into town with allegations of assets stripping. How can we steal our own assets? The rolling mill, which began production since 2018, is wearing a new look as everything in the unit was a product of modern technology because all the old machines and equipment in the sector had been replaced with modern ones. We are taking time to rehabilitate the Steel Melting Unit, SMS, because of the need to install modern and better technology to drive the section, as most of the existing machines and equipment cannot fit into the demand for steel production in the modern sense.

Recall that the plant was without activity for about 10 years before we took over. Do you still expect the equipment to be in perfect working condition after years of inactivity? Rot set in, and much equipment broke down and we are replacing them. So anybody crying of assets stripping is only being mischievous.  Premium Steel has successfully installed modern equipment and machinery in the rolling mill with ancillary sub-plants like the cooling towers, new compressors, etc. Premium Steel added brand new automation from ABB in the rolling mill which is a new innovation in the industrial world for the integrity of the operations of all steel plants and linked through the server rooms.

It has just commissioned a world-class new mechanical test lab with modern testing equipment for QA/QC of finished products. Not only the rolling mill and its auxiliary units, but also a balance of plant such as 330KV/33KV power substation, central mechanical and electrical workshops, instrument laboratory, heavy and light vehicle workshops, among others, have been revamped successfully and fully functional as of today. Most of those machines and equipment installed in 1980 cannot meet up with modern production demands in the face of highly sensitive modern technology. Laying off of those obsolete equipment and replacing them with advanced ones is what Premium Steel is doing. Cutting edge digital technology had overtaken the old almost analogue technology of the 80s and in the spirit of the jet age, modern and more efficient digital technology are being deployed to drive the production processes towards achieving better results. There is nothing like assets stripping going on in the plant.

Udu community is contesting the sale of DSC to PSML at the Federal High Court, while a group called the Emerging Delta is clamouring for a reverse of the sales. What is your take on these?

The case is on the argument that the sale of DSC to PSML was not made open. We have nothing with BPE on this matter. We stand by the fact that AMCON acquired DSC assets from the bank and sold to us. Let me explain how the banks came in. The former investors, Global Steel Holding Limited, used assets of DSC to borrow money from the banks. Even before the coming of Global Steel, the old DSC also borrowed money from the banks. They all used DSC assets as collateral. They could not repay the loans and the company ran into troubled waters.

The assets of DSC, therefore, became toxic assets that were bought by AMCON before the sales. We took over only assets. This is what many people don’t understand. AMCON that bought over those toxic assets is not Father Christmas that would invest so heavily in buying off the toxic assets without selling to recoup their investment. We have an authentic and valid deed of sales from AMCON. Those clamouring for a reversal of the sales of DSC assets to PSML are either ignorant of the sales transaction or simply being mischievous.

We are glad another group, the Urhobo Research, and Solidarity Movement had provided answers to the queries raised by the faceless group called Emerging Delta. We know those behind the group and what they are up to. We cannot return to the dubious way of the past which landed the company in the doldrums of failure. The Federal Government, which originally owned the plant and sold to PSML through AMCON, is not complaining yet some ignorant individuals out of petty hatred and selfishness will not let peace reign. But we shall not surrender to the antics of these people. We are taking the company to greater heights.

But the House of Representatives has directed a committee to investigate PSML

We heard of the intention of the House of Representatives to come and find out one or two things about how the company is fairing. That is normal. We are waiting for them. We have nothing to hide. Their coming will even avail us of the opportunity to properly promote our successes and register our complaint for better results.

 Any specific message for your host community?

Let me use this opportunity to commend the host Udu community for their support and cooperation so far. We may have differences here and there, but we are together in the quest to revamp the company. We use this medium to appeal to the Federal Government to consider a review of the tariff on the importation of raw materials for steel production. The Federal Government should grant waivers as a form of incentive for the growth of the steel sector, focus on infrastructure growth and have a national steel policy open to the public domain. Government should strive for a sustainable increase in per capita steel consumption of Nigeria, which is far below the developed economies. What we are saying, in a nutshell, is that the government should give us an enabling environment so that the steel companies can thrive.

Vanguard

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