*Seeks FG, Host Communities’ Support To Improve Production

By Eseoghene Emuke

Premium Steel and Mines Limited (PSML), the new owners of the erstwhile Delta Steel Company (DSC) Ovwian/Aladja in Udu Local Government Area of Delta State, has debunked reports that the management of the company was selling off key plants and other important properties of the steel company.

PSML claimed that they have been doing their best since 2016 when it took ownership of DSC to revamp the plant as one of the best hub of steel companies in Africa, stressing that the company had made huge financial commitment into achieving this purpose.

Speaking at media luncheon organized for selected journalists in Orhowhorun in Udu Council Area of the state on Thursday, Deputy General Manager, Corporate Affairs of PSML, Mr. Emmanuel Etaghene, said the allegations by section of the media on asset stripping were baseless and should be disregarded.

Etaghene, who spoke at the luncheon attended by top management of PSML including the General Manager and Chief Executive Officer (CEO), Mr Prasanta Mishra and General Manager, Mechanical, Engr Samuel Tanno, urged the people of the host communities and other relevant stakeholders not to fall prey to those who do not want the plant to come back to full capacity.

He stated that rather than the falsehood being spread about the company, PSML has been replacing obsolete plants and rolling mill machines with modern day technology that will ensure that the plant meet the expectations of government and the people of the area.

PSML was reacting to allegation that it was engaging in asset stripping of some key machines and generating plants in its alleged bid to keep the place perpetually moribund.

The company stated that a total of 500 staff comprising skilled and unskilled labours had been directly employed to meet the purpose for which it was investing tens of billions of naira into one of the biggest steel plants in the African continent.

Although it agreed that it had sold off some generating plants and trucks, Etaghene explained that those they were selling had remained moribund for over 20 years and were not useful to the running and resuscitation of the plant.

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According to him, “Well, if I owned a property, and he is doing systematic replacement of those properties and someone is accusing him of stripping asset is not right. Asset is a valuable item that is available for use. If something is no longer useful, I don’t know if we can call it asset. Asset is a valuable property that must be kept either for immediate use or for future use.

“If something is no longer useful, you can’t call it an asset. You can’t call what is no longer useful as being stripped. For instance, we have some old trucks and somebody is telling me to refurbish them but I am saying I don’t want to refurbish them since I have bought new ones.

“We have changed the rolling mill plants. What do you want me to do with the old ones? Selling of the old ones is what they are saying is asset stripping. We bought new generators to replace the old ones. Check the pictures if the generators were old one or is asset stripping. The generators were vandalized and cut to pieces.    

“I want to assure you that nothing that is useful in the present day Premium Steel (formerly DSC) that will be tampered with when we know is an asset of the company. Anything that was given out is not an asset and not useful to the company. But they are terming it asset stripping just to give it a bad name.

“Those generators never worked all through the days of Global Steel. The last time those generators were used was during the time of Late Senator Brume. If those generators were working, why did Global Steel during their days hired generators to run the plants? We have provided new generators for the hospital, primary and technical school. The generators we sold had not worked for more than 20 years.”

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Etaghene explained that serious renovation works were ongoing both at the production plant and complex, saying that the company had also purchase trucks, buses and generating plants for the PSML (DSC) Hospital, primary and the technical schools.

Also similarly speaking, the General Manager, Mechanical, Engr Tanno told journalists that PSML had received three ship consignments of pellets to ensure that the plant remains and functional, adding that the ongoing resuscitation of the old DSC was being done in phases.

He lamented that the recent five per cent increment on imported steel raw materials as well as high electricity tariff  among others were killing the growth of the steel industry and urged the federal government to urgently intervene to save the industry from total collapse.

Engr. Tanno, while appealing to the federal government to grant steel companies in the country enabling environment to thrive, called on host communities to support PSML in its vowed determination to ensure that to ensure that the steel plant was fully back to life.

Speaking on the level of production currently at the plant, Tanno added, “As we have said, we are doing backward integration. The rolling mills even if they produced one million tons, only a third of it will roll in our rolling mills. That was the original plans of government.

“But for whatever reason, we have not produced more than 20 per cent of stock capacity right from the days of DSC. Whatever we had produced runs within 20 per cent capacity.

“For now, we are importing pellets. We have three shipments already for this period and we are expecting the fourth shipment. For now, we are producing construction steels for railways, stadia, bridges and buildings.

“Our major customers at the moment are those into constructions such as railways and the rest. We lost two consignments recently…but we are working hard on it. If your product is not certified appropriately, you can’t move them out of the country.  

“Since we are importing for now, we are producing ten thousand tons per month. We are still at 1/3 store capacity. We’ll continue at this level but we know will increase when we have our own pellets. Our own pellets, anyone can pick it up anywhere.

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“What we are producing now, our local people can’t access it because it too expensive for them. The quality is too high. We our people need is just low carbon steel. The local market will not agree to buy at the rate we are selling because of the quality. That’s one of the constraints we are facing.”

He stated that many steel companies in the country were folding up owing to the huge tariff imposed on importation of raw materials for steel production in the country.

According to him, “What we are producing now, our local people can’t access it because it too expensive for them. The quality is too high. We our people need is just low carbon steel. The local market will not agree to buy at the rate we are selling because of the quality. That’s one of the constraints we are facing.

“Recently, there was five per cent increment on tariff for pellet importation. It is killing. It is just like someone strangulating us to death. You could image why many of them (Steel Companies) had to closed up. That five per cent is enough for us to keep our 500 staff. Government should look at this area and bring done the tariff and then make the business more accommodating so that more people can be employ.

“Electricity is another constraint killing the steel industry in this country. In fact, the tariff on electricity is very huge. Going through BEDC is like 100 per cent increase. What we are now looking at is the eligible customers supply to enable us gets directly from TCN. Once we get that the price will be half what we are paying now. What we are paying now is not sustainable and not economic to our business.

“Also, government should also give us (steel companies) some space. Ground rent is another one. If I tell you what we are going through on ground rent issue is terrible. What we are saying is that government should give us enabling environment so that the steel companies can thrive.

“Federal Government should give us waver for some time. At least, you are having a company of this nature; it should be nurtured to a period of five or six years with enabling environment to thrive and thereafter. There are a lot of issues hampering the growth of steel industry in this country.”


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