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Delta Steel Company: Dashed hope of a nation

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Delta Steel Company: Dashed hope of a nation

Sick workers, comatose firm, helpless stakeholders

Two years after the Federal Government handed over the Delta Steel Company (DSC) to Premium Steel and Mines Company Limited – a consortium of private investors – to revive the company and start production of steel for local and export purposes, the multibillion-naira outfit is yet to take off. YEKEEN AKINWALE, who visited the company situated at Owvian, Aladja town, Delta State, finds out that the company is still grappling with crises which look intractable

 

“Warri no dey carry last, na wetin we dey always talk, but for this Delta Steel Company matter, we don carry last,” quips Justice Iyasere, who looks towards the massive structure of the steel company with disappointment clearly etched on his face.

Although Iyasere, a community leader and local government chairman aspirant in Udu Local Government, is not one to give in to pessimism, he admits that it will take more actions than precepts to get the company running again – especially in the face of unending crises ranging from war by ex-workers, to huge debts to suppliers and threats from other interest groups.

Years of politicking, mismanagement and lack of interest by the Federal Government, he says, led to the collapse of what was once the pride of Delta State. If it were alive and running, Nigeria’s reliance on imported steel and aluminium products ought to have significantly reduced.

Its sales to Premium Steel and Mines Limited under the Federal Government’s privatisation programme, besides being opaque, is already a subject of litigation – communities hosting the company in Udu have instituted a law suit against Federal Government and Premium Steel and Mines Limited, to contest the sale.

At the moment, Nigeria spends N887 billion (about $4.5 billion) annually to import 25 million tons of steel and aluminium products. This is not going to end soon except steel plants such as DSC start producing steel locally.

In 1980, when the plant was established and inaugurated under the leadership of Fred Aghogho Brume, pioneer general manager, it was designed to produce one million tons of liquid steel per year. It never attained this maximum production output. Its best performance was in 1983, when it produced 500,000 tons. Since then, the plant has been aground.

“In 1985, the highest steel production a day was 23 heats in the whole of Africa and that year, Delta Steel was producing 21,” says Sam Agberhiere, one of its pioneer staff.

“If government is actually serious about steel making, by now we should have been one of the leading countries in the business. But the reverse is the case.”

From conception, DSC was designed to place Nigeria in the comity of manufacturing countries, particularly giving it an edge in the automobile sector. The Foundry Section, which earlier manufactured brake discs, drums and other parts for Peugeot Automobile Nigeria (PAN), Kaduna, has long been shut down.

“PAN in Kaduna was making order in 2002, 2003 and 2004. From here we made brake drums, engine blocks and other accessories in good quality,” says a former staff of the company who did not want to be named because of a running battle with the new management over unpaid entitlements.

The Phase II of the plant, designed to manufacture flat sheets for production of car bodies such as bonnets, car doors, roofs and booths, never took off. The natives who donated the land to government for the company to build the Phase II have reclaimed it.

“In one word, I’d say what killed DSCL is politics. They played politics with the plant. That’s why we have found ourselves where we are today. Warri don carry last here,” Iyasere adds.

Robinson Akpodovhan, retired manager, Shipping and Logistics at the plant, would also not spare government of blame. He says government did not effectively monitor the company.

“You cannot rule out the hands of government from the failure of the company,” he says. “Ajaokuta is over 40 years now and still grappling with construction, and it is also owned by the government.”

Truly, a desolate edifice of the company sandwiched by bush says much about its years of misfortune. Before now, the company supplied billets to Jos Steel Rolling Mill, Katsina Rolling and Oshogbo Rolling Mill. All three rolling mills are also dead.

 

Haunted by ex-workers, heavy debts, unseen forces…the face of a deserted plant

With a gun-wielding soldier and other private security guards manning the gate, a visitor without prior appointment will not have his way in. “Gaining access to the plant is not an easy task; you have to come back in two weeks’ time,” a security guard tells this journalist.

An insider says the new management of the company is haunted by aggrieved former workers who have vowed never to allow operation in the plant except their entitlements are paid. So, the main gate is under tight security against any unforeseen invasion by former workers. But its former owners, Global Infrastructure Holding Limited, is also laying claim to the company and indeed pressing to take it over.

 

Save for a few employees working on an excavation across the main gate of the company, there is actually no movement of heavy duty trucks that could suggest any activity going on in the company. No deafening sounds of iron casting coming from the plant or the razzmatazz that characterises a steel company.
It wears an old look, all the welcome signposts along the dual carriageway erected by the new management notwithstanding. Keen visitors get the impression of a company not working right from the corridor of the same highway.
The road was constructed purposely to connect the steel plant to the Warri Port, in order to enhance easy evacuation of finished iron products. But the road is not only deserted; it is dilapidated.
A trailer park a few kilometres away from the main entrance of the company that once served as the assembly point for heavy-duty trucks taking finished products is long gone; it has been taken over by bushes; no ancillary business along the road is visible. Business life of the area apparently died with the steel plant.
“As an A-Level student of Federal Government Warri, we were taken to DSCL on excursion; the noise there was deafening – noise of steel production and presence of heavy-duty trucks waiting to evacuate iron products such as iron rods, billets and other products were sights to behold,” recounts Onwuka John, a resident of Owvian.
“In those days, oil workers were resigning. I saw them join the steel sector. Many resigned from Shell to join Delta Steel because everything about the company was too attractive for anyone not to eye its workforce; housing estate, schools, football team and even hospital were owned by the company.
“No company impacted the lives of the Deltans like the steel company, but all that is history now,” he adds.
“It was operating three shifts and you need to see staff buses conveying workers from Steel Town for their shifts to the company. But now, the plant is just like a ghost town.”
The units within – harbour, Direct Reduction (DR) plant and the pellet plant, Lime Plant, Rolling Mill, Electric Air Furnace, and the Continuous Caster – are littered with wreckage and waste, while other auxiliary units of the plant such as the foundry, electrical and mechanical maintenance workshops and water supply system, have all been overtaken by elephant grasses.
Creating an impression of work in progress, however, are a few workers here and there strapping their safety helmets and putting on some dusty factory boots. But there is arguably no steel processing going on in the company.
Waiting for the promised facelift by the new owners, Premium Steel and Mines Limited, the brownish rusty bodies of the equipment and the broken-down or abandoned machines all over the place are relics of a dead giant.
In March 2017, a group of investors from the United States of America and Morocco were reported to have visited the plant, proposing a N600 billion investment to help revamp it – an indication that the new owners too might be in need of financial muscle to run the plant, like their predecessor, Global Infrastructure, which failed to turn it around.
But Victor German, general manager, Government and Community Affairs at the company, denies any such proposal from any investor. He says the Indian investors have both financial and technical abilities to operate the company.
This claim is already being contested. Ebhaleme Pius, a former employee of the company who worked there when it was sold to Global Infrastructure Holding Limited, says the management of Premium Steel and Mines, under the leadership of Prasanta Mishra, lacks not only the technical knowhow and financial muscle to run it successfully but also has no record of steel making.
“Those are not steel makers,” says Pius. “That’s why they are yet to manufacture a pin for the past two years. They cannot manufacture anything there because they don’t have experience in steel making.”
When its new owners took over in 2015, they promised to revive the comatose steel plant with N370 billion. Back then, with an established elaborate plan for the company’s revival with N70 billion in new investments in the first phase and N300 billion in the further phases, it looked like the company was going to have a new lease of life.
German admits that Delta Steel Company, as it is still called by the locals despite change of ownership and nomenclature, is still haunted by many known fears from disenchanted former workers who have vowed never to allow new investors take over the company until the N3.2 billion due to them is paid.
The workers are insisting that all industrial issues be settled, especially backlog of salaries and allowances, before the company can operate. German also confirms that the plant has been bogged down by demands of the former workers. “We met some rigid situations,” he says.
The basic reason the company has not resumed operations, according to him, is the delay in bringing the former workers on board.
“These former workers are waiting, but these issues of liabilities are also there. We have about 100 of them working with us now,” he says.“What we have been doing is trying to meet the demands of the former workers; those who worked with Global Infrastructure. You don’t just come and start work. They are asking for the payment of debts owed the workers.”
According to German, who is also a gas engineer, the management of the company is almost done with the resuscitation of its rolling mill, after which other sectors such as Steel Melting Shop (SMS) would be revamped. But there are arguably no signs that the mill will start work anytime soon.
“We are resuscitating the rolling mill, we are going to buy billets or get them from outside the country,” he adds.
Pius says the steel plant management will not succeed by revamping the rolling mill first because “Delta Steel Company is an integrated plant”.
“You can’t revive the rolling mill that ought to come last in the line of production first. It must be the last stage after they might have revived units like SMS and others. They can’t operate that plant; it is not a rolling mill.”
He alleges that the Indian investors have different plans for the plant. “They want to convert the building to a rice depot or a hotel,” he says. “You know they are Vaswani Brothers and we know their history in this country. They converted Volkswagen to rice depot.”
The payment of some debts by the Asset Management Corporation of Nigeria (AMCON) in April what was needed for the management of Premium Steel to gain access to the plant and commence its resuscitation.
“We started that April this year and we have gone far. We are almost through with the rolling mill. One hundred and sixty workers are going to be employed for the rolling mills when it is operational,” says despite all these commitments, the management of the company still has a lot of bridges to cross. A case before a Federal High Court, Warri Judicial Division, by Udu community, might be a major huddle to cross.
The host community says the details of the transaction between PSML and Bureau of Public Enterprise (BPE), which gave the company to the new investors, was not made open.
“We do not know the extent of purchase; we do not know what AMCON sold and what they didn’t,” says Sam Odibo (Otota), Prime Minister of Udu Kingdom.
The communities claim they are stakeholders, having been allotted 22 million ordinary shares in the company, representing 10 per cent of its total shares at its privatisation.
Part of their complaint, according to Odibe, is that the Federal Government has continued to shut them out in the privatisation process while dealing with the assets of Delta Steel.
“When BPE concessioned the company some years back, the community did not even know that they had some percentage to be paid because the Indian company, Global, ran the place solo,” he says.
“We say no; we want to know what they sold to you because AMCON sold what was used to borrow money from the bank. Did they reserve anything for the community or is it that they sold everything in spite of huge expanse of land the Federal Government took from us in the name of national interest. But we believe that the Federal Government would not be stupid to sell everything off.”
Before heading for court, the host communities said their efforts to get both the BPE and the AGF to account for the privatisation process were shrugged off. Now, they want the court to declare that they are entitled to 22,000,000 ordinary shares, representing 10 per cent of the total shares of Delta Steel Company, and that both the BPE and the AGF have no right, power or authority whatsoever to sell or transfer to Premium Steel either directly or through any of the agents of the Federal Government, more than 80 per cent of the shares of Delta Steel.
The court, they argue, should also declare any purported sale and/or transfer of more than 80 per cent of the shares of Delta Steel to Premium Steel by the Federal Government, null and void.
“AMCON is done on the matter; they are not talking to us, same way nobody talked to us in the previous deal that allowed those Indians to run the place aground,” says Odibe.

•Akinwale is a snr investigative reporter, ICIR, Abuja

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