4 November 2009
Abuja — Dana Steel Limited, the core investor in Katsina Steel Rolling Company, has concluded plans for the commissioning of its new 180,000 metric tons billets manufacturing plant.
The General Manager of the company, Mr. Madhave Mekala, said the new billets plant was part of its backward integration strategy as contained in its Privatization Post Acquisition Plan (PAP).
He said the raw materials for the $15 million billets plant will be sourced 100% locally unlike the other existing steel plants that import billets for their production, adding that about 15,000 tons of metal scraps will be consumed monthly in the plant.
Mekala said this to the Bureau of Public Enterprises (BPE) delegation who were on-the-spot assessment mission to the three in-land rolling mills privatized in 2006, spokesman of BPE Chigbo Anichbe, said.
He said it was to review the extent of compliance by the core investors with the Share Purchase Agreements (SPA) and the Post Acquisition Plans (PAP) in line with the provisions of the SPA.
The General Manager told the BPE team that in December 2006 after takeover, 25% renovation and refurbishment of the plant was achieved and the plant started and production commenced. In 2008, he added, 75% renovation and refurbishment was achieved. By 2009 the entire blast furnace and mill was completely renovated and updated with the latest technology.
He noted that Dana had inherited 56 full time staff and 30 contract staff on takeover in December 2006 but has increased that number as at October 2009 to 207 full time staff and 63 contract staff, adding that when the company's new billet plant with an installed capacity of 180,000 metric tons per annum is commissioned in November 2009, 72 more full time staff will be added to their staff strength.
The company however complained about the prohibitive cost of production occasioned by the drastic shortfall in power supply by PHCN and the cost of alternative source of power with a litre of Low Pour fuel Oil/Low Residue Fuel Oil going for over N105 per litre.
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