Delta Steel Company may soon bounce back to action following plan by its new investors, Premium Steel & Mines, to inject about N370 billion into the ailing company.
A statement from the company says Premium Steel & Mines has established an elaborate plan for the company’s revival and is set to resuscitate the plant with new investments of N70 billion in the first phase and N300 billion in the further phases.
The investor’s plan, according to the statement, includes a substantial socio-economic value chain in the Delta region, through revival of the current plant to one million tones capacity and, thereafter, expansion in capacities and establishment of industries for other value added products. “The product range at the complex is aimed at optimal utilization of the country’s mining and gas resources and produce import substitution products, while providing gainful employment to the community,”, the statement adds.
A critical area of Premium Steel’s plans is also to foster the welfare of the communities with assistance in the areas of education and healthcare.
Premium Steel has taken over only the assets with a commitment for the restoration of the operations, but the liabilities still remain the responsibility of AMCON and the plant’s Receivers.
Recall that earlier this year, the Ministry of Mines and Steel Development announced that the Federal Government, through the Assets Management Company of Nigeria (AMCON), has perfected necessary arrangements to sell the steel company after due process.
In February, the former Minister of Mines and Steel Development appeared before the Senate Committee on Power, Mines and Steel, and explained that AMCON had given the initial company the opportunity to pay back the loan, but the company was unable to do so and the grace period had long lapsed.
The Minister said: “There were no previous claims, Delta Steel was a privately owned company. The company took loans from local banks, and by Nigerian law, AMCON was put in place to make sure that banks do not fail.
“So, AMCON bought over the loans of that company, they gave them a payment schedule which they failed. So AMCON has no issue with anybody.”
The challenges to the new investors are, however, enormous and need perseverance, patience and financial strength for resolution. The Delta Steel plant is in very bad state of decay with overgrown weeds, burnt down facilities and vandalized equipment and other damaged infrastructure. Significant work and investments are required to restore the completely burnt down substation, blown off roofing, cannibalized furnaces, rusted scrap management machines, damaged cables and DRI plant.
The past employees and the communities have suffered immensely for lack of gainful employment and non-settlement of their rightful dues.
Their obligations need to be resolved by AMCON after due verification.
Needless to add, the successful resuscitation of Delta Steel would act as a great catalyst for the restoration of peace and prosperity in the region, while making productive use of gas resources and iron ore reserves available in abundance. When fully operational, the plant is expected to employ in excess of 1,500 employees, expanding to 5,000 over the next phases of expansion and diversification. Several suppliers and ancillary industries in the region are also expected to flourish upon the restoration of operations.
Premium Steel is a large-scale industry operator with international trading operations in several countries, mining operations and steel plants in Turkey. The group has stated plans to invest in mining and large scale industrial projects in Nigeria and sub Saharan Africa in the next 5 years.
The workers and the community in the proximity of DSC can hope to benefit from any early efforts by the new investors to bring confidence and commence operations at the plant. The success of the plant will mark Nigeria’s quest for becoming Africa’s leader in steel production, and encourage more foreign investments into the country’s local industries.
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