Premium Steels: Don’t Dash the Hope Again



By Eddy Odivwri;   08053069356

Growing up in Warri in the early 80’s, the feeling, direct or indirect, of being associated with the Delta Steel Company, Ovwian Aladja, was highly euphoric. Yes, the oil companies— NNPC, Shell and then Gulf (now Chevron) were there, but they never attracted the huge status symbol which the DSC identity conferred.  It was such a big deal wearing those DSC-branded overall. Even those working in the Catering Department or Clerks or even Messengers wore a certain kind of swag that  bolstered their self-esteem defined their social level.

The DSC staff were the city’s Big Boys.  What is more, the big luxurious staff buses were unique and exciting.  In great gaits, all the staff got into the air-conditioned Blue-coloured buses at appointed times, to the envy of all who watched them. That was DSC!

The allure and dazzle was even more arresting for those who lived within the well-paved and planned DSC complex. It was a mini-city of its own: complete with everything modern and functional. From the well-built schools, decent accommodation in various grades, neat streets, manicured lawns, to the stadia, auditorium, theatre, big pitches, hospitals, and all kinds of recreational facilities, living in DSC complex delivered something close to London experience at the time, what with unblinking electricity supply. It was simply the place to be!

The company had a near elastic capacity to keep hiring and hiring. The complex was indeed a large expanse of land. Technology controlled everything, almost including the air to breathe. The experience altogether was simply ecstatic.

The Warri economy was a witness. All it took was for the month to end. Market women felt the impact of the DSC-effect. The wives of DSC male staff and the female staff had a tradition of once-a-month shopping. And they will literally shut down the market to the pain of non-DSC shoppers.

Then gradually but steadily, the notorious Nigerian factor began to creep in. Nepotism, politics, poor maintenance culture etc.,  began to take their toll on the  complex. One-by-one, the company began to fall. Salaries were now being owed. Facilities began to depreciate and rot set in. Some production plants started packing up. Production tonnage began to drop steadily.  And the company collapsed. Then hunger and anguish set in.

Some of the workforce had moved on to some other things, while some others were literally stranded on the “DSC Island”.

And for a long while, the company was on its knees with all the concomitant consequences.

Then sometime in 2006, the federal government, under former President Obasanjo’s privatization programme, sold the steel giant to Global Steel  Holdings Ltd (GSHL), an Indian company headed by Mr Pramod Mittel. Nigeria  however reserved  20 per cent of the company’s holding, with the understanding and agreement that GSHL will pump in money to revamp the fast deteriorating company.  But the company failed to inject in the much-needed fund to kick up the revamp of the company. This led to the revocation of the sales agreement under late President Musa Yar’Adua.

Ever since then, the fortunes of DSC had remained comatose as nothing, just nothing, was happening, especially as the revocation of the GSHL ownership was trailed with sundry litigations etc.

Then an Indian company showed up again. This time it is Premium Steels and Mines, headed by Mr Prasanta Mishra.

After all the boardroom processes had been completed, the name of the company was changed from Delta Steel Company to Premium  Steels and Mines.

The good news is that the penultimate Friday, March 2, 2018, the Delta State Governor, Dr Ifeanyi Okowa commissioned the company., raising roof-hitting hopes that once again, the steel giant which had laid prostrate for twenty years,  is up and about to run again.

Under the guidance of the Minister of  Steel and Mineral Resources , Dr Kayode Fayemi, it appears that all the pitfalls in past efforts to revamp the company have been taken care of.

No doubt, the idea behind the setting up of the DSC as well as the Ajaokuta Steel Company, Kogi State, was to lay a solid foundation for the envisaged industrial growth of Nigeria.

For a developing nation, yet baying for growth and economic strength, the steel companies were meant to be the tonic for industrial development quest as well as solidifying its financial powers. But the steel dreams got bungled, what with the case of Ajaokuta steel mills fast turning an endless mirage.

But Mr Mishra, the new CEO/MD of Premium Steels and Mines believes that the former DSC yet has the capacity to draw Nigeria out of the wood of underdevelopment.

As one of the foremost integrated Steel plants in Africa, Mishra is confident that the company is poised to produce 1.2 million tons of various steel products per annum,, thus meeting about 50 per cent of the domestic needs of Nigeria, which is presently served through importation.

When this comes on stream, not only will  foreign reserves usually expended on huge importation be conserved, the economic activities that the production will engender and generate are bound to raise the nation’s GDP .

With the revamp of the company, there is hope that the industrial development of the country is not yet ruled out, given that the steel production in the country will serve as the industrial backbone of its growth.

And this will be manifest in many such areas as the automotive industry,  structural engineering, construction, high-rise buildings, bridges, building of malls.

Once more, there is a talk about chatting roadmaps that will ensure sustainable growth of the steel company. While other roadmaps failed, many believe that the roadmap by  Premium Steels and Mines has been carefully designed to really revamp the company in phases. While phase one, for instance, is aimed at stabilizing the sector and rebuilding the nation’s market confidence, phase two of the roadmap is targeted  at establishing Nigeria as Africa’s competitive market in mining and mineral processing centre; whereas phase three will be to help Nigeria build global competitive mining sector and related processing industry.

Although Mr Mishra admitted that there are some challenges in attaining the set goals, he sounded confident that the state-of-the art  technology now deployed to replace the obsolete automation systems, as well as the  auxiliary engines of the rolling mills, will enable the company to produce the highest grade of steel – BS4449.

He seemed to have also factored the need of the communities in his plan as he assured that the company will give remarkable support to education of the people, creation of plenty of jobs, as well as empowering women, and providing health care services.

Gov Okowa had charged the company to adhere strictly to local content laws by ensuring that job opportunities are given to the people of the state. Okowa who sounded enthused about the revamp of the company expressed hope that it will grow the economy of the surrounding communities, “put food on their tables”.

He was not alone in the hope for a better day for the people of the area. The President General of the Udu Communities, Chief Steve Sokoh, declared that with the commissioning of the company, “The long-awaited day has come”.

In the same vein, the Otota (Spokesman) of Udu Kingdom, Chief Sam Odibo as well as President of Aladja Community, believe that “at last the economy of the people of Aladja and environs will take a leap and we are excited to hear this”.

The volume of hope generated by the return of the steel industry is such that the people will not entertain any mishap again in the realisation of their dream of benefiting maximally from the presence of the steel giant in their land.


Lagos and the Tax Crunch

Let me first acknowledge that Governor Akinwunmi Ambode of Lagos State has, thus far, impressed some of us, Many had feared that given how he emerged as governor, that he would merely be an appendage of some other political moguls in the state. And that such moguls will literally be the unseen commanders and drivers of the engine of governance in the state.  But Governor Ambode has proven to have his head properly screwed on his shoulders, racing on with his own ideas of rejigging and retooling Lagos.

Indeed, the entire state has literally been turned into a huge construction yard with so much mega works taking place in so many locations across the state. And the legitimate worry for some of us is how the governor is going to fund the multiplicity of projects  in the state. In fact, many had worried that Gov Ambode was biting more than he could conveniently chew.

And so when he came up with a budget of over one trillion Naira, some of us knew that the pregnant snake will certainly give birth to a “long child”. In less than one month after signing the budget into Law, the Lagos State government is already rolling out “crazy” tax regimes which are expected to fund the ambitious budget.

First it was Land Use Charge (LUC), then Motor Vehicle Administration Agency (MVAA).

Understandably, there has been an outpour of outrage by Lagosians over the tax crunch being visited on them by the state government.

The Land Use Charge for instance, is hiked by 200 per cent at a time Nigerians, nay Lagosians are yet feeling the crushing effect of the economic recession. Those who have criticized the “heartless tax slam” have accused Governor Ambode of insensitivity to the plight of the ordinary struggling Lagosian.

At a recent forum, Lagos Means Business, Gov Ambode gathered the mega businessmen  in the state, people like Alhaji Aliko Dangote, Jim Ovia etc., to have a review of the new rates and taxes.  Of course, Dangote, Ovia and co lauded the tax initiative of the governor, but the governor must realize that is just one side of the story. The other side is frowning with vexatious disapproval.

Some have described the new law as obnoxious and bound to raise the ante of hardship in the state as the tax on Home owners will eventually be transloaded on tenants by way of increased rents to the same tenants who are already gasping in paying rents. Many may end up becoming homeless, and hit the streets and become nuisances.

The governor has explained that the homes of pensioners will be exempted from the tax crunch, just as the focus will be on commercial buildings, but the fact remains that the geometric increase in the tax will produce hardship among many Lagosians.

What is worse, in many of these homes, government’s input is still very absent. Many residents still depend on their own boreholes as source of water, they generate largely their own electricity, provide their own security, with many gated streets and estates, and in some cases, residents constructed and continue to maintain the access roads to those same homes, Lagos wants to come and collect 200% LUC. It is as pepperish as it smacks of oppression.

Next is the so-called  MVAA, which raised rates by over 1000 per cent. Haba! Under the new proposed rates for instance, a taxi seeking registration or renewal of its vehicle particulars will now pay N40,000 as against N3,525 it used to pay. The same goes for Kabu-kabu, car hire. In the same vein, mini buses and pick up vans which used to pay N2,500 will now have to pay N20,000. And it goes on and on for all other categories of road users even including Okada riders. Under the new  tax regime, Lagos will become verily uncomfortable to the poor.

It will become one of the most expensive cities in the world. Crime rate will increase. Motorists are already thinking of moving on to neighbouring states to renew vehicle particulars.

No doubt Governor Ambode is under pressure to finance the huge budget he willfully drew up for the state. Yes, we love the transformation, but it must not cost us our lives or our sanity. As the children would say, it is not by force to run a trillion naira budget.

What should make more sense is for the LIRS to devise means of widening the tax net in the state by ensuring that more and more people are dragged into the tax net. The more the merrier. Not overloading the few people paying tax with taxes that merely drive them nuts. To insist on it is to make Lagos an unfriendly place to do business and this could have a scary effect in turning away potential investors and also choke SME operators in the state with all the associated consequences.

It is good that Gov Ambode has said he is open to dialogue on the new tax regime. He must take another look at it all and know that the rich in Lagos are not up to 20 per cent of the population in the city. He cannot ignore the fact that next year is an election year. He cannot discount the rage of the masses. As the Holy Bible says, Let he who thinks he stands, take heed, lest he falls…