Dana Steel Nigeria Commissions N5.4 Billion Billets Plant
November 20, 2009 by Bunmi Awolusi
Mr. Jacky Hathiramani
Dana Steel Limited, the core investor in the Katsina Steel Rolling Company, has recorded a milestone in its privatization Post Acquisition Plan (PAP) with the commissioning of its new 180,000 metric tons billets manufacturing plant. The N5.4 Billion Plant (Steel Melt Shop) is a major step in the company’s backward integration strategy and is sure to boost the operations of the Steel Mill significantly.
Excited by the development, Jacky Hathiramani, Managing Director of Dana Steel expressed appreciation to the Federal Government, and Government and People of Katsina State, for their belief in Dana Steel, and their support in ensuring that the plant comes on stream. He said that “with the Steel Melt Shop now operational, Dana Steel will now cast its own billets from metal scraps. This would lessen the Mill’s dependence on purchased billet by up to 81%, and improve overall efficiency and gross profit margins. The rolling mill has installed capacity of 207,000 metric tons.”
Hathiramani noted that, prior to the commissioning of the Plant, Dana Steel had to rely on billets imported mainly from Ukraine, and also from Brazil, China, and Russia. “The lengthy import cycle, the need to stock a substantial supply of billet to cushion against outages, the necessity of road transport, and the need to pre-pay for imports resulted in an extremely long working capital cycle, requiring large amounts of cash borrowing to feed working capital needs. This led to high interest expense and depressed margins”, he said.
Since taking over the moribund Katsina Rolling Steel Mill in December 2006, Dana Group has invested heavily in the refurbishment of the plant. Today, the entire induction furnace and Mill have been completely renovated and updated with the latest technology. Three sizes of bar are currently produced; 12mm (50% of sales), 10mm (25% of sales) and 16 mm (25% of sales).
The activities of Dana Steel have also generated employment for many. The management of the company inherited 56 full time staff and 30 contract staff on take-over in December 2006 but, as at October 2009, the number had increased to 207 full time staff and 63 contract staff. With the commissioning of the new billet plant, more staff will be employed.
As a responsible corporate citizen, Dana Steel has made significant contributions to the socio-economic development of its host community. The company’s large Housing Estate serves both its staff and other members of the local community, and its Staff School, which was closed down, has been put back into operation; students/pupils come from the community and from workers families. Only recently, Dana Steel sank five boreholes in various locations within the metropolis and repaired all the Streets Light along the Three Kilometer Shehu Musa Yar’adua, Katsina.
Dana Steel Limited is a subsidiary of Dana Group, a conglomerate with business interest in different sectors of the Nigerian economy including Chemicals, Pharmaceuticals, Plastics, Electronics, FMCGs, Automobiles and Aviation.
