Business
Dana Steel Commissions N5.4bn Billets Plant
Dana Steel Limited, Core investor in the Kastina Steel Rolling Company has recorded a milestone in its privatization Post Acquisition plan (PA) 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 integration strategy meant to boost the operations of the steel mail significantly.
An excited Jacky Hathiramani, managing director, Dana Steel, expressed appreciation to the Federal Government, government and people of Katisna State for the belief and support in ensuring that the plant comes on stream.
“With the steel melt shop now operational Dana steel will now cast its own billets from metal scraps. This would lessen the mills dependence on purchased billet by up to 81 per cent, and improve over all 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 Ukrine, Brazil, China, and Russia.
“The lengthy import cycle, need to stock a substantial supply of billet to cushion against outages 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 noted.
Since taking over the moribund Katsina, Rolling Steel Mill in December 2006, the Dana Group has invested heavily in the refurbishment of the plant. So far, the entire induction furnace and mill have been completely renovated and up dated with the latest technology. Three sizes of bar are currently produced: 12mm (50 per cent of sales Comm (25 per cent of sales) and 16mm (25 per cent of sales).
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.