The Grey Chronicles

2008.July.22

Before: The Government-Owned NSC, 1974 – 1994, Part 3


NSC increased its Hot Strip Mill capacity by more than 200% after the completion of Phase II-A with the installation of the 1.20 mtpa seven-stands Hot Strip Mill No. 2. Consequentially, about 0.400-mtpa was added to Cold Strip Mill’s capacity when NSC commissioned 1.00-mtpa Pickling Line No. 2. Thus, the total NSC’s primary capacity—includes Hot Strip Mills and Billet Shop—is rated at 2,000,000 metric tons per year or 2.00-mtpy.

Prior to the commercial operations of the new Hot Strip Mill, NSC secured in 1990 long-term supply agreements with four major slab exporters. It has agreements with Companhia de Siderurgica de Tubaraò (CST) for 300,000 to 500,000 MT per year; Pohang Iron and Steel Co. Ltd. (POSCO) for 100,000 MT per year; and China Steel Corporation (CSC) for 100,000 MT per year; plus Broken Hill Proprietary Ltd. (BHP) for 100,000 MT of slabs/HRC minimum supply per year (NSC News, April 1990) .

An incremental Phase II-B, drafted in 1994 (NSC, 1994) , planned to complete the balancing of plant capacities—expansion of Hot and Cold Rolling capacities to 2.80Mtpy and 1.6Mtpy, respectively—then integrate rolling operations from Hot Mill to Tinning Lines. The main feature of Phase II-B for Pasig was the conversion of the Halogen ETL1 to produce tin-free products. On the NSC’s 20th Anniversary on 22 February 1994, Rolando S. Narciso, President and COO, remarked, “Phase II-B will allow this company to gain additional capacities at a very minimal investment cost per ton” (NSC News, March 1994) .

Phase III involved the full integration of NSC into iron and steelmaking, dubbed as the Integrated Steel Mill (ISM) project. When NSC closed, technical feasibility and cost studies for Phase III had already been carried out by US Steel’s subsidiary, USX Engineers. NSC was even contemplating on the installation of a direct-smelting ironmaking plant and a thin-slab flat rolling or Corex compact-strip mill somewhere in PHIVIDEC Industrial Estate, Misamis Oriental (NSC News, September, 1993) .

With the lesson learned during the 25 April 1995 Mindanao-wide 138kV grid power collapse (Valencia, 1995) , the ISM project (Longakit, 1993) was planned to be autogenous—self-generated power and energy—aside from contributing an additional 300 megawatts of excess electric power to the Mindanao grid. Furthermore, a self-liquidating prospect, ISM (Bañares, 1990) will improve NSC profitability as it will address NSC’s existing and long-term vulnerability to supply and price fluctuations of its raw materials required for its continued operations.


Notes:

Santos, Bayani Jr. (ed.) (1990), Managing Our Raw Materials Requirements. NSC News, XV: 4, Makati: Corporate Communications, NSC, 30 April 1990. pp. 7-8. back to text

National Steel Corporation, Annual Report. Iligan City: NSC, various years (1980-1994). Cited as NSC and Annual Report Year.back to text

Santos, Bayani Jr. (ed.) (1994), The ABC’s of Privatization. NSC News, XIX: 3, Makati: Corporate Communications, NSC, 31 March 1994. pp. 12-13. back to text

Santos, Bayani Jr. (ed.) (1993), The integration riddle. NSC News, XVIII: 9, Makati: Corporate Communications, NSC, 30 September 1993. pp. 3 -5. back to text

Valencia, F.C. (1995), “Alternative Source of Power,” Department Memo. Iligan City: Project Engineering, Cold Mill Expansion, NSC. 20 June 1995. back to text

Longakit, Glenmoore (1993), Probing the ISM Study. NSC News, XVIII: 2, Makati: Corporate Communications, NSC, 31 March, 1993. pp. 4-10. back to text

Bañares, Oscar (1990), Rationale: An Integrated Steel Mill for the Philippines. NSC News, XV: 4, Makati: Corporate Communications, NSC, 30 April 1990. pp. 1 – 3. back to text

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