The Grey Chronicles

2008.August.25

Then: The Privatized NSC, 1994 – 1999, Part 2


On 31 January 1994, (NSC News, March 1994), from the eighteen (18) prospective investors, four (4) groups were pre-qualified to participate in the public bidding of 65% ownership of NSC, namely: Malaysian Wing Tiek Holdings Corp. Berhad, India’s Nippon Denro Ispat Ltd., Exchange Capital Corp. Consortium and AIA Capital Corp. Consortium. NDC selected Wing Tiek’s proposal to acquire 55% NSC’s primary shares for P12.375 billion, and the former signed memorandum of understanding on 12 October 1994 in the presence of Pres. Fidel V. Ramos and Malaysian Prime Minister Mahathir (NSC News, October 1994).

Former NSC Chairman and CEO Luis M. Mirasol, Jr. in an interview with NSC News explained that Wing Tiek Holdings Berhad, composed of seven subsidiaries. It was involved in the importation, exportation, and stocklist of steel materials, aside from manufacturing wire mesh, cold-drawn mild steel and stainless steel shafting bars, steel pipes and tubes. It is also an associate company of the Westmont Group (NSC News Supplement, December-January 1995).

Wing Tiek’s NSC embarked on the continuation of the Five-Year Expansion Program, designated as FYEP Phase II-A, which was completed in the second quarter of 1995. FYEP II-A included the upgrading of 4-Stand Tandem Mill electrical controls, the modernization of 5-Stand Continuous Mill automation, the installation of the Acid Regeneration Plant to serve the new Pickling Line No. 2, and Hydrogen Batch Annealing Furnaces (NSC News Supplement. August 1995). The last capital investment was aborted due to the fortuitous events: Wing Tiek sold NSC to Hottick, which had changed priorities.

In 1996, the Manufacturing Systems department (Noynay, 1996) rolled out the Production Tracking System under the Manufacturing Automation System Level 2, hereafter referred as PTS-MASS2, to replace the existing 1987-installed Unisys A-Series mainframe-based Production Control System. The PTS-MASS2, consisting of three (3) modules: Material Tracking, Quality Tracking, and Mill Condition Monitoring, provided basic information infrastructure supporting the production management of Cold Strip Mill and ETL3; linked to Level 2 (mill process computers) and Level 4 (Production Planning and Finance) systems and provided data to the Computerized Maintenance Management Systems for mill delay monitoring. (Note: The four level hierarchies was conceptualized at Purdue University as a model of Computer Integrated Manufacturing and adopted by many modern steel mills. Level 1 handles direct automation, Level 2 for process modeling, Level 3 for mill area supervisory control and Level 4 encompasses the business systems).

On the last quarter of 1996, NSC’s ownership changed hands from Wing Tiek to Hottick after the former’s failure of adhering to its original agreement with NDC—the sale of additional 12.5% block of shares in NSC to the public. Private ownership increased from 54.5% in November 1994, and then up to 74.5% in September 1996 after WingTiek paid P3.9 billion for an additional interest, however, it was effectively reduced to 69.2% when Wing Tiek issued new shares to Marubeni. When Hottick took over Wing Tiek’s 69.2% NSC stake in December 1996, it also assumed NDC’s 12.5% thus bringing Hottick’s total NSC share to 81.7% by February 1997 (see Appendix D: Transactions for NSC’s Stake (1995-1998). Unfortunately, noted a management staff, all these capital infusion did not benefit NSC but rather it went to NDC’s coffers and other shareholders.


Notes:

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

Balali, Macky P. (ed.) (1994), Wing Tiek Wins. NSC News, XIX: 10, Makati: Corporate Communications, NSC, 31 October 1994. p. 11. back to text

Balali, Macky (ed.) (1995), Dialogue: Poised for Growth. NSC News Supplement, Makati: Corporate Communications, NSC, December-January 1995. pp. 3—4. back to text

Balali, Macky P. (ed.) (1995), TPM. NSC News Supplement, Makati: Corporate Communications, NSC, August 1995, pp. 1—12. back to text

Noynay, R.R. (1996). Production Tracking System: Conceptual Design. Iligan City: Manufacturing Automation & Control Systems, NSC, 24 August 1996. back to text

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1 Comment »

  1. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

    Comment by Tim Ramsey — 2008.August.25 @ 11:44 | Reply


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