The Grey Chronicles

2009.July.3

To Dream, Perchance To Plan



Electrolytic Tinning Line No. 3, National Steel Corporation, Iligan CityIn 1989, the National Steel Corporation [NSC] installed a Ferrostan-type 150,000-metric tons per year [mtpy] Electrolytic Tinning Line No. 3 [ETL3], manufactured by Wean with General Electric controls. It started commercial operations in 1991 producing Tin Plates in Coils and Sheets from imported and locally produced tin-milled black plates [TMBPs]. Tinplates are used in manufacture of Sanitary Cans, Infant Dietetics, Mill Cans, Industrial Cans, Crown & Screw Caps, and Battery Casing. In 1998, ETL3 became the lone electrolytic tinning line of the Philippines when NSC decided to close its other ETL located at its Pasig plant. It stopped operations in November 1999, producing its last 3,964 metric tons, prior to the plant cessation of NSC then remained idle since June 2000 when Malaysians left and waited for the liquidation of assets.

When Global Steel Holdings Ltd. [GSHL] took possession of NSC’s plant assets in 2004, it embarked on an ambitious rehabilitation plan for ETL3. Hiring an expatriate-manager for ETL3, formerly a quality inspector in a Middle East steel plant prior to his assignment to the Philippines, the rehabilitation plan ended when market forces proved to be leaning toward the steel production other than tinned products. There were several subsequent attempts to revive ETL3 operations, but unfortunately each of these series of attempts were given up for much more pressing activities in other production areas.

With management edict on freeze hiring effective beginning 2005, most of the hired local employees of ETL3 were re-assigned to various plant positions in Cold Rolling and Hot Rolling divisions. Others opted to resign their positions and looked for much greener pastures abroad. The expat-manager of ETL3 was re-assigned to Cold Rolling Quality Assurance [QA]. In his illusions of grandeur, this expat-manager mistakenly thought he was the head of that department, showing his version of an organization chart for the department with him as head, while in fact he was only some sort of a technical aide of the sitting QA Division Head. The expat-manager recently resigned early this year, after amassing millions for services rendered!

Paxton (2005) interviewed President Sushant Das last 19 August. Das claimed:

“ . . . repairs to a tinplate line were 90 percent complete. Global Steel would have capacity to roll 75,000 tonnes a month of the tin-coated steel, which is used in food and beverage packing, he added. … Tin has lost about 25 percent in value since hitting a 15-year high in May 2004. … Das said Malaysia and Indonesia would supply the tin, while Japan and South Korea would supply tin mill black plate — the steel base — for an initial period.”

The crux of the matter: the purchase of tin anodes, the basic ingredient used for tinning, was too expensive for the cash-strapped subsidiary. Furthermore, Ispat Industries, Ltd., the supposedly mother company of Global Steelworks Infrastructure Inc [GSII] renamed in August 2005 as Global Steel Philippines (SPV-AMC), Inc., was also embarking on several expansion projects of its various continuous galvanizing lines [CGL] which included a tinning section.

With the steel exports in China surging anew, the subsidiary’s expat management issued an order to revive ETL3 operations, plus other production lines to support its operations. Except for the few basic rehabilitation activities done between 2005 and 2007—if cleaning with rags, removing cobwebs, repainting various parts, or general housekeeping could be called rehabilitation—most of the component parts of various ETL equipment and electronic controls, including support facilities such as high-bay lighting, overhead cranes and airconditioning units, have already been transferred to other operating lines inside the plant.

When a manager announced my impeding assignment to help come up with a rehabilitation plan for the revival of ETL3, I refused outright, not as an excuse from work, but justified that the plan to rehabilitate it was a useless proposition. It had undergone a series of rehabilitation programs in the past four years to no avail because whenever the plans required purchase of necessary spare parts, the requisition was immediately triggered but the actual acquisition was delayed because of the precarious financial situation of the company. It cannot even pay its own employees on time, knowing the fact that employees’ compensation is but an iota compared to any financial requirements of some rehabilitation plan.

Incidentally, the internal financial auditors of GSPI required that all purchase requisitions are reviewed monthly and to forego all previous requisitions with no movement for a certain duration. With the interest of ETL3 rehabilitation waning through a lapse of time coupled with the ever-present market forces subsequently changing the corporate marketing focus, eventually the whole ETl3 rehabilitation plan would always come to a screeching halt, shelved then forgotten!

Similar scenarios have been repeated time and again. Meanwhile, all across the plant, there are still ongoing rehabilitation plans that have languished through the passage of time.

A production line devoid of main controllers since 2005 because the management then thought it could modernize the same without investing or disbursing the necessary funds to purchase new spares and materials to do the rehabilitation activities. Yes, back in 2005, they have already dismantled most of the old pneumatic- and hydraulic-based components, destined to be replaced with new electronic- or computerized-based parts. At present, or four years later, the electrical control room contained nothing but flickering fluorescent lamps on the ceiling in time for Christmas and conduit pipes protruding from its floor awaiting the necessary cables to be pulled. Also, an electronic control panel cabinet, without the necessary components such as metering, power supplies, etc., is rusting outside the control room.

A demarcated area designated with signs: “DO NOT ENTER: Galvanizing Line Project on going!” with nothing on it but empty space. This area was marked circa 2006 had remained the same since then. Never mind that the tattered roof is not shielding the area from the natural elements.

A foundry shop with outside facilities visibly newly painted, the equipment inside were completely derusted in 2007 resulting from its idleness since 1999. During NSC’s era, this foundry shop was one of a kind in the Philippines. Then, the rehabilitation activities ceased sometime early 2008. And nobody knew when the plans for rehabilitation would be revisited.

Two sections of Batch Annealing Furnaces remained unused since 1999. The Japanese-supplied facilities were rehabilitated as early as 2005, but after finding out that the LPG consumption of its affiliated Gas Generators was too high, some of the latter’s control parts were immediately transferred to the Central Utilities needing the same. Incidentally, at another area, only two of three American-supplied Gas Generators are operational. Although the construction of heat exchangers in lieu of obsolete bundled tubes for these generators have been planned sometime 2006, with the heat exchangers arrival in 2007, they have remained unpacked and not installed because there were no competent mechanical system engineers to design the revisions. Then there was a plan to put up a nitrogen-cracking plant to replace all the gas generators. Except for an exchange of emails for the gas volume required by all BAF facilities, the plan went kaput as fast it was conceived. The other BAF facilities were revived sometime in May 2007 with a dream of producing enough works-in-process for ETL3. Unfortunately, the plan went puffed, because—you’ve guessed it!—the volatile market forces again changed the production priorities!

Oh, to dream . . . perchance to plan! Wake up everybody . . . you’re all late for bed!


Notes:

Paxton, Robin (2005). Philippine steel mill plans tinplate by November. Manila: Reuters Limited, 19 August 2005. back to text

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 LicenseDisclaimer: The posts on this site do not necessarily represent any organization’s positions, strategies or opinions; and unless otherwise expressly stated, are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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