The Grey Chronicles

2009.July.29

Pramod Mittal Visits GSPI



Admin2 Facade

Admin2 Facade

Last 19 July, I was at Global Steel Philippines (SPV-AMC), Inc. [GSPI] premises and was wide-eyed and surprised by the manicured lawn fronting the Administration Building 2. The Road A from Admin2 to the Cold Mill building parallel to Macapagal Avenue was also free of dead leaves, debris, trash and garbage. There were even janitors cutting grass between the avenue and Road C, as well as dead trunks and branches from the trees at the Admin2-Foundry Shop parking area were also cleared. I could even heard the water freely-flowing in the drainage canal parallel to the Road C, it sounded like a little brook silently rippling through its path free of debris. [Note: the picture shown left is from NSC’s archive.]

For the past five years since 2004, the asphalt of Road A could briefly glimpse the rays of the sun only on a raw almost yearly phenomena, i.e, either when heaven is raining cats and dogs that all the accumulated forest-like debris on the tarmac are washed away to clog the drainage canals along side Road A; or when there are some big wigs: Pramod and the GSHL promoters, the friends of Pramod and GSHL—especially bankers; or auditors for Quality System, TPM and like are coming in to visit the plant. Usually days—not weeks—prior to these rare occasions, the red carpet is rolled out, the lawns manicured, the trees pruned, the Admin2 lobby’s floor polished and the mural buffed and shiny. After these events, when the visitors have come and gone, the scenery reverts back to its previous ways. Even my higher-than-other-tots-his-age three-year old son would seemingly be hidden among the reed grass growing with abandon.

As suspected, somebody big must be coming to visit. The Gate guard claimed that it was the Big Man himself, Pramod Mittal, visiting that week and asked me what would be the purpose of such visit. I failed to answer as I myself had no idea what could it be. Maybe Pramod Mittal will announced the resumption of operations, he offered an answer.

Beginning 04 December 2008, GSPI declared a plant shutdown blamed to the recent global economic crises. GSPI operated for a few days in March and April, then in the middle of June and resumed on the third week of July. There are indications that the most recent campaign would last until the end of the present month.

Moreover, there were also talks circulating around the plant that although there were some slabs already in Manila, but these were denied ownership by GSPI and were thus offered for sale by Customs to the highest bidder. The lot also included several much-needed maintenance spare parts. Apparently, as one insider claimed, GSPI was asking for a much lower price per ton compared to what was written in the sales contract from the original supplier. Unfortunately, no details have been published regarding this case.

On 21 July, coming in for graveyard shift, I noticed that the fourth floor of Admin2 was lit as well as a long red carpet was neatly laid in the lobby. The Gate guard updated: “They’re still in a meeting, which began at 10 this morning.” I saw, however, some managers, apparently coming from the same meeting, were hurrying out of the lobby to the waiting company service van outside the Admin2 lobby. So probably the meeting was near its close.

Pramod MittalThe following morning, almost everyone on duty at GSPI knew that Pramod Mittal lashed out to some expats because although there were a pile of pending orders for GSPI products, there were no available raw materials, slabs, to process to meet the customers’ orders. I overheard some who were present in the meeting that apparently the furious words to the expats were only for show as locals were also present in the same meeting. Hearsay or not, this remark proved that there are some things seen that say a lot out loud, eventhough these are not heard.

The so-called “non-expert” locals perceived that there is a systemic fault in the GSPI organizational structure, wherein the raw materials procurement is only a small part of purchasing department under the umbrella of a supposedly corporate-wide Supply Chain Management. One local stated that the powers-that-be failed to acknowledge the obvious difference between ordinary purchasing process of nut-and-bolts vis-a-vís the strategic aspect of slabs procurement. Another one cited what was once the organizational structure during the pre-privatized NSC era: Slabs and all other raw materials, such as hot-briquetted iron [HBI] and other additives for Billet Steelmaking; hot-rolled coils for Cold-Strip Mills; and tin anodes for the Tinning Lines were all expertly handled by a different group, Raw Materials Procurement, separate but equal to the Supply Division. The latter only handled materials and supplies [M&S] of regular, insurance or order-when-needed spares; including those items as required by the various continuing expansion projects. One also offered a well-thought-of insight that procurement of slabs boils down to ultimately renting the use of an integrated steel plant, of which the end products of such rent are slabs itself.

Furnace Pouring SteelIn case every land-based expat forgot, the Philippines is a group of islands forming one nation. It is literally surrounded by oceans and seas, separated from most of the Asian continent, thus slabs are transported by ships, and not overland compared to the Indian subcontinent. Slabs are the last item, if not excluded, in just-in-time shopping lists. Even if ‘money is no object’ as this overused phrase had become colloquial nowadays, slabs procurement takes time: literally months, to be shipped from the reliable supplier to the Philippine shores. It also takes strategic decision, one of the several functions of top management, to buy slabs whenever the prices (although inelastic) are low while envisaging a surge of prices for its end products: hot-, and ultimately, cold-rolled products. Otherwise, why would green grass be needed when the horse is already dead? Too-late-the-hero or johnny-come-lately is indicative of reactive leadership, or as a batch mate once remarked: “micromanaging a macroproblem,” and do not manifest a “steely resolve.”

Some rank-and-file even asked whether was it not Pramod Mittal’s fault not knowing of this predicament at GSPI when the steel market recently awoke from its bear’s sleep? Oh well, just what I thought! Even they, who are looked down by some “experts”-expats of only doing what they are told, at least know the steel industry by heart, including its nuances and idiosyncrasies! Maybe they learned through 15- to 20-year experience and not by rote.


Notes:

Picture of Administration Building 2 [Admin2] was taken by the National Steel Corporation[NSC] Plant Facilities Preservation [PFP] team and used for a three-stage rehabilitation proposal in Powerpoint presented to then Vice President Teofisto Guingona in July 2003 by the NSC Liquidator.

Picture of furnace pouring molten steel to a trough was originally published by BBC News and found on several related articles on steel, such as British Steel to forge merger. BBC News, 12 November 1997.

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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