The Grey Chronicles


The Myth of Global Steel

Filed under: 'Global' Chronicles,Commentary,Long Grey Notes,Management,National Steel Corporation,Philippines,Readings,Steel,Steel Manufacturing — reyadel @ 23:59
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Ever since Global Steelworks Infrastructure, Inc. [GSII] stepped in Philippine territory, I was one of those few observers wanting to know more about the global reach of Global Steel, the company. With only the Internet as a good means for research, as foreign newspapers are a dime a dozen in this faraway islands, I embarked on a journey which began as early as December 2003.

Global Infrastructures Holdings, Ltd. [GIHL], the sister company of India’s Ispat Industries, Ltd. [IIL], acquired National Steel Corporation [NSC] through its subsidiary then called Global Steelworks Infrastructures, Inc. [GSII]. On 25 August 2005, GSII officially changed its corporate name to Global Steel Philippines (SPV-AMC), Inc. [GSPI].

During the years when GSPI was still known as GSII, many business news writers and seasoned news reporters, relying on some other Internet web sites, reported—probably the correct term is misrepresented—that the mother company, GIHL, now more popularly known as Global Steel Holdings, Ltd. [GSHL] was one of the top steelmaker in the world. This claim has been cut down to size by «The Grey Chronicles» in several posts, such as: the series which began with Understanding GSHL, or The Steel Empires of Mittals.

Through the years, from 2004 to 2010, is Global Steel still global? Recent events that came to pass, particularly during the previous year might be positive proofs that the global-ness of Global Steel Holdings, Ltd. has turned into a mere myth!

When I was writing my master’s thesis: An Evaluation of Flat Carbon Steel Production of National Steel Corporation (NSC) from its Privatization in 1995 to its Liquidation in 1999 and its Implications to the Country’s Steel Industry, a sub-chapter, entitled Globalization of the Steel Industry, was devoted to the effect of globalization to the steel industry. One such observation is worth reiterating:

“Moitti and Sachwald (2006) noted that globalization redrawn the map of the industrial world; and while foreign direct investment has been a powerful engine of globalization in the 1990s but by 2000 it shifted gears to the expansion of productive activities in low-wage countries. Aside from cheap labor, however, expansion shifted to some countries because of proximity to raw material sources, reduced tariff and taxes, among others.”

This quote aptly highlights the foray of Global Steel to another low-wage country such as the Philippines. Even after the Asian Financial Crises, the Philippines’ proximity to China’s steel market still looked enticing, and the incentives and tax-holidays granted by the Board of Investments and the Philippine Economic Zone Authority to investors were added pluses.

But the Philippines’ former National Steel Corporation, now known as Global Steel Philippines, was only one of many steel plants and related industries Global Steel took to its fold. Other assets were added to its holdings, such as Nigeria’s Delta Steel Company and Ajaokuta Steel Company; Bulgaria’s Kremikovtzi Steel; a string of steel-related industries in the Balkans; and a steel concession in Libya.

From 2004 to 2010, a series of unfortunate events struck the holdings. Nigeria cancelled the concession in April 2008 for both Delta Steel Company and Ajaokuta Steel Company with Global Steel Holdings challenging the move in an international court (Agba, AllAfrica, 2008). Bulgaria invited ArcelorMittal to participate in the liquidation Kremikovtzi Steel in July 2010 (, 2010). Similarly, in July 2010, Kosovo Privatization Agency [AKP] tendered Llamkos Vushtrri for privatization (ECIKS 2010).

It tried to broker a deal for Zimbabwe’s Zisco; attempted to acquire Izmir Demir Celik, a steel mill in Turkey; reportedly acquired a coal/coke plant in Colombia; announced intention for a mining prospect in Armenia; proposed a $2.8-billion investment in Bangladesh; tried to buy a stake in Tunisia’s El Fouladh; planned for mining and coal preparation plant in Mozambique; even floated a separate company, Erebus, to spearhead a Brazilian venture to explore iron ore reserves; and attempted to enter the energy sector by acquiring two oil blocks in Georgia. Most of these newsworthy deals, however, apparently fell through.

To date, Global Steel Holdings, the often, yet incorrectly reported as among the top ten steelmakers in the world, has been minified with only Global Steel Philippines; the extended management contract in Libya; plus its debt-diluted shares in Ispat Industries Ltd.; and the floating skeleton-crew Erebus company, among others, as part of its steel holdings.


Agba, George (2008). Nigeria: Mittal May Drag FG to Court. AllAfrica. Abuja: Leadership Nigeria, 07 April 2008. back to text

ECIKS (2010). Privatizohet fabrika e llamarinës Llamkos [trans: Privatized factory sheet Llamkos]. On-line: Nisma Ekonomike për Kosovën [ECIKS] {trans: Economic Initiative for Kosovo}, 12 July 2010. back to text.

Moitti, Luis and Frédérique Sachwald (2006). The ‘Old Economy’ in the New Globalization Phase. Paris, France: Institut Français des Relations Internationales, 2006. p. 16. back to text. — Sofia News Agency (2010). Bulgaria Invites ArcelorMittal to Participate in Liquidation of Bankrupt Steel Giant. On-line: World Countries, 15 July 2010. back to text.

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 LicenseDisclaimer: These posts do not necessarily represent any organization’s positions, strategies or opinions; refer to this blog’s self-imposed rules: A New Year; New Rules. Unless otherwise expressly stated, posts are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License. Comments are moderated to keep the discussion/s relevant and civil. Readers are responsible for their own statement/s.

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