National Steel Corporation’s production capacity increased substantially during the Five-Year Expansion Plan [FYEP] in the 1990s.
NSC’s Annual Rated Capacity (‘000MT)(Data: NSC)
Phase II-B, although started in 1995, was aborted when Wing Tiek’s shares at NSC was bought by Hottick Investment Ltd.
Thus, from 1995 to 2004, there were no expansion projects started or finished during this duration. It should be noted that NSC was in liquidation between 2000 to 2004, which obviously meant that expansion was out of the picture. Thus, NSC capacity was stuck at 2.7Mtpa [Millions metric tons per annum].
Incidentally, Commodities Resources Unit [CRU], reported in October 2000 that NSC’s capacity, based only on hot-rolling and cold-rolling, at 2.7Mtpa.
In April 2005, Commodities Resources Unit [CRU], reported that NSC’s [now GSPI] capacity at 0.50mtpa. Meaning, from the total hot and cold rolling capacity of 2.7mtpa, GSPI was only operating at about 19% of its rated capacity.
During the GSII (the precursor of GSPI) and Filipino Galvanizers Institute [FGI] debate in July 2005, GSII, [President] Das assured, "is a long-distance runner which is now 70 percent rehabilitated and producing high quality steel." GSII, Das said, "is targeting to be fully operational shortly wherein it will have an annual capacity of 1.2 million tons of different steel products."
But in 20 November 2006, in a presentation to various visitors, GSPI credited itself to have a capacity of 3.0 Mtpa. In simple arithmetic terms, this would be roughly equivalent to the total of hot mill (1.7 mtpa) plus cold mill (1.0 mtpa) plus tinning lines (0.32 mtpa).
Does this mean that GSPI expanded its rolling capacity from 2.7mtpa in 2000 to 3.0mtpa in just one year? From 0.5mtpa in April 2005, to 1.2mtpa after July 2005, and eventually to 3.0mtpa in November 2005!
Was the slight ploy deliberately done to mislead the visitors into thinking that GSPI was commercially operational, as various newspapers reported:
“Global Steel Philippines announced [14 October] that its hot rolled coil (HRC) and cold rolled coil (CRC) lines are now fully operational. . . Global Steel, however, has repeatedly claimed that it is already commercially operating after undergoing rehabilitation since February last year.” (The Philippine Star, October 2005).
Any sensible steel company cannot declare added capacity, such as 0.32 mtpa for the tinning lines, if such capacity is still for rehabilitation. Even the big steel companies report such decrease in capacity for the year when their respective equipment undergoes a complete rehabilitation, such as complete brick relining, or major electrical or mechanical repair works or systems upgrade. A capacity becomes online again after completion of such activity.
Notes:
Commodities Resources Unit [CRU] (2000). CRU Steel Sheet Quarterly Statistical Review. Commodities Resources Unit, October 2000. back to text
Commodities Resources Unit [CRU] (2005). CRU Steel Sheet Quarterly Statistical Review. Commodities Resources Unit, April 2005. back to text
Go, Marianne V. (2005). Global Steel’s hot, cold rolled coil lines start commercial operation. Manila: The Philippine Star, 15 October 2005. back to text
Go, Marianne V. (2005). Global Steel accuses FGI of mounting ‘vilification campaign’. Manila: The Philippine Star, 09 July 2005. back to text
The Grey Chronicles 