Privatization plans for NSC began as early as 1990. It was successfully approved by the Philippine government with Malaysia’s Wing Tiek acquiring controlling interests in November 1994. Privatization was pushed by the national government to limit its financial exposure on the myriad of government-owned and controlled corporations, such as NSC. The next year, NSC retrenched about 500 personnel for the first time since 1974. The reduction was premised on building a leaner organization.
Wing Tiek sold its entire 69.2% stake to Hottick in December 1996 while NDC optioned its own 12.5% stake to the latter on February 1997.
On 15 October 1997, the Board of the Philippine Economic Zone Authority (PEZA) declared NSC as a Special Economic Zone, pending Presidential Proclamation, with downstream steel products manufacturing and fabrication industries and related sectors as preferred industries (de Lima, 1999).
By 1995, the Cold Strip Mills and the two Electrolytic Tinning Lines, including the Billet Steelmaking Plant, were ISO 9002:1994-certified. The Hot Strip Mills were in the process of certification prior to NSC closure.
In 1999, amidst proposed backward integration plans, equipment and technological modernization, and employee value-enhancement programs, NSC officially underwent a liquidation plan resulting in the retrenchment of 1,400 employees, while a number opted for earlier retirement.
When NSC closed shop, the scrap iron business lost P1.4-billion and the Refractories Corp. of the Philippines lost 30% of its market. Mabuhay Vinyl Corp., supplier of NSC’s chemicals, was severely hit, and the National Power Corp. lost P720M in sales yearly (Philippine Star, 17 May 2002).
This blog presents the facts and analyze as why the privatized NSC failed its promise. Using research, this blogger relates the quantitative data with qualitative facts.