By Emeka Nze
Inappropriate price of its products induced by government interference was the actual reason why the multi-billion dollar plant, the Delta Steel Company (DSC), Owvian-Aladja, which was commissioned in 1982 collapsed, failing to meet the aspiration of Nigeria and stalling the country’s hope to industrialisation.
The steel company was compelled by regulatory authorities to sell its products below market value at N4,000 per ton, far below the commercial price at the time, whereas, its close rival, Universal Steels Limited, a privately run enterprise, was selling similar product at N8,000 per ton at the time, forcing DSC to close shop.
This was disclosed recently by Engr. Abiodun Abe, Managing Director of Mines Development at BUA International Limited during an event organized by the Nigerian Gas Association and held at the Civic Centre in Lagos.
Engr. Abe, who represented the Group Executive Diretor, BUA Group, Alhaji Kabiru Rabiu at the event, advised the government to allow market forces to determine the price of gas as against the current inappropriate pricing which does not encourage gas producers.
He said if the price of gas was not right, there will be no incentive and motivation for the oil and gas companies to invest in the production of gas, saying it was this inappropriate pricing that contributed to why the DSC could not continue in business as a going concern.
Nigeria currently spends about N887 billion annually on the importation of steel and aluminium products, and the Nigerian tax payers would have been spared this financial burden had the DSC not stopped operations.
Premium Steel, whom the DSC was sold to by the Assets Management Corporation of Nigeria (AMCON), has continued to assure the government and people of Nigeria of its capacity to revive the moribund plant.
The DSC Complex was built on about 172 hectares of land located in Udu Local Government Area of Delta State at a cost of $1.89 billion (at an exchange rate of N0.6 to one U.S. Dollar at the time).