NSC needs tariff protection to be viable, say Indian owners

Global Infrastructure Holdings Ltd. (GIHL) said yesterday the newly-opened National Steel Corp. (NSC) needs tariff protection for a couple of years for it to become viable and competitive.

According to Sushant C. Das, president of Global Steelworks International, Inc. (the new corporate name of NSC), the recently revived steel plant would initially need some tariff protection to get back on its feet.

"Without tariff protection, importers would just bring in cheap steel products and not buy GSII’s products," Das said.

But aside from tariff protection, GSII would also need some relief from high power rates, Das said.

According to Das, GSII is asking for a tariff cover of 15 percent for all steel products produced by GSII which include hot and cold rolled coils and tinplates.

"GSII is already operating eight hours a day, seven days a week," Das said.

On Tuesday, Das showed Manila-based journalist GSII’s production of cold-rolled coils to dispel reports that the steel firm is not yet operational.

GSII is initially producing cold-rolled coils while at the same time rehabilitating the plant’s other rusted machinery.

GSII’s production of cold-rolled coils would start at between 5,000 to 10,000 metric tons (MT) a month for the first three months before ramping up production output to 30,000 MT.

The primary market, Das said, would be for domestic buyers. GSII’s operations of hot-rolled coils, Das said, would begin only by May with production output initially at 5,000 MT before eventually reaching 30,000 MT.

GSII’s initial operations, Das said, has already resulted in the employment of about 500 workers.

Das further revealed that GSII may in the future build its own power plant especially if a projected power shortage becomes a reality.

Local businesses in Iligan are already expressing concern that the steel firm’s power needs may result in a power shortage not only in the province but in the whole region.

Steel production is a power-intensive industry.

GSII’s request for tariff protection is not expected to sit well with local appliance manufacturers who have expressed opposition to the grant of tariff protection for the steel firm.

According to industrialist Raul T. Concepcion, whose family manufactures refrigerators and airconditioners, extending tariff protection to NSC would adversely affect local appliance manufacturers who also use steel products.

If government must extend tariff protection to NSC, Concepcion said, it should be specific and limited only to products produced by NSG.

NSC’s closure in the early 1990s was attributed partially to competition from smuggled imported steel products.

Local appliance manufacturers warn that if government grants full tariff protection to NSC, the local appliance industry would become less competitive because the steel inputs of the appliance industry would become more expensive-making locally-manufactured appliances more costly.