Flashback: 1986: Bethlehem Steel, Burns Harbor Plant, Indiana, USA
Woody Manner was a retired cold rolling mill operator of Bethlehem Steel and was working as a BIEC/USX consultant. (Bethlehem International Engineering Co./ US Steel Consultants). Standing at over 6 feet and well past 60, he's from Baltimore who spent the best and the longest years of his life in a steel plant.
We met Woody Manner in spring of 1984. We were sent by our company, National Steel Corporation to train on the operations of Bethlehem's 5std cold rolling mill which we bought. From March to May, daily except on weekends, we would meet Woody in a mobile house converted to training center inside the steel complex. He was our lecturer, trainor and mentor.
Woody drives a big American car, a Chevy 6 cylinder (or was it 8 cylinder?) with wood grain dashboard and interiors. He loved this car---big, long, spacious, but most of all, fast and powerful. He would brag to us about this to which we would always sneer and reject. "But Woody, it's gas muzzzler. And why would you like a fast and powerful car when you can't run it at top speed because you have speed limits. Bring it to the Philippines and you can run it to your heart's content. The limit there is just according to you to your limit."
But Woody then would not budge. To him, Americans love big American cars.
Woody's story somehow reminds me of the crisis American car companies are facing today. His attitude in fact sadlly reflected why the Americans lost their grip in the automotive market to the more efficient and convenient Japanese cars. Moral of the story? Well, look up continuous improvement and what does this really mean.
Friday, January 30, 2009
Thursday, January 29, 2009
Pittsburgh and Iligan: A tale of Two Cities
They were once called the steel cities, Pittsburgh in the US and Iligan in southern Philippines.They were cities built by steel. Iligan started in the 1950's and Pittsburgh a century before that. As steel is considered the backbone of the nation, they have contributed tremendously to the progress of their countries and heavily impacted on the lives of many citizens. People from all over flocked and migrated in these cities. They were then the boom cities. Sadly, not anymore today.
I was part of that history. I spent the best years of my life in Iligan. We lived and breathed steel then. Like many who came before and after us, I was a migrant hooked up to the world of steel. I joined National Steel Corporation in the mid 1970's right after earning my chemical engineering degree. I thought I would eventually retire there. We were then the toast of the company. We dominated the social and economic life of the city by our sheer number and financial capability and our youth's adventurous activities. True, there were other major industries there: cement plants, coconut mills, refractories, power plants, chemical industries, etc. But Iligan was National Steel country. When NSC sneezed, Iligan caught pneumonia so to speak. That was the roaring 70's and the 80's, our time.
Is there life after steel? While Pittsburgh is undergoing a successful transition from its fabled steel past, Iligan seemed to live still with its past. Now owned by the Ispat group of India headed by the "other" Mittal, NSC was renamed Global Steel. But it is only in name that it seemed global. It is only a shadow of itself; a far shadow in fact. Gone are the hustle and bustle of men, machineries, equipment, transport both land and sea, etc. Hundreds of its best and brightest are now in Canada, the US, Australia, New Zealand, and the Midlle East. A significant number settled in Manila and neighboring cities and those who remained in Iligan can do only so much.
It was a lost glory.
Sadly, its present state reflects the state of the steel industry in the Philippines. Instead of moving forward like what our neighboring countries did, it went the opposite. The dream of an industrialized Philippines via iron and steel integration appeared hopeless and lost. The steel industry in the Philippines is and had not been a priority in the country's state of affairs. Quo vadis?
I was part of that history. I spent the best years of my life in Iligan. We lived and breathed steel then. Like many who came before and after us, I was a migrant hooked up to the world of steel. I joined National Steel Corporation in the mid 1970's right after earning my chemical engineering degree. I thought I would eventually retire there. We were then the toast of the company. We dominated the social and economic life of the city by our sheer number and financial capability and our youth's adventurous activities. True, there were other major industries there: cement plants, coconut mills, refractories, power plants, chemical industries, etc. But Iligan was National Steel country. When NSC sneezed, Iligan caught pneumonia so to speak. That was the roaring 70's and the 80's, our time.
Is there life after steel? While Pittsburgh is undergoing a successful transition from its fabled steel past, Iligan seemed to live still with its past. Now owned by the Ispat group of India headed by the "other" Mittal, NSC was renamed Global Steel. But it is only in name that it seemed global. It is only a shadow of itself; a far shadow in fact. Gone are the hustle and bustle of men, machineries, equipment, transport both land and sea, etc. Hundreds of its best and brightest are now in Canada, the US, Australia, New Zealand, and the Midlle East. A significant number settled in Manila and neighboring cities and those who remained in Iligan can do only so much.
It was a lost glory.
Sadly, its present state reflects the state of the steel industry in the Philippines. Instead of moving forward like what our neighboring countries did, it went the opposite. The dream of an industrialized Philippines via iron and steel integration appeared hopeless and lost. The steel industry in the Philippines is and had not been a priority in the country's state of affairs. Quo vadis?
Wednesday, January 28, 2009
The Russia-Ukraine Gas Row and My Russian Diary
The recent feud on gas supply between the Moscow and Kiev governments which threatened and affected Europe's own gas supply amid the cold winter season evoke memories of my unforgettable experience in this once mighty superpower called the Union of Soviet Socialist Republic (USSR). I once attended the 27th UNIDO (UNDP) Training for Iron and Steel engineers in Zaporozhye, (Ukraine), USSR from March to July 1984. I was with a group of 17 other engineers from 10 developing countries and one of the two Filipino engineers representing our country.
It was post Brezhnev and pre-Gorbachev time. Glasnost and Perestroika were then unheard. It was Tavareesh(Comrade) Chernenko's era. When I arrived Moscow on a cold freezing day of March in 1984, I couldn't forget the voice of the stewardess of out Aerofloat flight originating from Singapore with New Delhi as stopover.
In our taxi to our hotel, (the Rossia Hotel, just overlooking the Red Square, at that time was reportedly Europe's largest hotel with 3000 rooms), I was complaining to Oleg, the UNIDO guy who fetched me. "Mr. Oleg, but I thought it's already spring as per the aide memoir!" His answer was strikingly remarkable, as it dawned on me that not all people in the USSR were Russians. "Mr. Delid, to the Ukrainians, it's still winter time. To the Muscovites, it's now spring."
We were based in Zaporozhye, a large industrial city in the southwestern part of Ukraine, with Zaporohtahl Iron and Steel Works as our base plant. This was an integrated steel complex with about 20,000 workers. All throughout our 4-month stay however, we traveled far and wide the soviet territory to such cities as Kiev, Krivoi Rog, Zdhanov, and Odessa, all parts of Ukraine and Moscow, Liepitz, Cherepovets, and Leningrad, all parts of Russia. Many of the largest steel mills in the world were found in these cities. In all of these visits, one of the things that stuck to our minds was the abundance of gas and minerals. So abundant that even in our written and verbal reports and informed discussions, we would then report that there was no such thing as energy conservation there. There was no need for it. They had lots of it; excess in fact. And we were not referring only to our usual enercon programs of shutting down lights and airconditioning when not in use. We were talking about energy usages on big and various reheating furnaces, etc.
I bid goodbye to Russia on a warm sunny afternoon in July 1884. But as I looked out of the plane's window, trying to catch a last glimpse of this beautiful city by the river, I could then sense that in not too far future, something big will happen that will transform again this country, something in the scale when the October Revolution of the early 1900 took place. Finally, when all I could see was a blurred vision of the city, I closed my eyes, took a long deep breath, and silently told myself; "Doshbedanya, Russia. Spaseeba. Spaseeba Bolshoi." (Goodbye, Russia. Thank you. thank you very much.")
That was 25 years ago. Now they have split up into two different nations under different leaders. Obviously, they have to split up too these resources. But they are still interconnected with pipelines that stretch far and wide to Europe. Fortunately enough before the dispute erupted into a full blown crisis, diplomacy worked and the situation hopefully will return to normal as before.
It was post Brezhnev and pre-Gorbachev time. Glasnost and Perestroika were then unheard. It was Tavareesh(Comrade) Chernenko's era. When I arrived Moscow on a cold freezing day of March in 1984, I couldn't forget the voice of the stewardess of out Aerofloat flight originating from Singapore with New Delhi as stopover.
"Ladies and gentlemen, we have just landed at the Shereyetmevo International Airport. Ground temperature is 10 degrees below zero.Welcome to Moscow."
In our taxi to our hotel, (the Rossia Hotel, just overlooking the Red Square, at that time was reportedly Europe's largest hotel with 3000 rooms), I was complaining to Oleg, the UNIDO guy who fetched me. "Mr. Oleg, but I thought it's already spring as per the aide memoir!" His answer was strikingly remarkable, as it dawned on me that not all people in the USSR were Russians. "Mr. Delid, to the Ukrainians, it's still winter time. To the Muscovites, it's now spring."
We were based in Zaporozhye, a large industrial city in the southwestern part of Ukraine, with Zaporohtahl Iron and Steel Works as our base plant. This was an integrated steel complex with about 20,000 workers. All throughout our 4-month stay however, we traveled far and wide the soviet territory to such cities as Kiev, Krivoi Rog, Zdhanov, and Odessa, all parts of Ukraine and Moscow, Liepitz, Cherepovets, and Leningrad, all parts of Russia. Many of the largest steel mills in the world were found in these cities. In all of these visits, one of the things that stuck to our minds was the abundance of gas and minerals. So abundant that even in our written and verbal reports and informed discussions, we would then report that there was no such thing as energy conservation there. There was no need for it. They had lots of it; excess in fact. And we were not referring only to our usual enercon programs of shutting down lights and airconditioning when not in use. We were talking about energy usages on big and various reheating furnaces, etc.
I bid goodbye to Russia on a warm sunny afternoon in July 1884. But as I looked out of the plane's window, trying to catch a last glimpse of this beautiful city by the river, I could then sense that in not too far future, something big will happen that will transform again this country, something in the scale when the October Revolution of the early 1900 took place. Finally, when all I could see was a blurred vision of the city, I closed my eyes, took a long deep breath, and silently told myself; "Doshbedanya, Russia. Spaseeba. Spaseeba Bolshoi." (Goodbye, Russia. Thank you. thank you very much.")
That was 25 years ago. Now they have split up into two different nations under different leaders. Obviously, they have to split up too these resources. But they are still interconnected with pipelines that stretch far and wide to Europe. Fortunately enough before the dispute erupted into a full blown crisis, diplomacy worked and the situation hopefully will return to normal as before.
Monday, January 26, 2009
Philippine National Standard for Galvanized Products for Roofing
There is now a new director in charge for the Bureau of Product Standards (BPS) in the person of Atty. Victorio Mario A. Dimagiba who came from DTI's Consumer welfare and Protection. He replaced long time BPS Director Eng'r. Jesus L. Motoomull as a result of reshuflling of assignments at DTI.
Last January 21, Atty. Dimagiba convened the industry representatives and technical committee ( TC 64) members for a get-to-know-you session, at the same time discuss the status of the product standard for galvanized steel for roofing application. For a long time now, this standard was not yet settled, hence implementation and enforcement apparently is also on hold.
Last June 28, 2008, the former BPS director already signed the standard recommended by the TC 64 but implementation was put on hold since no implementing rules and regulation (IRR) among others were promulgated.
During the meeting, discussions were again made especially on the issue of total coated thickness (TCT) vs. base metal thickness (BMT), mass of coating and service life on the instance of Steelcorp which persistently endorses the BMT approach , as contained in their recent memo ( dated last week) to the the new director in charge.
As a long time member of the TC 64, this seems to me a repeat of the many and countless instances in the past years that this was tackled and agreed upon by the TC members. Nevertheless, the meeting ended with a positive and promising note as clearly proclaimed by the new director.
The new director wants this product finished, approved, promulgated and implemented in 2 months time. He therefore instructed the TC 64 to immediately convene next week to proceed and finished this long overdue product standard.
Last January 21, Atty. Dimagiba convened the industry representatives and technical committee ( TC 64) members for a get-to-know-you session, at the same time discuss the status of the product standard for galvanized steel for roofing application. For a long time now, this standard was not yet settled, hence implementation and enforcement apparently is also on hold.
Last June 28, 2008, the former BPS director already signed the standard recommended by the TC 64 but implementation was put on hold since no implementing rules and regulation (IRR) among others were promulgated.
During the meeting, discussions were again made especially on the issue of total coated thickness (TCT) vs. base metal thickness (BMT), mass of coating and service life on the instance of Steelcorp which persistently endorses the BMT approach , as contained in their recent memo ( dated last week) to the the new director in charge.
As a long time member of the TC 64, this seems to me a repeat of the many and countless instances in the past years that this was tackled and agreed upon by the TC members. Nevertheless, the meeting ended with a positive and promising note as clearly proclaimed by the new director.
The new director wants this product finished, approved, promulgated and implemented in 2 months time. He therefore instructed the TC 64 to immediately convene next week to proceed and finished this long overdue product standard.
Tuesday, December 9, 2008
Vietnam’s (Steel) Outlook
The 10 million MT local demand was forecast by the government to reach in 2010 but this was already achieved in 2007. The next target is 20 million MT in 2020. Going by their rate of expansion, and barring major and prolonged market crisis, this is very much achievable.
At present, the government has already given a go ahead business permit approval (including the necessary environmental permits and clearances) to 5 big companies to undergo and build integrated iron and steel plants by way of blast furnaces. These are PT Essar and Tata Steel from India, POSCO from Korea and the Tycoon Group from Taiwan. It has likewise given mining permits to develop and extract iron ores in at least 2 different locations identified to have enough reserves of this raw material.
Downstream, all the plants we visited and similarly the others too are poised to go on further expansions. Their sites are ready, their plans are in place but got stalled only by the present global financial crisis. By their own admission however, they are upbeat that there will be turnaround sooner that most expect.
Consider this, just days ago, at the height of the crisis, Ton Nan Kim (which we visited) just bought and put up a company in New York and immediately listed it in the Dow Jones Stock Exchange. This new company now will be their mother company while their plant operation is in Vietnam.
With such optimism, vision, political will, etc., Vietnam indeed will become one of the tiger economies in this part of the world.
At present, the government has already given a go ahead business permit approval (including the necessary environmental permits and clearances) to 5 big companies to undergo and build integrated iron and steel plants by way of blast furnaces. These are PT Essar and Tata Steel from India, POSCO from Korea and the Tycoon Group from Taiwan. It has likewise given mining permits to develop and extract iron ores in at least 2 different locations identified to have enough reserves of this raw material.
Downstream, all the plants we visited and similarly the others too are poised to go on further expansions. Their sites are ready, their plans are in place but got stalled only by the present global financial crisis. By their own admission however, they are upbeat that there will be turnaround sooner that most expect.
Consider this, just days ago, at the height of the crisis, Ton Nan Kim (which we visited) just bought and put up a company in New York and immediately listed it in the Dow Jones Stock Exchange. This new company now will be their mother company while their plant operation is in Vietnam.
With such optimism, vision, political will, etc., Vietnam indeed will become one of the tiger economies in this part of the world.
Friday, December 5, 2008
Philippine Productivity Quality and Safety Foundation (PPQSF)
I attended the PPSQF meeting at the Department of trade and Industry (DTI) Building in Makati yesterday, Dec 4. PPSQF is an NGO with companies and industry association as members whose objective is primarily to uphold productivity, quality and safety in industries and consumer products. Right now it is at the forefront of product standard enforcement , assisting the Bureau of Product Standards and the regional DTI’s in this undertaking. Lately, it has been holding meetings and dialogues among members and stakeholders on the issues and concerns regarding product standard enforcement, i.e., going after sub standard products and their manufacturers and sellers.Yesterday’s meeting focused on GI sheets, steel bars, angle bars, flat glass, and sanitary wares. I was there representing our industry, GI sheets, together with other representatives from other GI sheets manufacturers. Unlike however with the other mentioned products whose concerns were the problems met during monitoring, inspection, and sanctions against erring companies, our industry is not yet on this stage. The reason- GI sheets have no standard yet.
The old standard formulated in 1986 and amended in 1987 (PNS 67) is not anymore applicable and for years now, the Technical Committee (TC) on Flat Steel Products had been trying to come up with a new standard, especially GI sheets for roofing, but until now is unsuccessful in reconciling the different views of the members. The complication arose from the fact that there are now, technically speaking, 3 different types of metallic coated sheets in the market now (generically called GI sheets), namely, the Zinc coated, the 55%Aluminum-zinc (Galvalume and Superlume brands) and the zinc-5% coated products. Each of this product has its own functional characteristic relating to its corrosion and structural integrity performance while in use; commonly called service life. That comparability can not however be yet reconciled; specifically on the minimum mass of coating.
The agreement in the meeting was that, the new BPS Director Atty Vic Dimagiba ( replacing Director Jess Motoomull effective December 1) will reconvene the technical committee where it is hoped that the issue will finally be resolved and a new standard be approved. Pending that, the GI industry, fairly or unfairly is under constant complaint from the public and other groups due to the proliferation of thin sheets with low zinc coating , not only of locally produced materials but also form exports, mainly from China and perhaps Vietnam.
Photo: Stock.Xchng
Wednesday, December 3, 2008
Risk and Threat Analysis in the Steel Industry
We just had our Planning Conference and the theme is "We are in a crisis mode." Everybody is.
Scanning the current steel environment, with the effects of the global financial crisis looming in the domestic front, one may be able to see the major risks and threats which should be strategically addressed.
First is the prolonged global recession which is highly probable to happen. Another is the influx of cheap (and probably low quality) imports as neighboring countries will try to look for export market to unload their inventory surplus, which will surely result in the lowering of prices and making the market highly competitive. Such products have already in fact in the past and current year entered the Philippine market. This will force production to attain highest levels of efficiencies, especially on cost reduction.
On the financial front, bank credit facilities will be tightened putting pressure on working capital and may result in material procurement delays, longer collection periods, etc. Liquidity becomes extremely important and significant. Add to that the possible peso depreciation and we have indeed a scenario of business survival.
Obviously, those that may be able to properly control these risks and threats and convert them into opportunities will surely come out as the winners.
Scanning the current steel environment, with the effects of the global financial crisis looming in the domestic front, one may be able to see the major risks and threats which should be strategically addressed.
First is the prolonged global recession which is highly probable to happen. Another is the influx of cheap (and probably low quality) imports as neighboring countries will try to look for export market to unload their inventory surplus, which will surely result in the lowering of prices and making the market highly competitive. Such products have already in fact in the past and current year entered the Philippine market. This will force production to attain highest levels of efficiencies, especially on cost reduction.
On the financial front, bank credit facilities will be tightened putting pressure on working capital and may result in material procurement delays, longer collection periods, etc. Liquidity becomes extremely important and significant. Add to that the possible peso depreciation and we have indeed a scenario of business survival.
Obviously, those that may be able to properly control these risks and threats and convert them into opportunities will surely come out as the winners.
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