STEEL PRODUCTION. Trade Secretary Alfredo Pascual (left) visits the SteelAsia Manufacturing Corp.'s plant in Compostela, Cebu on May 23, 2024. SteelAsia is investing PHP65 billion for four new plants in the next three to four years. (PNA photo by Kris M. Crismundo)
COMPOSTELA, Cebu – SteelAsia Manufacturing Corp., the country’s largest steelmaker, will invest PHP65 billion to build four new production facilities in Luzon and Mindanao, creating 3,000 direct jobs within the next three to four years.
SteelAsia chair and chief executive officer Benjamin Yao said in a recent briefing here that the company is building a significant part of the steel industry to supply at least 70 percent of the local demand.
Currently, 86 percent of the country’s steel needs are imported mostly from Vietnam, with SteelAsia only making reinforcement bars (rebars).
SteelAsia’s upcoming facilities will produce steel products that are not yet being manufactured in the country, such as H-beams, I-beams, wire rods, sheet piles, and billets.
“It’s never too late. We will catch up in the next three years,” Yao said.
Doubling capacity
SteelAsia senior vice president for business development Rafael Hidalgo disclosed that the four new plants will be in Candelaria in Quezon Province and Davao, and two in Concepcion, Tarlac.
Hidalgo said the Candelaria plant will manufacture heavy sections like H-beams and I-beams with a rolling capacity of 750,000 metric tons (MT).
The Davao Meltshop will be manufacturing 500,000 MT of billets, a semi-finished material used in steel production.
Both facilities are targeted for commissioning by 2026.
The two production lines in Concepcion will increase SteelAsia’s rebar output by another 1.2 million MT and will manufacture 500,000 MT of wire rod, with operations being eyed in 2027.
Earlier, SteelAsia announced investing PHP18 billion for its Lemery, Batangas plant with 500,000 MT production capacity of medium section steel products, which is set for commissioning by end of next year.
These new plants coming online will increase SteelAsia’s current capacity of 3 million MT to nearly 6 million MT, adding 2.95 million MT.
“With this, we will have 70 percent self-sufficiency in steel. I think, we can say that we’ll have a steel industry already,” Hidalgo said.
Hidalgo added that the country has missed a lot of economic opportunities for not having the supply chain here.
“We have to import 66 percent of our good steel requirements or billets. The Philippines has zero production of sections as of today, zero production of wire rod and we import 800,000 tons of wire rod every year. We have zero production in plate, when the National Steel Corp. (NSC) closed down. Zero production of hot roll coil also, which NSC used to produce,” he said.
“Because we don’t have these, we do not have the downstream industry. We do not have machinery parts, defense equipment, wires. We import our welding rods today. We do have so much welders, but we don’t have welding rods,” he added.
He cited that 92 percent of the country’s roofing demand is imported. Steel cables, pipes, gas cylinders, appliance body, and even the smaller one like springs as well as spoons and forks are outsourced.
“We are import dependent,” Hidalgo said. “But as what my boss said, it’s not too late. All we have to do is build a significant part of the steel industry in the next three to four years.”
Gov’t support
SteelAsia’s executives presented their PHP65-billion investment plan to Department of Trade and Industry (DTI) Secretary Alfredo Pascual who visited SteelAsia’s production line here.
Pascual welcomed the investment plan, calling it an import substitute strategy, supporting the Tatak Pinoy (Proudly Filipino) Act.
While SteelAsia is looking for foreign investors to partner for the establishment of these new plants, Pascual said these projects are attractive to foreign players.
“Here, we know that there is a market already,” he said.
“This is something that we will truly support… The government will provide the enabling environment for the private sector, the incentives, financing through government financial institutions. The private sector, the entrepreneurs do the projects,” the trade chief said. (PNA)
