Benjie Yao sees opportunity in steel, plans P25B investment in 3 Steel Asia plants
The country?s largest steel producer, Steel Asia Manufacturing Corp., is investing $500 million, or about P25 billion, for three integrated steel facilities in Luzon and Visayas.
In a media briefing Tuesday, Steel Asia Chairman and Chief Executive Officer Benjamin Yao said the investment was part of the P80-billion expansion plan of the company in a span of six years for the production of steel products not manufactured in the local market.
?The opportunity today, there?s strong demand with infrastructure coming up. There?s market, there?s opportunity in short period of time to have our own steel industry,? Yao told reporters.
Yao said Steel Asia is partnering with Japanese and Italian companies for its six-year business expansion plan in the country.
He said the country?s steel industry has remained laggard in the region after the National Steel Corp. in Iligan City failed and zero investments for integrated steel mills in the past years.
The Philippines only produced reinforcement steel or rebars through Steel Asia, which is also the largest rebar manufacturer in Southeast Asia.
Steel Asia Vice President Rafael Hidalgo said $150 million was being invested in its plant in Concepcion, Tarlac, another $150 million is for the facility in Compostela, Cebu, and $200 million for the mill in Lemery, Batangas.
?These are three integrated mills which will make its own steel and then convert it into steel products, which include two products which are currently not produced in the Philippines … will be the first of its kind here in the Philippines,? said Hidalgo.
Hidalgo said the Concepcion, Tarlac plant would churn out 1.2 million tons of wire rods annually, while the Compostela, Cebu facility would have an annual production of 800,000 tons of wire rods and rebars, and the Lemery, Batangas integrated steel mill would manufacture 500,000 tons of sections per year.
The Cebu plant would commence its operation by 2019, followed by Tarlac and Lemery facilities in 2020.
The executive said Steel Asia would supply the annual demand in the local market of 4.5 million tons for rebars, 600,000 tons for wire rods, and 700,000 tons for sections.
As an integrated steel mill, the three plants will have their own scrap recycling facilities that will convert the scrap — as a raw material — to billet, and the billet as raw material for sections and wire rods.
Hidalgo said some 1 million to 2 million tons of scraps were going out of the country, mostly to China, and being converted into billets, blooms, and slabs — which are raw materials for midstream steel products such as rebars, angle, sections, wire rods, hot rolled coil, and plate — and imported back to the Philippines.
Currently, Steel Asia imports 80 percent of its billets.
Hidalgo said that once the three integrated plants become operational, the company is seen to be 60 percent self-sufficient for billets. (PNA)