SteelAsia sets P80B integration


March 14, 2018

SteelAsia Manufacturing Corp. is embarking on an P80-billion five-year investment program that would fulfill the Philippines’ dream of having a true steel industry.

Benjamin Yao, chairman and chief executive officer of SteelAsia, said the company will integrate its operations to produce steel products replacing billions of pesos worth of imports.

Yao said SteelAsia sees an opportunity presented by strong demand for infrastructure that “in a short period we are going to have our steel industry” which had been originally planned by the country 50 years ago.

Yao sees the advantage of being a last mover as SteelAsia would be able to build the most modern steel mills.

When other countries in the region like Japan, Korea, Taiwan and Singapore have all advanced their steel industries, Yao said the Philippines remains a laggard, relying heavily on imports for everything even for ”a piece of nail.”

SteelAsia’s investment would be the much-needed “catching up” initiative on a “missing link to Industrialization,” according to Yao.

Adrian Cristobal Jr., SteelAsia president, said even as the Philippines is touted as the world’s fourth largest shipbuilder and now being groomed as the next automotive hub, it imports 90 percent  of its steel.

“This is a rare and unique opportunity for us to build an integrated facility. The dream of two generations is possible now. One difference from Iligan (Steel Mills, originally the flagship for integration but failed) , there was just one mill where everything was supposed to have been integrated. SteelAsia has six mills in five locations. Our expansion is in the regions,” said Cristobal.

Yao added the strategic location of SteelAsia’s mills enables the company to deliver to  customers faster and cheaper .

Rafael Hidalgo, SteelAsia chief operating officer, said the first of the three-phase integration involves the establishment of three new steel mills with a combined cost of over P25 billion.

These are for the production of rebars for cables, mesh; sections for beams and sheet files and; wire rods for industrial nuts and bolts, all for infrastructure application.

The wire rod and section mills will be the first in the country but for rebars, SteelAsia has been producing these in its Calaca facility for its own use at 500,000 metric tons per year (MTPY).

A 1.2-million MTPY wire and bar rod facility will rise in Concepcion, Tarlac and another 800,000 MTPY  wire rod and bar mill, the first to go on stream by next year, will be set up in Compostella.

The third, a 500,000-MTPY section mill will be put up in Lemery, Batangas.

Hidalgo said for the rebars alone,  SteelAsia in five years will double its capacity to 4.5 million MTPY for rebars from 2.3 million MTPY.

Demand for wire rods now stands at 600,000 MTPY, wire rods, 600,000 MTPY and sections, 700,000 MTPY.

Hidalgo said the Philippines imports sections from China, Korea, Japan, Taiwan and Thailand and for wire rods, from China. 

The mills will be fed with recycled steel scrap.

“This expansion will have additional three recycling plants to produce billets. There is no need for mining (from) ore. There is enough scrap,” Cristobal said adding the country now exports  1 to 2 million MTPY of scrap per year. (I. Isip)