Chinese conglomerate Panhua Group signed an agreement with the Philippine Economic Zone Authority to put up a $3.5-billion integrated steel plant in the Philippines.
Peza deputy director general Theo Panga said the proposal was one of the agreements reached during the recent Philippine investment mission to Chongqing and Zhangjiagang, China.
Panga said the proposed steel plant was a modern facility capable of producing 10 different product lines of various applications, complete with a modern port and a 300-hectare industrial park.
“This is courtesy of Panhua group, a high technology private enterprise with diversified business interests. It is the number one steel sheet and steel coating manufacturer in China,” he said.
Peza said the project was a welcome development for the Philippines and would put a stop on steel importation.
It noted the project’s strategic importance and the government’s role to provide all the support for Panhua’s big-ticket project and other pioneering industries “to ensure the continued growth of the local manufacturing sector and to sustain the Philippine status as one of the fastest growing economies in the world.”
“We can further stimulate domestic manufacturing and accelerate our industrialization if we attract foreign direct investment that will put up basic industries in the country such as integrated steel, petrochemical, and mineral processing,” Panga said.
“Since the Philippines is regarded as the fifth mineralized country in the world, we can capitalize on our rich mineral resources to be processed in the country to encourage the establishment of basic industries and promote higher value-added production,” he said.
Having an integrated steel mill would bring about the growth of several big and small scale industries as well as the supporting power, transport and communication facilities, he added.
“This is what we badly need in the country to propel our economic/social progress and to enhance our competitiveness as an FDI destination. This pioneering activity will surely make the Philippines a strong supply base for car assemblers, shipbuilders and other ecozone export/domestic producers particularly in the electronics, aviation and machinery/metal fabrication sectors,” Panga said.
Domestic demand for steel has risen to 10 million tons annually, making the Philippines the 17th biggest importer in the world.
The country’s growing need for more and better infrastructure under the Build, Build, Build program is expected to further increase the demand for steel, PEZA said.
“The country’s industrialization level may be lagging behind our Asean neighbors, but the current administration is determined to elevate Philippine status as a newly industrialized/middle-income economy by the end of the current administration’s term,” Panga said.