SteelAsia Manufacturing Corp., the country’s largest steel manufacturer, said it started the construction of two wire rod mills with estimated investments of P25 billion that will contribute to the country’s industrialization goal.
The projects will produce a combined 1 million metric tons of wire rods annually that could serve as the platform for the resurgence of the manufacturing industry in the country, the company said.
“At present, the Philippines has zero capacity for wire rods. That means we are importing all our wire rod requirements which have reached 800,000 tons a year and climbing. When operational, this import substitution will save the country around $600 million a year in foreign currency,” said SteelAsia chairman and chief executive Benjamin Yao.
Wire rods are used to manufacture various downstream products like machine parts, springs, cables, welding wires and rods, mesh, nuts and bolts, screws and other fasteners, tools, tire-cord and dozens of others.
Small and medium enterprises producing these items would develop and thrive as a result of a local wire rod supply, and in turn, link their supply to high value manufacturing such as the automotive and machinery sectors.
This steel-based model for industrialization was seen in the US, Europe, Japan and more recently in South Korea, Taiwan and China, SteelAsia said.
Yao said that because of the high cost of imported wire rods, many SME manufacturers that needed wire rods for their products had difficulty competing with the imported version of what they produced.
“Hence, the Philippines has been importing its nuts and bolts, wires or alambre, nails, welding rods, springs and even paper clips, staple wire and many other wire rod-based products while all these can actually be locally produced if only the Philippines had wire rod manufacturing,” Yao said.
SteelAsia is building two mills for its wire rod production with a capacity of 500,000 MT each.
The first one will rise in the Visayas to serve the requirements of central and southern Philippines and the second one will be in Central Luzon to serve customers in Metro Manila and the rest of the Luzon.
SteelAsia has eleven operating plants located across Luzon, Visayas, and Mindanao with various capabilities – upstream, midstream, and downstream steel manufacturing.
It is the country’s biggest steel company with over 2.6 million MT a year of output of various steel products.
SteelAsia earmarked more than P100 billion in investments in the next five years to quadruple its capacity which would help the country achieve 70-percent steel self-sufficiency, up from the current 40 percent.