December 05, 2016 at 09:15 pm
Othel V. Campos
Steel companies are investing at least $1 billion in the next five years to modernize the steel sector and generate 161,000 direct and indirect jobs in the country.
Philippine Iron and Steel Institute president Roberto Cola said major players professed their intention to expand capacities while new players committed to invest soon.
Steel Asia Corp. announced the biggest investment of $500 million in three steel plants to support the local production of steel plates, section bars and wire rods, while Chinese miner Nicua Mining Corp. unveiled its plan to diversify into steel manufacturing with a $250-million investment in Leyte.
Capitol Steel Corp., Pag-Asa Steel Works Inc. and other smaller players are sharing in the remaining $250 million.
Cola said the country’s infrastructure was growing faster than the economy and could face supply challenges if construction aggregates like steel were not enough to fill in the required volume.
The Philippines is projected to register significant increase in steel consumption, together with Indonesia and Vietnam, due to their relatively fast-growing economies.
The group said the combined per capita consumption of these three economies comprised about a third of the world’s average per capita consumption of 225 kilograms.
Recent data showed that steel consumption in Asean 6―Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam―registered a 6.3-percent growth to 67 million metric tons in 2014 from 63 million MT in in 2013.
The region’s net importation of around 40 million MT comprised the bulk of the 2014 demand.
The Asean 6 apparent steel consumption is projected to grow 5 percent to 6 percent in the next three years and will hit 80 million MT in 2017.
Asean steel manufacturers are producing similar low-end steel products and are facing stiff competition from other countries, especially China.