SteelAsia Manufacturing Corp. is investing P80 billion on an integrated steel expansion program spanning three phases in over six years.
The first phase will cost about P25 billion to finance the construction of three greenfield plants, said SteelAsia chief executive Benjamin Yao.
“We see stronger demand due to more infrastructure projects in the public and private sectors. We expand because there is market. There is opportunity for us to have our own steel industry in a short span of time,” Yao said in a news briefing in Makati City Tuesday.
He said the company would invest in steel products not yet produced in the Philippines.
The first plant is a 1.2-million-metric-ton wire and rod mill in Concepcion, Tarlac that will cost P7.5 billion, while the second project is a P7.5-billion wire and rod plant in Compostela, Cebu with a capacity of 800,000 MT annually.
A third plant―the P10 billion section mill in Lemery, Batangas―will have the capacity to supply 500,000 MT of sections bars.
The three plants are expected to go onstream in three years or by 2020 and generate 3,000 full-time jobs.
SteelAsia vice president for corporate development Rafael Hidalgo said most of the downstream products that SteelAsia planned to produce would support the booming construction sector.
“However, wire rod which is an industrial product, is used to make nuts and bolts, springs, welding rods, screens and mesh wire, to cite a few. These products, we still import from abroad, even the tiniest nail. We need to have the technology to produce these products so we could level up our industrialization,” Hidalgo said.
The country imports $2 billion worth of wire rods, section bars and billets annually, representing 60 percent of national demand of 7 million MT. Imported section bars reach 700,000 MT while imported wire rods average 600,000 MT a year.
SteelAsia said once the three-phase program was completed, its total capacity would reach 7 million MT of finished steel products and 4.3 million MT of billets for steel making, double the current 2.3 million MT.
It said that in the medium term, it would stop selling steel scraps abroad and reuse them locally to produce billets for steel making.
The Philippines exports about 2 million MT of steel scraps abroad, while SteelAsia needs at least 3 million MT of billets as raw materials for steel making.