SteelAsia Manufacturing Corp., the largest reinforced steel bar maker in the Philippines and Southeast Asia, offered to acquire National Steel Corp. in Iligan City from the government and convert it into a state-of-the-art steel manufacturing complex.
SteelAsia president Benjamin Yao said the plan was to produce and deliver quality steel products to meet the rising local demand from a growing infrastructure sector of a fast-industrializing country.
“This will be a major step towards the development of a long overdue local steel industry which will generate new businesses and strengthen existing ones like the automotive industry, shipbuilding and repair, construction, and infrastructure that in turn will boost countryside growth and create more jobs,” said Yao.
SteelAsia plans to put up a modern and environment-friendly factory in Iligan, producing steel products such as plates, beams, billets, slabs and sheet piles which are all currently imported.
Ma. Lourdes Rebueno, general manager of state-owned National Development Co., said it received a proposal from SteelAsia about its plan to negotiate with all valid claimants of National Steel, including the government, for an asset-purchase arrangement.
The Iligan City government recently took over the assets of National Steel for tax deficiency reportedly amounting to P5 billion.
Yao said if the arrangement pushed through, the Iligan facility would become SteelAsia’s seventh steelworks unit. Its six steelworks, located in key growth regions throughout the country, are all operating at full capacity.
“We grew exponentially in the past ten years, starting with a production capacity of 450,000 metric tons in 2006 to 2.7 million metric tons in 2016 for rebars and billets. We are putting up new ones in the next two years to bring up our capacity to 5 million metric tons, which will be 60 percent of total annual demand,” Yao said.
The unrestrained growth came from plants it put up in Davao City and Meycauayan and from acquiring mothballed or existing plants in Carcar, Cebu; Calaca, Batangas; and Phividec, Misamis Oriental.
Yao said all these acquisitions were all fully paid as of last year.
“We have the expertise and the balance sheet to take over Iligan and re-start our quest for a steel industry that will serve as the backbone of our industrialization,” Yao said.
The company announced the full settlement of its P5.45-billion financial obligations for the Davao, Batangas and Cebu mills.
The mills were mothballed assets rehabilitated by SteelAsia to complement its overall production capacity.
SteelAsia’s expansion will address requirements for rebar, wire rods, small and medium sections and steel plates.
The total production capacity for all finished steel products in the Philippines is estimated to hit 11 million tons, enough to satisfy the demand until 2025.
“We see continuing growth in demand in the coming years that is why we need to expand. The Iligan plant will be a strategic maneuver for us as a company and the country as well in terms of industrialization,” Yao said.