SteelAsia Manufacturing Corp. expects the country to save $600 million from wire imports yearly as it started new projects for two wire rod mills involving P25 billion in investments to produce 1 million tons a year.
SteelAsia chairman and chief executive Benjamin Yao said the projects could serve as the platform for the resurgence of the manufacturing industry, especially for steel manufacturing.
“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,” he said.
Wire rods are the raw material for various products including 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.
The company said advanced economies used this steel-based model for industrialization like the US, Europe, Japan, South Korea, Taiwan and China.
The high cost of imported wire rods put many SME manufacturers that need wire rods for their products in a difficulty position, Yao said.
“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,” he said.
SteelAsia is building two mills for its wire rod production with a capacity of 500,000 tons each.
The Visayas plant will serve the requirements of central and southern Philippines and the second plant in Central Luzon will serve customers in Metro Manila and the rest of the Luzon region.
At present, 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 tons a year of output of various steel products.
SteelAsia earmarked over P100 billion in investments in the next five years to quadruple its capacity which would help the country achieve 70-percent steel self-sufficiency from the current 40 percent.