SteelAsia CEO asks govt to ban induction furnace

SteelAsia Manufacturing Corp., the country’s largest reinforcing bar producer, asked the Trade Department to impose strict standards on steel manufacturing technologies such as the controversial induction furnace which was banned in China.

SteelAsia president and chief executive Benjamin Yao, the country’s representative in the prestigious World Entrepreneur of The Year Awards in June 2020, made the comment in response to reports that the agency would study the new insights on the steel-making industry after the Philippine Induction Smelting Industry Association presented a position in favor of induction furnace.

Induction furnace involves electromagnetic induction to heat and melt iron, steel, copper, aluminum and other metals.  SteelAsia, on the other hand, uses modern rolling mills for rebar production.

Yao said that if the government would continue to make everybody “happy”, it would not help good technology to survive.

“I hope BOI [Board of Investments] will not take a stand to try to make everybody happy. I hope they will be proactive in that. They should be. Reports showed that the number of induction furnace operators were increasing,” Yao said in a lunch briefing in Bonifacio Global City, Taguig.

Yao said the Trade Department should seriously consider imposing a ban on induction furnace not only for the lack of standards in producing steel products, but also for the risks to consumers using substandard rebars.

SteelAsia chief operating officer Rafael Hidalgo said there were induction furnace companies operating in the Philippines.

Induction furnace technologies produce 1 million metric tons of the total local steel requirement of 11 million MT. Two more such plants are under construction in Misamis Occidental and Davao.

“The government has all the facts. They don’t need more facts. They know what’s being done by induction furnace, and they know what’s bad about it. The government know who they are and what their violations are. It’s just up to them to act on it. We, as private entities, don’t need to tell them more,” Hidalgo said.

Yao said many operators of induction furnace were clever entrepreneurs who knew the trade secret in putting up a steel mill without any investments.

“We don’t stand a chance against substandard steel. These IF technology which was banned in China and found their way here, are mostly 10-percent to 20-percent underweight. In the provinces where they land, hardware stores have no idea what is standard or substandard, so how can we compete with them,” he said.

The Philippines welcomed the entry of Chinese steel induction furnaces despite its heavy contribution to China’s battle against air pollution.

The Environment Department committed to look into the operations of five steel mills which were said to be using induction furnace to produce rebars.

The ASEAN Iron and Steel Council earlier called for the ban of induction furnace in the region.

Benjamin Co of Wan Chiong Steel Corp. earlier claimed that China did not ban the use of induction furnace but issues of overcapacity and regulatory concerns were among the factors why the induction furnaces were shut down.

Most of closed induction furnaces found their way to the Philippines which became a concern for local steel manufacturers. Co said the equipment from these closed IF plants in China could not be used in the Philippines because they were not compatible with the existing power infrastructure.  Philippine power lines require 60 hertz of frequency while China power lines require 50 hertz.

Trade undersecretary for consumer protection Ruth Castelo said the new insights about induction furnace would be studied and validated by the Trade Department.  “The department, as with all industries, is committed in studying the steel-making industry, including all technologies at hand,” she said.

Topics: SteelAsia Manufacturing Corp. , Department of Trade and Industry , DTI , induction furnace
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