CEBU CITY -- The country's largest steelmaking company SteelAsia Philippines said that it still needs more than P65 billion in additional investments to build other mills and expand operations nationwide.
SteelAsia Senior Vice President (SVP) for Business Development Rafael Hidalgo presented to Trade Secretary Alfredo Pascual their expansion plans for the next three to four years, including the rebar and wire rod mills in Concepcion, Tarlac; heavy sections mill in Candelaria, Quezon; steel making plant in Davao City; and the medium sections mill in Lemery, Batangas.
The mills in Lemery and Candelaria are expected to create new product lines for steel such as high beams (h-beams), sheet piles, and wire rods, which will be for sale in the local market.
"When this mill is running in Lemery, we will no longer need to import from Vietnam, we will produce it in the Philippines, and create employment," Hidalgo said in his presentation during a press conference at the SteelAsia Compostela mill on May 24.
Last April, SteelAsia secured P8.3 billion loans to complete the financing for its P18 billion-Lemery steel sections plant from the Government Service Insurance System (GSIS), Development Bank of the Philippines (DBP), and the Philippine Business Bank (PBB).
Meanwhile, the DBP loaned P5.7 billion to the firm for the Compostela rebar rolling mill, costing P10 billion overall, which opened in October last year and can process around one million tons of rebars per year. The project has been registered with the Board of Investments (BOI).
When the Lemery, Candelaria, and Concepcion mills start operations, Hidalgo said it might generate a total of 18,000 jobs, 3,000 of these would be for the company's internal positions, while 15,000 workers will be hired externally, specially for logistics activities.
These new mills will also make the Philippines 70 percent self-sufficIent in the whole steel supply chain compared to only filling 40 percent of steel needs, all of which are currently for rebars, remarked Hidalgo.
"Development will spread outside of the Philippines. Today, it's mostly centered in Cebu, Davao, and Metro Manila, but it won't stay that way forever. The Philippines will grow regionally. Always when you talk about steel, it's long term. We have to anticipate growth from the regions in the Philippines," said Hidalgo when asked why they chose to expand to the provinces.
In terms of potential foreign investors, SteelAsia Chairman and Chief Executive Officer (CEO) Benjamin Yao said they cannot disclose details on it yet, but "its a no brainer for them to invest in a market [and] we have the market."
Currently, the demand for steel is 11 million tons (and a market value of around P440 billion), with demand for rebar accounting for 4.4 million tons. SteelAsia is expecting growth this year to be around six percent, said Hidalgo.
"By 2027, the market should be in the vicinity of around 15 million tons. We'll have around six million tons of capacity," he added.