Steel Asia allots P24B to double capacity by 2019 Richmond S. Mercurio

MANILA, Philippines - Steel Asia Manufacturing Corp., the country’s largest steel manufacturer, is earmarking as much as P24 billion to more than double its production capacity by 2019.

In an interview, Steel Asia chief operating officer Rafael Hidalgo said the company is planning to put up four new manufacturing facilities in the country over the next four years which would increase its production capacity to more than 4.7 million tons from the current capacity of 2.1 million tons.

Of the P24 billion, P19 billion would go to the construction of three new plants –  P6.5 billion steel plant in Plaridel, Bulacan; P6 billion manufacturing facility in Carmen, Cebu; and P6.7-billion plant in Calaca, Batangas.

Together, the three facilities are expected to boost Steel Asia’s capacity by another 2.6 million tons in three years’ time.

“We’re anticipating that in the next two t three years, we will need these mills. Otherwise, there may be a shortage,” Hidalgo said.“Demand is growing faster than our growth. The problem with shortage is not only prices go up, but you have to import. When you import, the number one exporter of steel to the Philippines is China. You can’t hold China accountable for quality unlike us which is rooted here in the Philippines. If you have problem with quality, safety, and environment, then you close us down,” he added.

Steel Asia’s Bulacan steel plant, which is expected to be the biggest in the country, is targeted for completion next year.

Hidalgo said the company remains confident the facility would be completed as scheduled despite certain delays in securing the Department of Environment and Natural Resources’ environmental clearance certificate (ECC).

“We don’t see any problem securing the ECC permit because this will be our most advanced and we have the track record already. This will be our seventh mill. There is no reason for it not to be approved,” Hidalgo said.

Steel Asia’s planned steel mills in Cebu and Batangas, meanwhile, are targeted for completion by 2017 and 2018, respectively.

Hidalgo said the company is also eyeing to put up another manufacturing facility in Region IV-A, estimated to cost about P3 billion to P5 billion.

He said the project is still “in the concept stage” but it is initially targeted to have a production capacity of 500,000 tons.  It is slated to be operational by 2019.

Hidalgo said the four plants would be sufficient to serve the growing local demand for steel rebar until 2020.

“After 2020, then we might need to reassess once more. But if it’s for 2020, we have to review it three or four years earlier to see if we need more. Gestation period for a steel mill project is three years and that is fast already,” he said.

Steel Asia, owned by the Yao and Go families, has been manufacturing rebars for the past 50 years and has now become the country’s largest steel company.

It currently has operating plants in Cagayan de Oro, Davao, Cebu, Batangas, and two in Bulacan.