Steel Asia mulls IPO

MANILA, Philippines – The country’s largest steel manufacturer is setting its sights on a public listing soon to support funding needed for the P24-billion worth of projects it has lined up over the next four years.

In an interview, Steel Asia Manufacturing Corp. chief operating officer Rafael Hidalgo told The STAR the company owned by the Yao and Go families is bound to conduct an initial public offering (IPO) in the near term to raise funds for the steel plants it will be constructing in the country.

“Eventually we will. That’s the direction we’re heading. Because we’re growing, of course it requires a lot of capital,” Hidalgo said when asked about the possibility of listing in the local bourse.

Steel Asia has earmarked as much as P24 billion to more than double its production capacity to more than 4.7 million tons by 2019.

Three plants costing a total of P19 billion will be constructed in Bulacan, Cebu, and Batangas and are eyed for completion by 2016, 2017, and 2018, respectively.

Meanwhile, another manufacturing facility with an investment requirement of about P3 billion to P5 billion is seen rising within Region IV-A by 2019.

“For now, we know that we should be considering it. We should be talking about it in the near term because this is a window of growth right now,” Hidalgo said.

Steel Asia has already poured in P11 billion worth of investments to put up plants in Cagayan de Oro, Davao, Cebu, Batangas, and two in Bulacan.

Together, these facilities are capable of producing 2.1 million tons of steel annually.

Hidalgo said the firm’s investments in recent years have been funded by a combination of equity and loans.

“We have been able to get the support by both local and foreign banks for our projects,” he said.

Hidalgo said the country is currently in the early stage of economic development with a low per capita steel consumption.

He, however, said the country would need more steel as demand is expected to pick up over the next ten years.

Steel Asia has been manufacturing rebars for the past 50 years and has now become the country’s largest steel company.