MANILA, Philippines - The government is pushing for the revival of the steel industry, particularly the mothballed assets of National Steel Corp. in Mindanao, to support its aggressive infrastructure program.
“We’re looking into the revival of National Steel but we have to get to the financial hurdles. We need the cooperation of the banks,” said Ramon Jacinto, presidential adviser on economic affairs and information technology communication.
“We cannot do it without foreign investment because we need the technology. The money, maybe, we can raise here through the banks, but the technology, there has to be a foreign investor that has the technology and stake in the steel mill. Otherwise, they will simply build it and just leave it,” he added.
Jacinto said a Korean company is now doing a feasibility study on reviving the National Steel Corp. in Iligan City.
“It’s up to the studies, if it makes sense to revive National Steel, fine. If it does not, then we put up another one. We are also looking at new sites,” he said.
“The important thing is, we have to build a steel mill already while the president is in power because the other presidents don’t realize it. Its only him,” Jacinto said.
Jacinto, whose father is considered as the father of the local steel industry with the establishment of Jacinto Steel in 1958, said the revitalization of the country’s steel sector would bode well on the government’s golden age of infrastructure undertaking.
He said construction of a greenfield integrated steel mill would likely cost between $3 billion to $5 billion, depending on the capacity.
Reviving National Steel in Iligan would be cheaper given the existing facilities there.
“What you save in National Steel is in infrastructure because it is already there. The ports are also there. For a new location, meanwhile, the benefit is you can lay it out the way you want to for a more efficient layout,” Jacinto said.
At present, he said the country’s steel demand is at 10.5 million tons annually, while steel manufactured locally is only at two million tons.
“Some people will say, why are you building your own steel mill when it’s cheaper to buy steel from China? That was the reason in the 1960s which is why this is where we are now. If that’s your reasoning, then why should we plant rice here if it’s cheaper to import from Thailand?” Jacinto said.
“Steel is the rice of industry. Even if it’s cheaper to import, we should have our own. It’s a matter of national will and national interest,” he added.
Jacinto said the country should look and take lessons from countries that have successful steel industries. He suggested the industry should have tariff protection for an initial period of about 10 years until it matures.
The Duterte administration has recently unveiled a three-year rolling infrastructure program amounting to P3.6 trillion from 2018 to 2020 to usher in what is touted as the country’s golden age of infrastructure.