By Bernie Cahiles-Magkilat
President Rodrigo Duterte has ordered Department of Trade and Industry (DTI) Secretary and Board of Investments (BOI) Chair Ramon M. Lopez to monitor and coordinate all government efforts to ensure the timely implementation of steel projects and the proposed integrated steelmaking facility in the country.
The directive comes on the heels of a presentation by Secretary Lopez, together with the country’s leading steel manufacturer Steel Asia Manufacturing Corp. of its ongoing five-year P105-billion expansion program to President Rodrigo Duterte, of which P66 billion had already been registered with the BOI and are in varying degrees of construction, commissioning or full-operation.
Lopez also briefed the President on the $4.5 billion steelmaking project of the world’s second largest steel company, Hebei Steel of China (HBIS), which will operate the first integrated iron and steel in the Philippines. It plans to set up a production facility that will begin with iron ore and produce major intermediate steel products like billets and slabs, which are all currently imported. Steel Asia will also tie-up with the incoming steel manufacturer.
“With the expansion of Steel Asia, jobs in the steel industry are expected to double from the present 10,500 personnel to around 21,000. Job multipliers in support industries will also result in creating 52,500 more jobs, doubling the support industries job output to around 126,000. Once the HBIS integrated steel facility becomes operational along with the revival of the flat segment, steel industry jobs and its related industries could also potentially double up to 300,000 personnel,” said Steel Asia President Benjamin Yao.
Highlighting the impact of steelmaking on job generation, value creation, and reduction of import dependence, President Duterte assured investors that government will address the two issues raised: Slow permit and licensing processes (e.g., land conversion, environmental permits); and absence of level playing field because of sub-standard imported and locally-manufactured steel.
The country currently relies mainly on imports for both flat and long steel products, except for rebars which it produces from imported billets. Steel Asia briefed the President that its expansion program will allow the country to convert scrap steel into various long products including angles, sections and wire rods that eventually are converted by downstream manufacturers into products such as welding rods, roofing, tools, springs, fasteners (screws and nails), and industrial steel structures (eg H-beams, I-beams) — all of which are currently mostly imported. Steel Asia also shared that it is set to start construction next month on one of its plants that will have the capacity to produce structural steel needed for, among others, building and infrastructure construction, electric tower and telecoms transmission, and piling for piers and reclamations.
On the other hand, its partnership with Hebei Steel will allow the country to produce flat products that are needed to spur the development of the automotive, appliance making and shipbuilding sectors among others. The steel slabs that will be produced locally will be the inputs to many small and medium enterprises into steel works that will produce the finished products.