Department of Trade and Industry (DTI) Secretary and Board of Investments (BOI) Chair Ramon Lopez was tasked by President Rodrigo Duterte to monitor and coordinate all government efforts to ensure the timely implementation of investment projects that will install integrated steelmaking capability in the country.
This comes on the heels of a presentation by Secretary Lopez, together with the leading Philippine company Steel Asia Manufacturing Corp. of its on-going five-year, Php105 billion expansion program to President Rodrigo Duterte, of which Php66B had already been registered with the BOI and are in varying degrees of construction, commissioning or full-operation.
Secretary Lopez also briefed the President on the US$4.5B 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: 1) slow permit and licensing processes (e.g., land conversion, environmental permits) and 2) 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.
“The steel industry has been keeping pace with our strong GDP growth. This year, industry forecasts that steel consumption will rise by about 6 percent to around 11.1 million tons. Last year, steel consumption topped 10.5 million tons. Domestic steel demand will continue to remain strong in the coming years due to the President’s ongoing Build, Build, Build program as the country continues to build more roads, bridges as well as modernize, upgrade and expand airports and other infrastructures,” Yao said.
Following his assignment by the President, Secretary Lopez vowed to closely coordinate with all government agencies so that permits and licenses for critical steel projects are issued within 20 days from filing and to intensify DTI’s effort in tracking and weeding-out substandard steel from the market—particularly as these are typically being used in lower-end housing segments. Furthermore, he committed “to bring into fruition, the country’s vision for the Philippine steel industry to achieve a sustainable level of self-sufficiency in steel to support our medium to long term infrastructure and manufacturing objectives.”♦
Date of Release: 22 April 2019