Reviving the National Steel Corp. (NSC) would be a messy affair for the government to undertake, industry sources opposed to the move said on Thursday.
They said National Steel is saddled with “billions of pesos worth of debt” from a group of creditors led by the Philippine National Bank (PNB) and the local government of Iligan City, where the company used to operate.
The source did not reveal how much National Steel actually owes its creditor banks.
On Wednesday, President Ferdinand Marcos Jr. said he supports the revival of National Steel as the steel maker has a “crucial role in propelling the country’s industrialization.”
There are ongoing discussions with local and foreign groups interested in reviving National Steel, but Marcos did not disclose further details.
The plan to revive National Steel was proposed by the Regional Development
Council of Northern Mindanao during a forum in December, a statement released by Malacañang on Wednesday said.
Philippine Iron and Steel Institute (PISI) President Ronald Magsajo said steel is an indispensable material essential to industrialization and the development of a modern society.
“Any and all policy initiatives to strengthen, promote and revive the Philippine steel industry are welcomed and encouraged,” Magsajo said.
The government still has an interest in National Steel, which is an affiliate of the state-owned and -controlled investment arm National Development Co.
National Steel was incorporated in 1974 out of the assets transferred from Iligan Integrated Steel Mills Inc., which was organized in 1962 with equity funding from the Jacinto Group, and the government in a bid to build an integrated steel mill, PISI said.
Initially intended as a government-owned enterprise, National Steel was later privatized, but struggled with financial difficulties and eventually closed down in 1999.
Roberto Cola, former PISI president, said that at one point, National Steel was the Philippines’ largest steel mill. It produced hot-rolled and cold-rolled coils, tin plates and billets,
If revived, investors will be attracted to own National Steel because of its deep-water port that forms part of its 500-hectare property in Iligan City, Cola said.
The facilities were designed to produce flat iron for the construction industry, such as hot-rolled and cold-rolled coils. These steel products are currently not being manufactured in the country, Cola said.
Another industry leader, however, said it will not be wise to sell the facility in piecemeal but “as a whole.”
Court documents show the Securities and Exchange Commission placed National steel under liquidation in October 2000.
In 2003, the Ispat Group of India’s subsidiary Global Steel Philippines took over National Steel’s Iligan facilities, PISI said.
Global Steel was able to make a P1-billion down payment but failed to resuscitate the company until the assets were placed in a special purpose vehicle.
A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk.
Danilo Concepcion, the National Steel liquidator, did not reply to queries by this paper as of press time.
