A Chinese company is hiking investments in the Philippines on top of a $3.5-billion steel project it has committed, eyeing additional phases to this project as well as the establishment of an industrial estate for its partners.
Panhua Group yesterday firmed up an agreement with the Philippine Economic Zone Authority (PEZA) to locate its integrated steel mill in Phividec Industrial Estate in Misamis Oriental, setting aside initial plans to partner with San Miguel Corp. to locate in Malita, Davao del Sur.
Xinghua Li, board chairman and chief executive officer of the Panhua Group, told reporters on the sidelines of the China (Chongqing) Trade and Investment Forum in Pasay City said the company will start construction of the plant in a 300-hectare property as soon as it secures the lease, or by the end of the year.
Xinghua said this was committed to President Duterte in their meeting in Beijing last month.
Xinghua added construction of the plant will take three years and the plant can start production immediately thereafter.
Depending on the outcome of this initial phase, Xinghua said Panhua is ready to pump in “even bigger” investments for the second and third phases.
For phase one alone, Xinghua said Panhua will produce 10 million metric tons of steel, mainly slabs and color-coated galvanized steel.
Xinghua said the project is geared for both the domestic and export markets like Europe, America and Russia.
According to Charito Plaza, PEZA director-general, Panhua is seeking for an exemption from the 30-percent cap that foreign-owned export-oriented companies can sell to the domestic market.
Plaza said Panhua can qualify for a higher proportion as the project will result to import substitution.
Plaza said the company wants to sell 60 percent of its production to the domestic market.
For the initial phase alone, Panhua will employ 20,000 to 30,000 workers.
Xinghua also bared Panhua’s plan to establish the China and Chongqing Industrial Park which will require another 300 hectares.
Plaza said Panhua is looking for a local partner for the project.