Steel Asia Manufacturing Corp. and the Development Bank of the Philippines (DBP) have signed a P5.7- billion loan deal to fund the construction of the country’s largest and most modern steel mill.
When completed, the steel mill located in Barangay Poblacion in Compostela in Cebu will have a production capacity of 800,000 metric tons a year. It will create 500 direct and 2,500 indirect jobs once fully operational.
Steel Asia president Benjamin Yao said the mill “will have the best-in-class manufacturing cost efficiencies and lower the cost of steel”.
He said this will spread Steel Asia’s capacity to different regions, giving builders the benefits of localized product availability, lower logistics cost and a faster response time.
Yao added the new steel mill would also finally allow the Philippines to produce other steel products like wire rods, not just reinforced steel bars.
“Among the countries in our geographic region, the Philippines is the only one without wire rod production. Hence, it’s very difficult for small manufacturers to survive and thrive,” he said.
A wire rod is a hot-rolled wire made by drawing hot metal through shafts. It is used to manufacture nuts and bolts, steel mesh, welding rods, bearings, chains, fasteners, wires and nails. It is found in home items such as umbrellas, steel hangers and bicycle spokes.
Steel Asia is currently expanding to integrate upstream with an additional 1.7 million tons of steelmaking, and 3 million tons of rolling mills producing rebar and import substitute products such as beams, channels, wire rods and merchant bars.
Its six steel mills – three in Luzon, one in Cebu and two in Mindanao – supply the country with some 2 million tons of rebars annually.