STEEL Asia Manufacturing Corp. will no longer be acquiring National Steel Corp. (NSC) due to bureaucratic issues in the negotiation of the shuttered steel-making facility, opting instead to build their own facilities.
In an interview with reporters, Steel Asia Vice President Roberto M. Cola affirmed it is letting go of previous plans to buy National Development Corp.’s (NDC) National Steel for its infrastructure.
“We won’t be pursuing NSC anymore,” Cola said. “We wanted that for the infrastructure already there because it was going to be easier to build a new steel mill there, what with the port and the industrial provisions.”
The company executive cited a breakdown in negotiations especially with the local government officials in Iligan, who wanted to become part owners of the company after it is acquired by Steel Asia.
According to Cola, Steel Asia offered acquisition terms that included payment of the National Steel’s real-property back taxes amounting to some P4 billion, a settlement with the National Power Corp. for payment on past power consumption and rent payment for the land (based on a compromise on valuation).
Talks on the purchase of NSC included a number of parties, including banks, NDC under the Department of Trade and Industry, Global Steel and other NSC claimants.
NSC has had a checkered history, going through several privatization efforts through almost six decades since its creation in the 1950s.
With the discussions seen to be too difficult for an industry supplying a main construction material for the country’s infrastructure drive, we decided to look elsewhere to build a $-1 billion steel-making facility, according to Cola.
“We’re looking at another site, possibly Batangas or Subic,” he added.
Cola said that facility will include a scrap-based electric-arc furnace with a capacity of 0.5 million metric tons to produce beam blanks, slabs and billets. A rolling mill will also be installed to produce sections, rebars and plates.
He added that Steel Asia is in talks with Italian and Japanese investors for joint ventures in the minimills for the production of sections and plates. Steel Asia will produce the rebars themselves.
The firm will be conducting an ocular visit next week on possible sites, as well as finalizing a memorandum of understanding with a yet-unnamed foreign investor.