DAVAO CITY—A few more steel brushstrokes and the touted first integrated steel mill in the country will soon rise in the largest industrial estate in Mindanao, the administrator of the Philippine Veterans Industrial Estate Corp. (Phividec) in Misamis Oriental revealed.
Phividec Industrial Authority Administrator Franklin Quijano announced in July that the steel mill “shall stand on the property for lease with option-to-purchase awarded to Simple Homes Development Inc., a subsidiary of A Brown Co. Inc. (ABCI), a publicly listed company with major investments in real estate, power generation, agriculture and mining.”
He said China’s Huili Fund teamed up with the CISDI Group Co. and Philippine-owned Simple Homes Development Inc. for the project. The CISDI Group Co. is a subsidiary of China Metallurgical Group Corp.
Construction will start as soon as the parties, which include the Phividec-Industrial Estate Misamis Oriental-Special Economic Zone (PIEMO-SEZ), were expected to finalize the formulation of the memorandum of agreement, registration agreement and the contract of lease.
The target was “very soon,” an insider into the formulation of the agreement told the BusinessMirror this week.
It was the governing board of Phividec Industrial Authority which approved on July 27 this year the proposal of the Huili Group to establish the integrated steel mill.
“This means that the owners of the project would now be able to enter into an agreement with PIEMO-SEZ and to establish the project,” the Phividec insider said.
Quijano said the integrated steel mill would cost around $4.9 billion inside the 400-hectare land area. The operation would produce an approximate 5 million tons per annum of flat products such as steel plates, and long products such as billets, round bars and wires.
He said the project would commence upon signing of the agreements, which was projected to have taken place in the early part of July.
“Realizing the vision of President Rodrigo R. Duterte, this investment paves the way for the country to have a globally competitive iron and steel industry,” he said.
He said the integrated steel mill “is a tremendous contribution to the ‘Build, Build, Build’ program of the national government, as we cannot build a country without steel.”
“The world is shrinking but we are expanding with the introduction of the integrated steel mill,” Quijano added.
Job generation
The integrated steel mill is expected to make a significant contribution to employment generation and economic growth not only in Northern Mindanao but also nationwide, he said. The construction phase alone would generate between 10,000 and 30,000 jobs, while regular operations would require some 3,000 employees.
“This investment also provides employment opportunities for our kababayans under the Balik-Probinsya program,” Quijano added.
Industrialization
When it was being planned, the steel mill had provided one of the promising prospects for decentralizing industrial operations away from Metro Manila and Cebu and only recently, a likely enticing ingredient in the Balik-Probinsya program.
In the last quarter of 2019, Quijano also organized the first national Industrial Summit in Cagayan de Oro City, which leading industrialists and tycoons participated in to craft the country’s road to industrialization.
Among the key participants were the chief executives of a steel processor and a food and beverage giant, which has several subsidiaries already located in the Phividec area.
“This southern Philippine island has always been an attractive place to investors. This is due to its natural resource potential, suitable geographical location, favorable climate, among others,” Quijano said in describing the contribution of Mindanao to help decentralize the national capital and the manufacturing centers around it.
To recall, he emphasized, “Iligan City was once called in the 1970s-1990s as the Industrialized City of the South until the global crisis struck our economy in the late mid-’90s.” In the heart of the city was the once booming National Steel Corp., the backbone of the steel industry in the country, and along its corridor going to Cagayan de Oro City are about three cement factories, a chemical company, a flour mill and other industrial complexes.
There are more than 60 companies and factories at the PIEMO-SEZ. “This does not include more than 100 service providers registered with the Phividec Industrial Authority as service enterprises,” the BusinessMirror insider said.
Notwithstanding the Covid-19 pandemic, many companies and factories continued to operate. While some of these may have closed shop, Phividec said this was not due to the Covid-19 pandemic but due to internal company problems, the source added.
Given all the sanguine forecasts surrounding the prospects for this soon-to-rise integrated steel mill project, the Philippines may well be on the brink of taking the first crucial step in its long-drawn bid to industrialize.
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