STEELASIA Manufacturing Corp. (SteelAsia), the largest reinforced steel-bar maker in Southeast Asia and the Philippines, is eyeing to acquire National Steel Corp. (NSC) in Iligan City in line with the government’s push for industrialization and to revive the country’s lagging steel industry.
In a statement, the steel-bar maker aired its intent to convert the NSC into a state-of-the-art steel-manufacturing complex.
“This will be a major step toward the development of a long-overdue local steel industry, which will generate new businesses and strengthen existing ones, like the automotive industry, shipbuilding and repair, construction, and infrastructure that, in turn, will boost countryside growth and create more jobs,” said Benjamin Yao, SteelAsia president, in a statement.
SteelAsia plans to put up a modern and environment-friendly factory in Iligan, producing products like plates, beams, billets, slabs and sheet piles, among others, which are all currently imported, he said.
SteelAsia has communicated to NSC that it intends to negotiate with all valid claimants for an asset-purchase agreement. News reports early this year announced the city of Iligan’s acquisition of all the assets of the NSC through a tax-delinquency auction allegedly after its previous owner failed to pay P5 billion in real-property taxes. If the proposal materializes, Iligan will be SteelAsia’s seventh steelworks.
Its six steelworks, located in key growth regions throughout the country, are all operating at full capacity.
“We grew exponentially in the past 10 years, starting with a production capacity of 450,000 metric tons (MT) in 2006 to 2.7 MMT tons in 2016 for rebars and billets. We are putting up new ones in the next two years to bring up our capacity to 5 MMT, which will be 60 percent of total annual demand,” he said. This growth came from greenfield plants like those in Davao City and Meycauayan, and from acquiring shuttered or existing plants like those in Carcar, Cebu; Calaca, Batangas; and Phividec, Misamis Oriental.
Yao said all these acquisitions were all fully paid as of last year.
“We have the expertise and the balance sheet to take over Iligan and restart our quest for a steel industry that will serve as the backbone of our industrialization,” Yao said.
One of President Duterte’s campaign promises last year was to revive the country’s iron and steel industry, considered to be the backbone of the country’s industrialization.
The iron and steel industry today has diminished both in output and employment, due to the availability of cheaper steel imports from China, coupled with tariff elimination under the World Trade Organization.
Among the recommendations of the business groups in a consultative meeting with the government last June was the practice of “responsible mining”, with the option to gradually phase out mineral-ore exporting. This, they said, would spur value-adding in the local iron and steel industry.