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Sunday, February 17, 2019

PH steel industry has untapped potential beyond producing mainly rebars, says consultant

GOVERNMENT would do well to study the steel industry’s potential, in support of its push for industrialization.

A consultant to SteelAsia Manufacturing Corp., Eng Poh Tzan, said he sees a lack of deep study on the country’s steel industy, which has been heavily dependent on imports from China. SteelAsia is one of the country’s major steel rebar producers.

“I feel that the Philippines may have not started thinking deeply (about developing its steel industry),” the Singaporean consultant said in an interview during a media tour of SteelAsia’s plant in Carcar City.

The support, he said, must come first through a macro-perspective sustainability study of the steel industry, and government must subsequently consider giving incentives to industry players.

At present, the private consultant, said the Philippines is mainly producing reinforcing steel bars or rebars, and imports steel billets mainly from China as input materials.

According to the Philippine Iron and Steel Institute, 80 percent of the required slabs and billets are imported from China, Russia, and Japan.

2 plants in Cebu

The Yao-led SteelAsia produces 80 percent of the rebar requirement in the country. The company has two plants in Cebu, located in Carcar and in the town of Compostela, which is slated for operations by 2018.

With private-public partnership infrastructure projects coming online, SteelAsia Chairman and President Benjamin Yao said in the company website that this will reinforce the demand for construction steel.

However, based on the Philippine Industry Steel Roadmap, the Philippines is not yet a big consumer of higher value steel products meant for manufacturing industries, a reason the industry remains underdeveloped. Steel consumption in the country is at 63 kilograms per capita compared to the world average of 225kg/capita.

So far, the focus of the industry is on downstream construction steel and delivering value to customers, the roadmap reads. That includes value-adding services such as “cut and bend” where rebars are prepared to exact specifications.

SteelAsia offsite fabrication manager Edwin N. Lu said cut and bend rebars require less on-site labor, ensure precision and control material wastage. SteelAsia began offering cut and bend services to their Visayas and Mindanao clients in 2014.

During the campaign period in January this year, then Davao City Mayor and now President Rodrigo Duterte said he will push for the development of the country’s steel industry, believing that it is only by shifting to industrialization that the government would be able to provide better opportunities to Filipinos, who wouldn’t have to work overseas to earn more.

“Steel is needed everywhere. It is the mother of all industries and the backbone of industrialization and will allow us to build all we need in our country like cars and weapons,” Duterte previously said.

The Department of Trade and Industry (DTI) has several recommendations for the steel industry, which include implementing measures that would reduce the costs of importing raw materials and losses of revenue due to unfair competition; reducing electricity and logistics costs; and making the sector more attractive for local and foreign investors through ISO accreditation, among other measures.

Last week, DTI sent a letter appealing to President Duterte give his green light to the P7.2-billion rolling steel mill project of Del Pilar Steel Inc. (DPSI), owned by SteelAsia in Bulacan.

Depsite having secured regulatory approval from the previous administration, DTI said the project has not taken off due to opposition from Kalikasang Dalisay Para sa Mamamayan ng Plaridel, who claims that the site is classified as an irrigated agricultural land.

DTI believes Duterte’s support will ease out opposition to the project and will be supportive of his push for industrialization.

The Bulacan plant is envisioned to be the country’s largest rebar-manufacturing facility, with a production capacity of 1.2 million tons.
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