MANILA: The Trade Department endorsed the P7.2-billion rolling steel mill project of SteelAsia Manufacturing Inc. to President Rodrigo Duterte amid opposition to the site of the factory.
SteelAsia has already suffered an 11-month delay in the project after a group of environmental organizations opposed its proposed location in Plaridel, Bulacan. Trade Secretary Ramon Lopez in his recommendation to Malacañan dated September 20, 2016 cited a group opposing the conversion of irrigated agricultural lands into an industrial estate in Plaridel.
The group also lobbied with President Rodrigo Duterte despite SteelAsia’s compliance to most of the government requirements, including an environment compliance certificate from the Environment Department. The conversion certificate from agricultural to industrial land use remains pending with the Agrarian Reform Department, however.
The Sangguniang Pambayan of Plaridel, Bulacan earlier approved SteelAsia’s plan, but the company said it was considering other sites that could assure viable and unimpeded operation over the long term. The Trade Department considers the project significant, saying it will fill up the slack in local production and offers 300 regular and 2,400 more indirect jobs.
The steel mill is also expected to open up opportunities to many support industries, such as logistics for services and materials for the supply sector. The construction of the Bulacan and Cebu plants of SteelAsia will add another 2 million metric tons of capacity in three years to the company’s current 2.1 million MT production.
SteelAsia is the country’s dominant player in rebar production with a 50 percent share of the market. Twelve companies account for the balance of the rebar steel market. The production of and employment in the country’s iron and steel industry are declining due to direct and unfair competition from cheap Chinese imports.
The Trade Department said while there was supply surplus, the cost of steel would become cheaper, with the gradual phaseout of most favored nation tariffs, influx of cheap imports and technical smuggling.
Expensive power rates and power outages are also discouraging foreign investments on steel. The department though cited opportunities in unserved markets of infrastructure, construction, shipbuilding and other manufacturing business.
Total steel consumption in the Philippines stood at 8.76 million metric tons in 20156. The local industry imports 4.84 million MT with a combined value of $2.25 billion.
