SteelAsia Investing P25 Billion For Philippine's First Wire Rod Mills
24 Oct 2018
Steel firm SteelAsia Manufacturing Corp. is allotting P25 billion for two wire rod mills, which when completed, would boost production by one million tons a year.
In a statement, SteelAsia said the two mills for wire rod production would be put up in the Visayas and Central Luzon, and would have a capacity of 500,000 tons each.
“At present, the Philippines has zero capacity for wire rods. That means, we are importing all our wire rod requirements which has reached 800,000 tons a year and climbing. When operational, this import substitution will save the country around $600 million a year in foreign currency,” SteelAsia chairman and chief executive officer Benjamin Yao said.
Wire rods serve as raw material for various products like machine parts, springs, cables, welding wires and rods, mesh, nuts and bolts, screws and other fasteners, tools, and tire-cord.
Small and medium enterprises (SMEs) producing such products are expected to thrive with the availability of local wire rod supply.
The SMEs would also be able to link their supply to high value manufacturing such as the automotive and machinery sectors as seen in the steel-based model for industrialization in the US, Japan, South Korea, Taiwan and China.
Given the high cost of imported wire rods, Yao said many SME manufacturers requiring wire rods for their products are not able to compete with the imported version of items they produce.
“Hence, the Philippines has been importing its nuts and bolts, wires or ‘alambre’, nails, welding rods, springs and even paper clips, staple wire and many other wire rod-based products, while all these can actually be locally produced if only the Philippines had wire rod manufacturing,” he said.
Earlier, SteelAsia announced it has set aside over P100 billion for investments over the next five years to quadruple its capacity.
In particular, the investments would be used to put up more upstream facilities by constructing new integrated steelmaking plants, as well as expanding midstream and downstream products to include H beams, sheet piles, wire rods, steel plates, and reinforcing steel mesh which will enable the country to produce basic steel-based materials like pipes, tools, and machinery parts.
Through higher capacity, SteelAsia expects to help the country achieve 70 percent steel self-sufficiency from the current 40 percent.
SteelAsia is the biggest steel company in the country, as it produces over 2.6 million tons of various steel products per year.