SteelAsia Announces Construction of $1.6 Billion Integrated Steel Mill Complex

SEATTLE (Scrap Monster): SteelAsia Manufacturing Corp.- the flagship steel company of the Philippines has commenced works on an integrated steel project. The integrated steel project is projected to get completed within five years.

The $1.6 billion investment is expected to double SteelAsia’s rebar production capacity from current levels of 2.3 million metric tons per year to nearly 4.5 million. Also, the integrated steel mill complex will help the country save millions by limiting steel imports. Currently, the country imports 90% of its steel requirements.

The initial phase of the project, which is currently under process, will run until 2021. This involves construction of three additional mills-two wire rod and bar mills and one section mill. The first of the two wire rod mills, to be set up in Compostela, Cebu will have a production capacity of 800,000 million metric tons per year. This mill facility is expected to go online by next year. The second wire rod and bar mill will be located at Concepcion, Tarlac and will have a capacity of 1.2 million metric tons per year. The 500,000 mtpy section mill will be built in Lemery, Batangas. Currently, Philippines imports wire rods mainly from China. Also, China, Korea, Japan, Thailand and Taiwan are the key suppliers of section.

The establishment of the above three new mills is estimated to cost around $500 million. The mills will make maximum use recycled steel scrap, which currently goes as exports out of the country, to feed the mills. The company will buy scrap from local market, which will be recycled to produce billets, which in turn will be used to feed rebar mills. Steel Asia will continue to import additional scrap, if required. Incidentally, the Philippines currently exports nearly 2 billion million tons of scrap per year. The first phase of the project is expected to employ 3,000 direct and nearly 15,000 indirect employees.

The SteelAsia Group was founded by Benito Yao and Go Kim Pah in 1966 and is the leading rebars manufacturer in the Philippines.