Source: BusinessWorld Online Edition
In a statement issued over the weekend, SteelAsia announced it has formally offered to acquire National Steel Corp. and convert it into a “state-of-the-art” steel manufacturing complex to meet the rising demand for the material in the Philippines.
The maker of reinforced steel bar submitted its proposal to National Development Co. General Manager Ma. Lourdes Rebueno. It expressed openness to negotiate with all valid claimants, including the government, for an asset-purchase arrangement.
“This will be a major step towards 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,” SteelAsia President and Chief Executive Officer Benjamin O. Yao said.
The proposed factory will produce plates, beams, billets, slabs, sheet piles, among other products currently imported by the Philippines, Mr. Yao noted.
If the proposal materializes, Iligan City will be the site of Steel Asia’s seventh facility. Its other factories located in Davao City; Meycuayan, Bulacan; Carcar, Cebu; Calaca, Batangas; and Phividec, Misamis Oriental are operating at full capacity.
“We grew exponentially in the past ten years, starting with a production capacity of 450,000 metric tons in 2006 to 2.7 million metric 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 million metric tons, which will be 60% of total annual demand,” Mr. Yao said.
The existing steelworks of SteelAsia include mothballed or existing plants located in Cebu, Batangas and Misamis Oriental. The company has already settled these acquisitions as of last year, Mr. Yao noted.
“We have the expertise and the balance sheet to take over Iligan and re-start our quest for a steel industry that will serve as the backbone of our industrialization,” Mr. Yao said.
“We see continuing growth in demand in the coming years that is why we need to expand. The Iligan plant will be a strategic maneuver for us as a company and the country as well in terms of industrialization.”
National Steel became the largest steel mill in Asia before going bankrupt in 1999. The factory stood on 400 hectares of land and properties later foreclosed by the local government for its failure to settle more than P4 billion in real property taxes.
In July of last year, Iligan City Mayor Celso G. Regencia declared the revival of National Steel a priority program by issuing an executive order to reconstitute a working group charged for the collection of real property taxes and the conduct of necessary studies for the rehabilitation and operation of the steel mill.
“Being the single largest stakeholder in the plant facilities of National Steel Corporation which owes more real property taxes from last quarter 1999 up to March 31, 2015 in the total amount of P 4,363,775,912.47 the City of Iligan must avail of all lawful remedies to collect the said real property taxes and to have the plant rehabilitated, operated and thereafter integrated by a qualified investor to be vetted, qualified and chosen by Iligan City,” the executive order dated July 25, 2016 read.