By Lara Climaco i FilAm Star Correspondent
Hebei Iron & Steel (HBIS) Group, China’s second-largest and the world’s fourth-largest steel producer, is putting up an integrated steel complex at the Phividec Industrial Estate in Mindanao in partnership with Huili Investment Fund Management and Steel Asia Manufacturing Corp, a flagship company in the Philippines’ nascent steel industry.
Together, they are putting up a US$4.4 billion complex complete with port operation, sintering, coking, pelletizing, iron-making, steel-making, steel rolling and further processing facilities. The HBIS Philippines plant is expected to be completed in four years, thus beating a similar project announced by the Panhua Group as the country’s first-ever integrated steel complex.
Panhua, a private entity also from China that is eyeing a six to seven-year timeline for its planned US$3.5 billion investment in Phividec, signed the memorandum of understanding (MOU) for its project last month. HBIS is further along, however, with two years already spent on market studies, locational visits and investor matchmaking before its own MOU signing held last December 14. The project of HBIS Group, which is a state-owned enterprise — wholly owned by the Hebei provincial government, is considered the largest industrial investment from China to date.
“We are happy to note that an application for the Board of Investments (BoI) has been recently filed in behalf of this project and we hope to have a fast approval of this project, hopefully before the year ends,” Department of Trade and Industry Sec. Ramon Lopez said in his speech during the December 14 MOU signing for the HBIS project.
Its approval would bring BOI investments to another record finish this year, according to the DTI chief. “Last 2017, we hit PHP617 billion in investment, the record for 50 years and this year, I won’t give you the number but we will definitely beat that PHP617 billion investment by a wide margin before the end of the year. So this will be another record-breaking year in the 51-year history of BOI,” he said.
Its impact will be longer-lasting. With US$3 billion earmarked, Phase I of the HBIS project involves the production of 4.5 million metric tons (MT) of hot rolled coil and 600,000 tons of slabs. Capacity is expected to be raised to 8 million MT under its Phase II. Job generation is estimated at 65,000.
“This project is very important because it truly represents industrial empowerment. With this integrated steel-making facility, the country will be able to capture, through this and succeeding phases of the project, a large part of the value for the manufacture and assembly of appliances, automotive assembly, construction materials, ship-building, heavy equipment manufacturing, among others,” DTI Usec. and BOI Managing Head Ceferino Rodolfo was quoted in a DTI statement.
The country’s trade deficit is projected to decline by US$2.3 billion during Phase I of the project alone and by US$4.4 billion in succeeding phases, Lopez said. Steel imports during the first 10 months of the year cost almost US$5 billion, making iron and steel products the fifth largest import commodity group.
Trade officials are also hoping to expand the range of Philippine steel-based exports once the HBIS is fully operational. The total domestic and export sales of slabs and hot rolled coils from the HBIS plant would amount to PHP 144.279 billion, according to the BoI.
A delegation from Hebei province led by Vice-governor Li Qian traveled to Manila for the signing ceremony. In his speech, Li touted the HBIS Philippines plant as a highlight of China’s Belt and Road initiative.
“I believe HBIS Philippines project will be another demonstration case of international cooperation and capacity… [The] Hebei provincial government will give great support to this project in terms of human resource and capital investment,” he said.
Benjamin Yao, chairman and CEO of Steel Asia, noted that the Philippine steel industry is at an inflection point with domestic demand for steel at an all-time high. “In our quest to have a steel industry, there can be no better partner than HBIS. HBIS played a key role in the development of China’s own steel industry,” he said.