China firm eyes $4.4-B steel project in PH
Chinese state-owned firm HBIS Group Co. Ltd. wants to put up a $4.4-billion integrated steel and iron project in the Philippines, making it potentially the largest industrial investment from China to date.
HBIS Group, the third-biggest steelmaker in the world, signed a memorandum of understanding with Huili Investment Fund Management Co. Ltd. and local partners on Friday at the Board of Investments in Makati City.
The MOU, which was also signed by the Philippines’ largest steel manufacturer Steel Asia Manufacturing Corp. and Phividec Industrial Authority, further signified the group’s plans to set up shop in the country.
The signing is the culmination of research and discussions for more than a year until the project found the right location and partners. A letter of intent for the project was sent to the BOI in March 2017.
“From that time on, Huili Investment Fund Management and the BOI collaborated intensively on the preparations leading to this day,” BOI Chair and Trade Secretary Ramon Lopez said during the ceremony.
Nothing, however, is final yet. Its application for incentives from BOI was still pending when the MOU was signed.
BOI Managing Head Ceferino Rodolfo told reporters on the sidelines of the signing ceremony that the proponents submitted the application to the BOI two weeks ago.
Once the project is fully operational, the Philippines can than be making its own appliance-grade and automotive-grade steel products—key parts in local production.
The project will be done in two phases that will generate more than 20,000 additional job opportunities, the BOI said.
If it qualifies under the current rules for incentives, the first phase of the project—which will cost $3 billion—can start operating by the second half of 2021, Rodolfo said.
The project will occupy a 305-hectare land inside the Phividec industrial estate, which BOI called the most strategically located industrial zone in the country for heavy industries right inside Mindanao.
The facilities in the plant will include those related to port operation, sintering, coking, pelletizing, iron-making, steel-making, steel rolling and further processing. The construction and ramp-up period will take three to five years.
Phase I will cover production of 4.5 million tons of hot rolled coil (HRC) and 600,000 tons of slabs. Meanwhile, the project will increase its steel manufacturing capacity to 8 million metric tons under Phase II, while producing other products such as appliance grade and automotive grade steel products.
“This project is very important because it truly represents industrial empowerment. With this integrated steelmaking facility, the country will be able to capture, through this and succeeding phases of the project, large part of the value [chain] for the manufacture and assembly of appliances, automotive, construction materials, shipbuilding, heavy equipment manufacturing, among others,” Rodolfo said in the same statement.
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