THE largest reinforced steel bar-maker in Asia, Steel Asia Manufacturing Corp., should be prepared to weather the competition in steel production amid the influx of imports and at the same time, infuse significant investments if it’s vying to acquire the National Steel Corp. (NSC), the Department of Trade and Industry said.
Trade Secretary Ramon M. Lopez, also chairman of the National Development Corp. still with a stake in NSC’s assets, said they welcome the offer from Steel Asia, but it should be ready to face the challenges that have held back the steel industry’s full integration.
“My presumption here is they will make their entry with no request for industry protection, meaning no tariff protection. The incentive is that it’s a priority industry,” Lopez said, referring to the government-wide push to stimulate manufacturing.
Lopez said if it acquires NSC, Steel Asia should put up “an entirely new and modern facility”. In its long history, he NSC has been beset with problems, ranging from government policies to internal management.
Once the largest steel mill in Asia, NSC experienced the latest downturn in the late 1990s due to the entry of cheaper imported steel. Still privately owned at that time, NSC filed several dumping cases against foreign competitors producing the same products before the Tariff Commission, but to no avail.
The plant finally shut down in 1999. NSC’s facilities and land, which sit on a 400-hectare property, has been forfeited to the city government of Iligan due to nonpayment of real-property taxes since 1999.
Steel-consuming industries have grown increasingly import-dependent since then, and employment in the industry has steadily declined.
Today, the Philippines imports 80 percent of the country’s crude-steel requirements. Employment in the iron and steel industry sank from an estimated 19,700 in 2003 to 15,648 in 2009.
Less than 2 percent of the manufacturing industry’s employment total today is in the iron and steel subsector.
If Steel Asia does acquire NSC, Iligan will be Steel Asia’s seventh steelworks. Steel Asia has already contacted National Development Corp.’s General Manager Ma. Lourdes Rebueno, and intends to negotiate with all valid claimants, including the government, for an asset-purchase arrangement.
Its six steelworks, located in key growth regions throughout the country, are all operating at full capacity.
This proposal of Steel Asia comes after Huili Investment Fund Management Co. Ltd., a Chinese investment-management firm expressed its intent a month ago to partner with a local company and put up a $10-billion integrated steel mill in the country.