Steel company’s P3-billion plant to capture Mindanao infra projects

Dec. 05, 2014

DAVAO CITY –  The country’s leading steel manufacturing company, Steel Asia Manufacturing Corporation, opened its biggest plant in the Mindanao Island here in Davao City in its bid to capture the infrastructure and construction boom in the island.

Steel Asia’s newest plant is located in Barangay Bunawan, 23 kilometers north of downtown, and occupies an area of 11 hectares. It is the sixth plant of the company and the biggest steel plant in the country. It was simultaneously inaugurated with another steel plant in Cagayan de Oro City built at a cost of P1 billion.

The company president, Benjamin Yao, said they have expanded to Mindanao, expecting more infrastructure projects from government and construction of real estate and commercial buildings in the coming years.

“Since 2012 up to 2015 the Mindanao public works and highways budget allocation exceeded all major region groups, which include the National Capital Region, Northern Luzon, Southern Luzon and Visayas,” said Yao.

Steel Asia Vice President Rafael Hidalgo said the government budget allocation for Mindanao projects through the Department of Public Works and Highways has increased by 68 percent from P37.5 billion in 2014, to P63 billion for 2015.  With more government spending, construction firms will follow, he said.

“When you build, everything else follows. So with this prospect, we may even be building another plant,” Hidalgo said.

The company said there is a nationwide demand of 3.3 million metric tons of steel bars, in which Steel Asia can now provide two million tons as the Davao mill has the capacity to produce 500,000 metric tons of expanded steel bars or rebars.

Yao also said the increase of projects in Mindanao had convinced the company to expand its plants and bring the supply closer and cheaper to the regional markets, including another plant in Cebu.

“Around 75 percent of Steel Asia’s operation is no longer in Manila, but dispersed regionally. We are proud that we are part of the solution in the decongestion of the ports of Manila,” he said.

“Consumers would save up to P35,000 per truckload of 25 tons of steel bars,” Yao said about the cost-efficient result of transferring operations to the regions.

The transfer of Steel Asia is welcomed by the local construction business, according to Architect Daniel Lim, past president of the Davao City Chamber of Commerce and Industry, Inc.

“Their arrival means steel bars are priced at more affordable rate, it will encourage more construction, and also more confidence to invest and build in Mindanao,” said Lim.

Lim noted that constructions have been booming with the rise in commercial and real estate buildings and land-banking ventures in the city.

With this trend, Yao is also confident of a steady supply of imported steel to meet this demand.

“Worldwide there is a glut in steel supply from China, Russia and Europe. We see no shortage of steel in the next six years,” he said. Steel Asia’s source of steel billets comes from China.

Yao said the company would contribute around 2,000 people in employment including its 300 workers working in 24-hour shifts, and other outsourced labor involved in transportation, packing and mechanics.

The Davao mill costs P3 billion and its mill equipped with the latest technology that they claimed is “most efficient in power and fuel consumption.”  It employs technology that uses 100 percent recycled rain water for its operations and an innovative closed lubrication system that ensures no seepage of used oil into the environment.

Steel Asia has been the country’s leading steel manufacturing company and has existed for 49 years.

Their website listed in its infrastructure projects in Mindanao includes the Davao Urban Drainage & Flood Control and the Laguindingan Airport in Laguindingan, Misamis Oriental. (Tyrone A. Velez/

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