The Philippines once boasted a significant steel manufacturing company known as the National Steel Corporation (NSC). This company was among Asia’s largest steel plants and was considered the backbone of the country’s industrial growth. It enabled the Philippines to become the second Asian nation to establish a steel manufacturing plant. At its peak, NSC was the 11th largest enterprise in the Philippines, exporting steel products to countries like China, Indonesia, and even the United States. Their hot rolling mill had an impressive capacity of producing over 350,000 metric tons of steel per year.
However, the NSC we once knew has faded into history. Many Filipinos today, especially the younger generations, might not even be aware that the Philippines once had such a prominent steel industry. This decline began when the government decided to sell NSC to private enterprises, leading to mismanagement and the eventual downfall of what was once the face of the Philippine steel industry.
With the fall of NSC, questions arose about the future of the Philippine steel industry. Would the country have to rely entirely on imported steel, or could a new player rise to fill the void?
Enter SteelAsia, the new face of the Philippine steel manufacturing industry. Today, SteelAsia is considered the flagship steel company of the Philippines, operating six world-class facilities across the country and ranking among the world’s largest rebar manufacturers. Recently, SteelAsia made headlines by sealing a deal to export over 36,000 metric tons of steel to Canada, marking a significant milestone in the company’s growth. This export, valued at 1.32 billion pesos, was the company’s fifth export by mid-2023, with another planned by May 2024, bringing total exports to 1.5 billion pesos.
But how did SteelAsia, a name that few may have known, suddenly become the face of the Philippine steel industry, and by extension, the face of the country’s industrialization? Who exactly is SteelAsia, and how significant is their presence in the industry?
SteelAsia’s journey began in 1965, born from a partnership between Filipino businessman Benito Yao and Go Kim Pah, the founder of Equitable Bank. They established a rolling mill named Island Metal, a small rebar facility that has since evolved into one of the world’s largest and most modern rebar manufacturing companies.
In the late 1980s, under the leadership of Benjamin Yao, the company embarked on a significant expansion and modernization phase. This expansion included the establishment of a second rolling mill in Bulacan, which tripled the company’s steel production output. SteelAsia also found a strategic partner in National Steel of Singapore, which played a crucial role in creating the Philippines’ first state-of-the-art steel bar rolling mill. This facility, commissioned in 1996, utilized European technology and marked the Philippines’ entry into modern industrialization within the ASEAN steel community.
By 2000, SteelAsia had become the largest rebar manufacturer in the Philippines. The company continued to grow, acquiring steel plants in Batangas, Cebu, and Misamis Oriental. In 2010, SteelAsia reacquired the 40% stake previously owned by foreign companies after Tata Group divested their shares. Four years later, SteelAsia opened the country’s largest and most modern rolling mill in Davao City and began construction on another plant in Cebu.
In 2015, SteelAsia planned to open another steel plant in Calabarzon, requiring millions in investments and expected to have an annual production capacity of 500,000 metric tons. The company had already allocated 19.2 billion pesos for the construction of three new plants in Bulacan, Cebu, and Batangas by 2018.
Their upcoming facility in Plaridel, Bulacan, was set to be the largest steel plant in the country, with a capacity of over 1.2 million metric tons per year, involving an investment of 6.5 billion pesos. By this time, SteelAsia had firmly established itself as the new face of the Philippine steel industry, making NSC a name of the past.
SteelAsia’s investment projects were not small. In addition to their 6.5 billion pesos steel plant in Bulacan, they also had a 6 billion pesos plant in Cebu and a 6.7 billion pesos facility in Batangas. By 2017, the company had settled over 7.2 billion pesos in loans, which were used to build new steel plants around the country and upgrade existing mills. SteelAsia even made its final payment on a 2.25 billion long-term project loan from Standard Chartered London for its 4-billion Davao City Mill in December 2016. This state-of-the-art mill has been fully operational since then, generating revenue and providing jobs for thousands of people.
SteelAsia’s six steel mills had a combined production capacity of 2.3 million tons of steel, making it not only the largest steel manufacturer in the Philippines but also the largest rebar manufacturer in Southeast Asia.
In 2017, SteelAsia expressed interest in acquiring the old NSC steel plant, with plans to convert it into a state-of-the-art steel manufacturing complex. They proposed settling the P7.4 billion debt incurred by NSC, much of which came from unpaid real estate taxes, bank loans, and electricity bills. Unfortunately, no further information has emerged from this deal, and the old NSC plant remains unused to this day.
In 2018, SteelAsia announced a massive investment of over 80 billion pesos in a three-phase rolling plan to capitalize on the growing demand for steel in the domestic market. Phase one included a 25 billion pesos plan for three new mills dedicated to manufacturing midstream steel products, with a 7.5 billion pesos plant in Tarlac set to produce 1.2 million tons of wire rod annually and another 7.5 billion pesos mill in Cebu.
These newly inaugurated plants aimed to strengthen the Philippine steel industry and reduce reliance on imports, particularly from China and South Korea. SteelAsia’s management emphasized the importance of building a steel industry that could supply 70% of the country’s local demand. Currently, 86% of the Philippines’ steel needs are still imported.
Among SteelAsia’s most significant investments today is the 19 billion pesos Lemery Works in Batangas, which is slated to be the Philippines’ first-ever steel beam manufacturing facility, with a capacity to produce 600,000 tons of steel products annually.
However, despite SteelAsia’s progress, the company’s vision to fully supply the Philippines’ steel needs is still a work in progress. While they currently produce over 3 million metric tons of rebar per year, meeting 80% of the country’s rebar demand, much more needs to be done to achieve the 70% local supply target.
These projects represent the ongoing efforts of SteelAsia to revive the nation’s steel industry and restore it to the glory once held by NSC. But the road ahead is still long, and the journey continues.