MANILA, Philippines - New Carcar still Billet Manufacturing Corp., which is majority-owned by the Yao Group of SteelAsia Manufacturing Corp., is investing P10.57 billion for the establishment of three steel billet production facilities in Carcar Cebu in the Visayas, La Union in Luzon, and Davao del Norte in Mindanao in what is deemed as the company's strategic move to take advantage of the current construction boom in the country by making steel products available to their clients nationwide at their convenience and at cheaper cost.
The Board of Investments has already approved the project with tax and fiscal incentives as this activity is listed in the current Investment Priorities Plan of the government.
Lucita P. Reyes, BoI executive director told reporters these new still billet plants would utilize scrap metals from SteelAsia. The agreement is covered under a memorandum of agreement between the two companies.
Reyes explained that each plant has a project cost of P3.523 billion or a combined cost of P10.57 billion for the three projects. Each plant has also the same production capacity of 400,000 metric tons or a combined registered capacity of 1.2 MMT per year, all to be supplied to the local market.
These plants will have simultaneous start of commercial operation in January 2014 with 513 workers.
''For easier administration of incentives and monitoring the BoI has approved the three steel billet projects as one single registration,'' Reyes said.
This makes the Yao Group the biggest steel billet producer in the country with plants strategically located in three regions. In case, one plant bogs down the other plant can fill up the slack, Reyes said.
''They spread out the location so they can be readily available to their clients and to save on freight cost,'' Reyes said.
Reyes pointed out that iron and steel industry is a major economic contributor because of its various applications in the construction industry.
''Production of steel billets will make us competitive because they will be sourced locally,'' she added.
At present, Steel Asia is using imported steel billets to produce rebars.
''The steel billet operation is part of their backward integration,'' Reyes said. SteelAsia is a joint venture between Philippines steel industrialists, Yao and Go families, and NatSteel Holdings Limited of Singapore.
The Yao and Go families have partnered in steel manufacturing for the past 45 years.
NatSteel Holdings Pte. Ltd. is one of the largest steel enterprise in the South East Asia is a wholly owned subsidiary of Tata Steel of India, the 6th largest steel company in the world.
