Workers of Steel Asia's Davao Rolling Mill project goes out of the facility compound for lunch. Steel Asia will build a P2-Billion in Barangay Bunawan.
Observers hail the local production of steel components to be powered by locally-produced electricity since it would benefit the construction industry and make roads and bridges cheaper to build. But for how long, things are not certain, given that the country is still tied up under the General Agreement on Tariffs and Trade-World Trade Organization (GATT-WTO) which allows dumping of excess steel from other countries.
By JOHN RIZLE L. SALIGUMBA
Davao Today
DAVAO CITY, Philippines — The Davao City Council is poised to approve the construction of a PhP2 billion steel processing plant in the city that would be powered by the controversial Aboitiz Power Corporation.
Last December, the same councilors also upheld their earlier majority vote to approve a 25-billion peso coal-fired power plant by Aboitiz. The move overrode not just the veto by City Mayor Sara Duterte who opposed the project; it also outweighed the pollution and health issues surrounding the coal plant raised by environmental advocates.
The City Council’s committee on housing, rural and urban development recommended the approval of the operations of a steel processing plant called Davao Rolling Mill project by the New Carcar Manufacturing Incorporated, a subsidiary of Steel Asia Manufacturing. Fencing and construction of the plan in this city’s Barangay Bunawan has been underway since December last year.
In April last year, Aboitiz Power Corporation’s subsidiary AP Renewables Incorporated reportedly signed a 12-year deal to provide 70-Megawatt (MW) power to Steel Asia.
Observers hail the local production of steel components to be powered by locally-produced electricity since it would benefit the construction industry and make roads and bridges cheaper to build. But for how long, things are not certain, given that the country is still tied up under the General Agreement on Tariffs and Trade-World Trade Organization (GATT-WTO) which allows dumping of excess steel from other countries.
Steel Asia will produce reinforcing steel bars or rebars useful in the construction industry, particularly concrete roads and bridges. Its rolling mill facility — the Reinforcing Steel Bar Rolling Mill — will be erected on a 128,489-square meter (approximately 11 hectares) lot in Purok 17, Sitio Mahayag, Barangay Bunawan Proper in Bunawan District.
The project’s environmental impact assessment claims that the plant will export its products to Indonesia and will also supply “higher quality rebars to Visayas and Mindanao in support of the low-cost housing projects in the area. “
Gains, losses
Barangay Bunawan Councilor Ronnie Odeña talks about the proposed P2-Billon Davao Rolling Mill Plant, a steel processing plant soon to rise in their barangay.
Bunawan village councilor Ronnie Odeña told Davao Today they were promised jobs with the construction, thus effectively sealing the village’s endorsement of the project.
“About 87 skilled workers are reportedly needed but the company told us that they may need around 400,” Odeña said. Company documents obtained by Davao Today, however, indicate, the project would need 179 personnel.
Engineer Renyl Barroca of the Ateneo de Davao University’s College of Engineering and Architecture welcomed the steel plant saying “prices will go down” which will benefit the construction industry and encourage steel-dependent businesses.
Barroca recalls the benefits of the country’s one and only integrated steel plant, the National Steel Corporation (NSC) in Iligan city. The NSC produced billets, the raw materials for rebars and wire rods, flat products consisting of hot-rolled coils, hot-rolled plates, cold-rolled coils, and tinplates.
NSC was closed in 1999 following losses due to the massive influx of imported steel from Russia. With its closure, the scrap iron business lost P1.4-billion while other big corporations were badly affected. This includes Refractories Corp. of the Philippines which lost 30% of its market, Mabuhay Vinyl Corp., supplier of NSC’s chemicals and the National Power Corp. which lost P720M in its yearly sales.
Right now, hardware stores in Davao city import rebars from China.
For Engineer Mark Juanitas, another member of the ADDU Engineering department, it is not certain that steel products become cheaper with the entry of Steel Asia. “It is also possible that import prices will go down, so it will have no effect. If the plant finally operates, suppliers could also agree to purchase and distribute locally without lowering or changing their prices,” he said.
The benefits of the new Davao steel plant can hardly bring about industrialization, says Franchie Buhayan, secretary-general of Bagong Alyansang Makabayan Southern Mindanao. “It is a foreign investment that is favorable only to the business community,” she told Davao Today.
Steel Asia is a joint venture between Yao and Go families, and the Natsteel Holdings Limited of Singapore. The Yao and Go group are into steel manufacturing over the last 45 years. NatSteel is one the largest steel enterprises in Southeast Asia, owned by India’s Tata Steel, the 6th largest steel company in the world.
While Philippines imports steel, mainly from Russia, China and India, it is a major exporter of scrap in Asia. (John Rizle L. Saligumba/davaotoday.com)
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