BOI Moves To Save P7.2-Billion Steel Mill Project

26 September 2016

The Board of Investments is seeking Malacañang endorsement that would allow the P7.2- billion rolling steel mill project of Del Pilar Steel, Inc. (DPSI) to locate in any viable site in the country after it faced strong opposition from its original location in Plaridel, Bulacan.

Documents dated September 20, 2016 showed a draft memorandum from Trade and Industry Secretary Chairman Ramon Lopez, who is also BOI chairman, requesting President Rodrigo Duterte to allow DPSI to locate wherever it chooses as long as it complies with all of the government requirements, such as accreditations, licenses and permits.

DPSI, a subsidiary of Steel Asia Manufacturing Corp., is planning to put up P7.2-billion rolling steel mill as part of its expansion program to supply 1.2 million tons of quality steel products to the local market.

The project, which is expected to start by 2017, will manufacture rebars (reinforcing steel bars) from billets using the most modern rolling mill in the world. Rebar is used as a tension device in reinforced concrete and reinforced masonry structures to strengthen and hold the concrete in compression.

DPSI has already secured the required permits and clearances, including the Environmental Compliance Certificate for the project, but the conversion to industrial use of the land is still pending with the Department of Agrarian Reform.

According to BOI, the project has been delayed for 11 months already because of strong opposition from the Kalikasang Dalisay Para sa Mamamayan ng Plaridel or KaDaMay, an NGO of farmers and towns people of Plaridel, Bulacan.

The NGO group cited three reasons to their opposition to the project. KaDaMay claimed that the land where DPSI is planning to erect its steel mill plant, is allegedly an irrigated agricultural land. The NGO also said that the plant is very near the local population and that use of the Angat River water would eventually affect the riverbank farmers.

While Sangguniang Pambayan of Plaridel, Bulacan has approved the firm’s development plan, the memorandum said that circumstances have forced Steel Asia to reconsider other options.

BOI further said that the company has taken steps to locate to an alternative site that can assure a more viable and unimpeded operation over the long term.

In asking for Malacañang intervention, the BOI said the project is strategic and important because it will significantly reduce imports, which is partly supplied by China, with quality steel products.

The country’s registered apparent steel consumption reached 8.76 million MT of which 4.84 million MTs are imported, valued at around $2.35 billion annually.

In terms of employment, the project will directly employ 300 people and create another 2,400 indirect jobs. In addition, there will be opportunities for support industries including small and medium enterprises.

“The President’s endorsement will provide an assurance to the investors that the delays that it encountered initially will be avoided wherever they may locate in the country,” the draft memo said.

“The President’s endorsement can insulate the project from social opposition that may arise in the future, that could delay its implementation,” the memorandum added.

Steel Asia group is the country’s largest steel company and rebar manufacturer, supplying 2.1 million tons of the industry’s requirements.

It has also invested/commissioned 4 mills in the last 8 years at a cost of R9 billion adding 1.65 million tons of rebar capacity and 400 tons steel-making capacity to the industry.

In addition, Steel Asia has four new projects worth R23 billion in various stages of implementation producing additional two million tons of rebar and the manufacture of H and I beams and wire rods which are currently imported.


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