TKC plans to go into mining

Publicly-listed TKC Steel Corp. is planning to diversify into the mining sector to complement its steel manufacturing business.

Given a slowdown in the global economy, TKC is scouring for new business opportunities which include iron ore mining, according to company president Anthony Dizon.

“We’re looking into it (mining). We feel it’s going to be a complimentary strategy. How we’re going to barge into it is what we have yet to discuss,” Dizon said.

Dizon said the company may enter into strategic partnerships with existing mining companies to pursue its planned foray into the mining industry.

“We’re talking to some people but nothing concrete has come out of our talks. Probably in the next few weeks you’ll hear something from us,” Dizon said.

The diversification comes at a time when demand for steel has softened a bit.

Some analysts, however, are predicting that global steel production will jump form current levels of 1.2 billion tons annually to two billion tons by 2020, fueled by expansion of emerging economies in China and India.

Formerly SQL Wizard Inc., TKC is the only steel manufacturer listed in the Philippine Stock Exchange (PSE).

TKC is part of the Tiu Group of Companies that also owns several businesses in the financial services and hospitality and tourism sectors. Among them are iRemit, an overseas remittance services company, Sterling Bank of Asia and the Discovery Group chain of small or mid-sized luxury hotels.

TKC has two subsidiaries Treasure Steelworks and China-based Zhang Zhou Stronghold Steelworks.

Treasure Steelworks operates a billet-making plant in Iligan City, Lanao del Norte. The plant, formerly owned by National Steel Corp., is the largest in the Philippines with an installed capacity if 300,000 metric tons.

Zhang Zhou, on the other hand, manufactures spiral pipes and electric resistance welded pipes for general construction, water transmission, and oil and gas applications with a production capacity of 200,000 metric tons of finished pipe products per year.

Last year, TKC reported a ten-fold increase in its net income to P154 million from a meager P15 million in 2006 on the back of higher volume turnover, improved profit margin and better operating expenses.

Total sales reached P4.725 billion or nearly three times the previous level of P1.67 billion as sales volume of steel billets surged by 107 percent.

Treasure Steelworks pumped in P226 million while  Zhang Zhou incurred a net loss of P51 million.