Local firm to invest P1 B on steel bar plant

MANILA, Philippines - Filipino-owned New Carcar Manufacturing will be investing P1.044 billion for a steel bar manufacturing plant in Maycauyan, Bulacan.

New Carcar is owned by the Yao family, the same people behind SteelAsia Manufacturing Co.

BOI Officer-in-Charge Lucita P. Reyes said that the group will be establishing a rolling and rebar manufacturing facility which will have a capacity of 400 million metric tons per year.

Early this year, New Carcar announced its investment of P10.570 billion for three billet manufacturing facilities in Luzon, Visayas and Mindanao.

New Carcar will build three manufacturing facilities. One will be in La Union, the other in Cebu and the Mindanao plant will be in Mindanao del Norte.

Reyes said the rationale behind the three plants is for easier distribution. “This will make steel billets easily available in Luzon, Visayas and Mindanao.”

The three plants will each cost P3.523 billion to construct. It has a total capacity of 1.2 million metric tons or 400,000 metric tons per facility.

The steel billets will all be sold to Steel Asia. Currently, the steel billets used by Steel Asia are imported from other countries. New Carcar has a tolling agreement with Steel Asia.

Reyes said this investment will help the Philippines be more competitive because there are many users of steel products in the country.

SteelAsia has another tolling agreement with Harbour Industrial Development Corp. Under said agreement, among other provisions, SteelAsia will provide the raw material like steel billet while the applicant firm will manufacture them into rebars at an agreed tolling fee of P 2,800 per MT.

Harbour invested P1.95 billion for a steel bar manufacturing plant in Davao del Norte. This will be operational in January 2012. The plant will have an annual capacity of 400,000 metric tons.

The Davao plant output is intended for the Mindanao market. The applicant firm is also planning to export around 10 to 20 percent to Manado, the capital of the North Sulawesi province of Indonesia.