February 8, 2023

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SteelAsia and BaoSteel construct an integrated steel plant for ₧108-B

SteelAsia Manufacturing Corp. and China’s BaoSteel Group have reached an agreement to build an integrated steel mill worth Pta 108 billion.

The agreement was signed by Benjamin Yao, Chairman and CEO of SteelAsia, and Li Huaidong, Vice President of Zhongnan Iron & Steel Co. Sr. of Baowu Group, during President Ferdinand Marcos Jr.’s three-day state visit to China in early January.

The plant will produce 3 million tons of liquid steel that can be converted into almost any finished steel product that can then power and strengthen other industries such as construction, automotive, appliances and shipbuilding, to name a few.

“This project will create new industries and wean the country from its perpetual dependence on imports. It will create around 2,000 jobs, including for professionals who have historically worked abroad and had to leave their families,” Yao said in a statement.

Baowu will set up a team next month to explore a possible suitable location for this project together with SteelAsia.

SteelAsia operates 6 manufacturing plants in Bulacan, Batangas, Cebu, Davao and Misamis Oriental. The seventh plant is scheduled to open this year in the city of Compostela on Cebu. This will increase annual production from 2 million tons (MMT) of steel to 3 MMT.

SteelAsia is the country’s largest steel producer, while Bao Group is the world’s largest.

In 2020, China Baowu produced 115 million tons of steel, realizing the historic leap of “100 million tons Baowu” and becoming the world’s leading steel company. In the Fortune Global 500 list released by Fortune in 2022, China Baowu ranked 44th, making it into the top 50 for the first time.

During his state visit to China Jan. 3-5, Marcos secured investment commitments worth US$22.8 billion.

These investment commitments include $1.72 billion for agribusiness, $13.76 billion for renewable energy, and $7.32 billion for strategic surveillance (EVs, mineral processing).

Agreements on investments in coconut and food processing were also signed during the visit; development of durian production; and processing and marketing and alternative green technologies for animal feed and other agricultural products; and the sustainable supply of agricultural inputs, especially fertilizers.

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