China’s HBIS Group to Set up 8 MnT Steel Plant in Philippines

China’s one of the biggest steel companies HBIS Group (Hebei Iron & Steel Group) Ltd has signed a MoU (Memorandum of Understanding) on Friday with Philippine Steel Asia Manufacturing Corporation (PSAMC) to develop an integrated iron and steel plant costing USD 4.4 billion in the southern Philippines.

The project is set to be developed in Misamis Oriental province of Philippine and will be China’s largest industrial investment in the country so far.

The Department of Trade and Industry (DTI) of Philippines has confirmed that the HBIS Group along with Huili Investment Fund Management Co. has signed a memorandum of understanding (MoU) with PSAMC and PHIVIDEC Industrial Authority for the construction of integrated steel complex project.

HBIS Group is a state-owned company based in China’s Hebei province that produces appliance grade and automotive grade steel products. It is described as the second largest steelmaker in China and the third largest in the world.

Whereas Huili Fund is a private equity firm headquartered in Beijing that invests in real estate, finance, and industries. In 2017, the company had signed a letter of intent with the Board of Investments (BOI), signifying its willingness to partner with the Philippines and private sector entities. PSAMC has been a top rebar producer in the Philippines with six production units located in the country. The company is currently expanding its services for more efficient production and to boost capacity.

The new project of HBIS in Philippines will be spread across an area of 305 hectares and will be developed in two phases. The first phase is likely to cost USD 3 billion covering the production of 4.5 MnT of the hot rolled coil (HRC) and 600,000 tonnes of slabs while the second phase will further increase the project’s steel manufacturing capacity to 8 MnT. The steel produced can be further made into metal sheets, nails, paper clips, and construction-grade products such as wire rod and wire mesh. The project is likely to provide 65,000 indirect job opportunities for local workers.

As a fast-growing economy in Southeast Asia, Philippines has a huge demand for iron and steel. Philippine government statistics show that iron and steel is the country’s fifth import by commodity group, which is valued at USD 4.91 billion from Jan to Oct’18 with a growth of 39.4% from 2017.

In last month one more Chinese steel manufacturer Panhua Group Co., Ltd. has formally signed a MoU with the DTI, the Philippine Economic Zone Authority (PEZA) and the PHIVIDEC Industrial Authority for the establishment of an integrated steel mill of 10 MnT capacity and the estimated investment in the same is USD 3.5-billion.