A matter of urgency is the surging construction development we are now experiencing. Behind the sheer volume of steel needed by the Philippines, demand for quality, precision and on-time delivery at the lowest cost has never been more paramount as it is today. Pushed by the rising consumption of construction steel, SteelAsia has been rapidly expanding in the last six years, adding four mills with a total of 1.5 million tons per year of capacity. With the private-public partnership program finally coming online to address the large infrastructure backlog, demand for construction steel is on a trend line to outstrip existing country capacity. SteelAsia is determined to respond to this and prevent this deficiency.
We have invested in the most modern technologies which enable us to lower the cost of production and this is a one of our important corporate contributions to Philippine growth. We have also invested in environmentally friendly technologies knowing that our business must remain sustainable and fully integrated with the communities we are in.
Equally important is the new-frontier expansion philosophy of SteelAsia. We dare to be a first-mover into regional economic centers. We do this for good reason: Expensive inter-island shipping costs between Metro Manila to points across the archipelago increase the cost of construction for Filipinos living in the country’s islands. By dispersing the location of our mills to developing economic hubs such as Batangas, Cebu, Davao and CDO, SteelAsia eliminates expensive shipping costs and helps boost construction activities. Localized mills also minimize the carbon footprint of our industry by eliminating fuel consumption associated with inter-island shipping.
Even Metro Manila benefits as well. Locating mills outside of the capital is being part of the solution; more than 75% of our raw materials and steel products do not use the Manila ports and road network. We are proud to be part of logistic solutions to Metro Manila’s nagging port and road congestion problems.
We can find more solutions by looking at developed countries. Cutting and bending rebar in a factory setting instead of at construction sites is a best practice, and in some cases even required by law in developed countries. Construction sites stand to benefit from the safer, decongested work environment, and minimal rebar handling and wastage saves building costs. We have brought these value-added methods and technologies to the Philippines and look to grow five-fold our existing cut and bend capacity within the next two years.
The SteelAsia Group was founded by my father, Benito Yao, in 1966. His partner then, Mr. Go Kim Pah is now also represented by his children in the company. Our new mills are the legacy of our founders and represent the faith of SteelAsia in Filipinos and our country’s future. We continue this with our ongoing expansion projects; our Plaridel mill, which is intended to serve the Northern Luzon plain, and our Cebu mill, which will address the phenomenal Visayan economic growth. We look to the Southern Tagalog region as tomorrow’s new growth area and will respond to meet its needs. The Philippines is at a very early stage of development and much still needs to be done. New needs of tomorrow could require more steel mills, diversified steel products, upstream and downstream integration, and better technologies. Our commitment is to raise the bar, and we can be counted on to be part of the solution.