Olongapo SubicBay BatangGapo Newscenter

Wednesday, October 01, 2008

Global shipbuilders mull plants here but steel supply inadequate

Global shipbuilders are seriously considering of expanding their operations in the country but are faced with problem of availability of supply of steel plates because the country’s lone producer, Global Steel Philippines (SPV-AMC) Inc., could not meet with their required specifications.

Trade and Industry Undersecretary Elmer C. Hernandez, who is also managing head of the Board of Investments, said there are two keen investors – an Australian-Filipino joint venture and a Singapore-based company.

"But the main concern of these investors is the availability of supply of steel plates at their own specifications," Hernandez said.

The Australian-Filipino joint venture shipbuilding firm is using Australian technology and has a shipyard project here while the Singaporean-based shipbuilder is a new investor.

The new trend now is to build ships using longer and wider steel plates to minimize welding but GSPI is producing smaller and shorter steel plates only.

"So, this is a challenge. GSPI needs to retrofit and invest more to meet the specifications of these shipbuilders because shipbuilding is moving away from traditional shipbuilding hubs and moving to the Philippines. We should take advantage of that. Now, can GSPI face up to the challenge?" Hernandez said.

Investors, however, noted that it is not yet economically viable for GSPI to invest in retrofitting at this point because demand for the bigger specifications for steel plates for shipbuilding is still limited.

"But GSPI should be looking forward to this new trend in shipbuilding," Hernandez said.

Hanjin, the country’s biggest shipbuilder located in Subic freeport, is importing steel plates from Korea.

GSPI opened its plate steel mill operation in July this year with an initial monthly production of 20,000 metric tons and said they would serving shipbuilding and other construction industries.

GSPI managing director Lalit Kumar Sehgal said the production of steel plates would enable the country to save million per month in foreign exchange as the country will no longer be totally dependent on steel plate imports.

Steel plates are used in various applications such as construction equipment, shipping and drilling platforms, pipelines, tunnel supports and excavator shovels.

At present, the country is importing over 72,000 metric tons per annum from Russia , China and Ukraine for commercial grades and from Japan , Korea , Europe for high-tensile special grades.

The company’s entry into the steel plate market is advantageous to consumers since they will benefit in terms of competitive pricing, savings on freight cost and quick technical service without compromising on quality, GSPI said.

This plate mill was in line with our stated strategy of fully rehabilitating the assets of National Steel, as provided for in the Asset Purchase Agreement.

"We think the consumers deserve a choice wherein Global Steel’s marketing plan will emphasize on quality, pricing and quick after-sales service," Sehgal said.

The steel plate production is the third product of GSPI after the Indian-owned firm successfully rehabilitated the formerly National Steel plant, which was mothballed in 1999 and reopened in 2004.

An official privy to the reopening of the plant placed GSPI’s total investment at 0 million for the rehabilitation of the HRC, CRC and now the steel plate mill. GSPI is now the country’s largest producer of flat steel products.

Sehgal said the company’s consolidation efforts in the domestic and international market continues wherein GSPI exports 70 percent of its production to the overseas market and 30 percent to the domestic market.

So far, GSPI exports to neighboring South East Asian & Pan Asian countries. For the overseas market, GSPI targets Vietnam , Korea , Indonesia and India which imports over 700,000 MTPA of flat steel.

The sales volume in the first six months of Jan- June 2008 has increased by 27% ($ 143.7 million: 183,211 MT) compared to (144,000MT : $ 96.5 Million ) of January- June 2007.

The company has ambitious plans to ramp up sales volume to over 400,000 MT for FY 2008 including the launching of tinplates sometime this year.

Sehgal further said the company has remained committed to its plan to set up the integrated steel plant in Philippines with a project capital outlay of US$ 1.60 billion and with a production capacity of 3.6 million tons per annum (TPA) slabs.

This project will generate over 35,000 direct and indirect job opportunities. The said project is under consideration by the Board of Investments. Manila Bulletin

Labels: , , ,


Post a Comment

<< Home


This is a joint private blog of volunteers from Subic Bay. It is being maintained primarily to collate articles that may be of importance to decision making related to the future of Subic Bay and as a source of reference material to construct the history of Subic Bay.

The articles herein posted remains the sole property of original authors and publications which has full credits to the articles.

Disclaimer: Readers should conduct their own research and due diligence before using any article herein posted for whatever intended purpose it may be. This private web log will not be liable for any loss or damage caused by a reader's reliance on information obtained from volunteers of this private blog.

www.subicbay.ph, http://olongapo-subic.com, http://sangunian.com, http://olongapo-ph.com, http://oictv.com, http://brgy-ph.com, http://subicbay-news.com, http://batanggapo.com 16 January 2012