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GLOBAL Steel Philippines Inc. (GSPI) will pursue its
billion-dollar plan to put up a backward integration facility in
Mindanao, the Department of Trade and Industry (DTI) said on
Wednesday.
On the sidelines of the 10th year
anniversary of Ford Group Philippines, Trade Secretary Peter B.
Favila told reporters that the Indian-owned company which acquired
shuttered National Steel Corp. will push through with its plan to
invest $1.2 billion to $1.5 billion for the new facility in its
Iligan City compound.
This project will be the first of
its kind in the country, Favila said, adding the expansion will
allow the company to produce all kinds of steel products for
quarrying and mining, enabling it to produce iron ore, which is the
base material of all steel products.
Citing his discussion with Binod
Mittal of the Mittal group during his recent official trip to India,
Favila said that GSPI is serious about investing more in the
Philippines. “But the problem with Iligan’s city council should
be settled first,” the DTI chief said, referring to the dispute
between the local government unit and the company on realty taxes
due.
“Lalit Kumar Sehgal [managing
director] of GSPI has asked the government’s intervention if this
won’t be settled between [them],” Favila said.
He said, “[once] the issue on
realty tax is resolved then Global [Steel] will be pursuing with its
investment, that is how they relayed it to the government.”
The trade chief said Omar Bryron
T. Mier, president of National Steel creditor Philippine National
Bank (PNB), has assured the government that the steel firm is not
suffering from financial difficulties.
“He said that [they] already
renewed their standby LCs [letter of credits],” Favila, also a
former PNB official, said.
Global Steel is eyeing to
complete the backward integration facility project in 2010.
Early this year, GSPI executives
disclosed that the company targets to double its annual sales from
$201 million to $513 million by end-December. They said the Iligan
City plant exports to Africa, Asia, Europe and Brazil and will
eventually tap the United States market.
--Katrina Mennen A. Valdez
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