The state-run Development Bank of the Philippines (DBP) has signed a PHP 5.7 billion ($117.83 million) long-term loan agreement with Compostela Steel Inc., a subsidiary of the Philippines’ largest steel producer SteelAsia, for the construction in Compostela, Cebu, of what will be its biggest steelmaking facility, according to a bank official.
Under the agreement, the loan proceeds will be used to partially finance the Compostela Works Rolling Mill, with parent company SteelAsia, investing the balance of the required total capital amounting to PHP 8.3 billion ($171.58 million).
It is said that the plant will have a wire rod production capability of 800,000 mt. The mill is expected to meet the growing demand of the Visayas region, while generating up to 3,000 jobs. The bank’s credit support to the company will help the local construction industry and boost local steel production.
The Philippines is not currently producing wire rod domestically and relies on imports from Malaysia, Indonesia, Vietnam and China, which reach $350 million worth of wire rods annually, as SteelOrbis understands.