Despite steel venture, FNI has no plans to become major market player
MANILA, Philippines – Listed mining firm Global Ferronickel Holdings, Incorporated (FNI) has no plans to be a major player in the local steel industry despite its venture into making steel rebars.
Even as it banks on the large demand for steel in the country leading to import dependence, FNI president Dante Bravo said the company will be held back by a number of factors.
"The market is 10 million metric tons (MT). We only want to supply 5%, the others are basically [taking up] 95%. We're [that] small," Bravo said on Wednesday, June 26. (READ: Global Ferronickel, China's Baiyin eye stainless steel plant)
Aside from high energy costs, the company will import billets from China given the lack of raw sources in the country. Making billets locally will also mean additional expenses for a project that is set to receive only $20 billion in capital expenditures.
FNI's plant, which will turn imported billets into carbon steel rebars, is expected to be built in Luzon and will have a production capacity of 600,000 MT per year. Bravo said it will take two years before they can begin operations.
Bravo also said they will be shelling out 51% of the overall expenses needed for the venture while their partner, Hong Kong-based firm Huarong Asia, Limited, will cover the remaining 49%.
However, Bravo said they are still entertaining the idea of having billets made locally.
"We can go into that.... There is an opportunity. We can create jobs, make additional revenues, and better bottom line," he added. – Rappler.com