Global Ferronickel Holdings Inc., the second largest nickel producer in the Philippines, said it plans to start constructing a $20-million steel manufacturing plant this year.
GFNI president Dante Bravo said in an interview following the annual stockholders’ meeting the company was in the process of acquiring a property in Central Luzon as a potential site for the steel plant.
The steel manufacturing facility will be 51-percent owned by GFNI. Its joint venture partner Huarong Asia Limited, a Hong Kong-based company, will own the remaining 49 percent.
GFNI will have a 60-percent interest in the land where the plant will be located, while Huarong will own the remaining 40 percent.
The proposed plant is expected to have a production capacity of 600,000 metric tons of rebar steel serving the domestic demand.
The proposed plant will be completed over the next two years. Bravo said the project would be funded through internally generated funds.
GFNI said that given the fast-growing steel demand in the country propelled by local infrastructure developments, it was exploring value-added opportunities by diversifying into steel processing.
Huarong is headed by a veteran businessman with more than 25 years of experience in the stainless steel business.
GNFI reported a net income of P510 million in 2018, down 34.6 percent from P780 million recorded in 2017 as the company had to contend with higher taxes and an increase in operational costs.
Revenues also dipped 5.7 percent to P5.5 billion in 2018 from P5.8 billion in 2017 on weak nickel oil prices in the world market.
“The overall weakness of nickel ore prices led the company to focus on selling higher grade ores and order an early finish of mining operations, shipping a total of 5.7 million wet metric tonnes of nickel ore, which is 4.4 percent lower as against 2017 figures,” the mining firm said.
The company said it expected the demand for nickel ore to remain robust given the increasing demand from stainless steel manufacturing companies.
It said the increasing advocacy on green energy would fuel the increase in electronic vehicle production, which is an incremental demand for nickel.
The share price of GFNI closed unchanged at P1.49 Wednesday.