Published
SteelAsia, the
country’s largest rebar manufacturer, has remained competitive using
low-energy-consumption technology, contrary to widely held views that high
power cost is among the many deterrents to a fully competitive manufacturing
sector.
“While others have been
expanding capacity by using obsolete technology from abroad, we have always
relied on the newest and most modern equipment for our mills,” said SteelAsia
assistant vice-president for corporate communication Ma. Teresa Pacis.
That has made SteelAsia
both more competitive and economically viable in the long run, she said.
The company’s five
steel mills – two in Luzon, one in Visayas and two in Mindanao – consume more
than 30 million kilowatt-hours (kWh) a month. Nearly three-fourths of that come
from renewable energy sources, particularly geothermal and hydropower.
That compares with 1.7
billion kWh consumed by both residential and industrial users in Cebu in 2015,
according to data from the National Economic and Development Authority.
With its demand
profile, SteelAsia is able to negotiate for competitive rates.
Among the mechanisms it
has efficiently maximized is the “time-of-use pricing,” which reflects the cost
of electricity at any particular time of the day. The company’s rebar
mills operates 24/7 and uses electricity with minor fluctuations. Its recycling
plant, meanwhile, operates and consumes power during off-peak hours to avoid
grid system peak demand.
Pacis said while power
remains a huge component of manufacturing costs, “our experience shows that
this is not a hindrance to growth.”
“There are many ways to
achieve efficiency in business operations, aside from cheap power rates or fuel
costs. Our experience has shown that power is a cost parameter that can be
continually improved.”
SteelAsia supplies the
country with some 2 million tons of rebar annually. It is currently expanding
to integrate upstream with an additional 1.7 million tons of steelmaking
capacity, and 3 million tons of rolling mill capacity – producing rebar and
import substitute products such as beams, channels, wire rods, and merchant
bars.
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