TKC Steel to spend P400M for blast furnace equipment

Publicly listed TKC Steel Corporation, which is seeking to do a follow-on offering, is set to establish the country’s first blast furnace in its steel production operations facility in Iligan. The company said it has earmarked P400 million for the purchase of the blast furnace equipment. In a statement, TKC said the blast furnace technology will double the company’s steel production output to 600,000 metric tons per year from the current 300,000 MT per annum. Presently, the company relies on limited supply of local steel scraps to produce molten steel for billet production. The new blast furnace equipment on the other hand, will utilize iron ore and coal, which are abundant in Philippine soils. "The facility will ensure a better consistency for molten steel as well as improve cost efficiency since the mineral is projected to be cheaper than steel scrap," TKC said. Anthony S. Dizon, TKC president and chief operating officer, said the equipment, which the company expects to start operating by the latter part of 2008, will be financed from proceeds of its follow on offering this November. TKC is the country’s leading manufacturer and supplier of steel billets. Earlier, it disclosed plans of selling up to 235 million shares via a follow-on offering at a price range of P8 to P11.50 per share. TKC is expected to raise up to P2.7 billion through the offering. The company operates the former largest billet producing facility in Iligan through Treasure Steelworks Corp. and the first seamless steal pipe plant in Southern China, Zhang Zhou Stronghold Steel Works Co. Ltd. TKC Steel is part of the Tiu Group of Companies that also owns several businesses in the financial servicing and hospitality and tourism sectors. Among them are iRemit, an overseas remittance services company, Sterling Bank of Asia and the Discovery Hotel Chain. - Cheryl Arcibal, GMANews.TV