Cathay United extends financing to SteelAsia Manufacturing Corp. - -
(L-R) Rafael Hidalgo, president and co‑chief operating officer at SteelAsia Manufacturing Corp.; Benjamin Yao, chairman and chief executive officer; Matt Liu, senior vice president and head of the CSD‑ESG team at Cathay United Bank; and Tony Chao, senior vice president and general manager of Cathay United Bank – Manila Branch.
SteelAsia Manufacturing Corporation, the country’s largest steel manufacturer, has secured a PHP1.25 billion green loan from Taiwan-based Cathay United bank to support the company’s expansion into green steel manufacturing.
The Yao-owned steel company is using environmentally-friendly electric arc furnace technology. Combined with renewable energy and scrap recycling, this process enables the production of low CO2 emission green steel.
Its Calaca mill has been producing green steel production since 2008, and has been assessed by DNV of Norway as one of the greenest steel facilities in the world, with a carbon footprint of approximately 90 percent lower than the global average for traditional steelmaking.
The Philippine’s flagship steel manufacturer is set to replicate this low CO2 emission methodology for its upcoming mills, including the country’s first medium sections mill in Lemery, Batangas, which is expected to commence operations within the year.
The green loan is the company’s first facility enabled under its Sustainable Finance Framework, which was rated by Moody’s as among the best globally for steel in February. The framework serves as a guide to ensure the consistent application of clear sustainability objectives, transparency, and strong corporate governance in the use of proceeds.
This deal also marks a milestone, making SteelAsia Manufacturing Corporation the first steel company in the Philippines to secure a green loan from Cathay United Bank, and representing the Bank’s first overseas green loan with a steelmaker.
“The green loan represents more than a milestone for the company—it is a sign that we are indeed on the right track in our expansion strategy. Steel production with low CO2
emission is not only sustainable for the environment, it is also the foundation upon which we are building the country’s steel industry,” said SteelAsia President and Co-Chief Operating Officer Rafael Hidalgo.
“We thank Cathay United Bank for the trust and the recognition of what SteelAsia aims to accomplish through green steel production and for the Philippine industrial sector,” he added.
As one of the largest rebar producers in Southeast Asia, with four rebar mills across the archipelago, Steel Asia estimates it supplies around 80 percent of all infrastructure, high-rise and other heavy construction in the country. SteelAsia’s expansion plans involving new green steel mills in Batangas, Quezon, and Tarlac in the next four years could avoid 7 million tons of CO2 emissions per year.
Meantime, Tony Chao, Senior Vice President and General Manager of Cathay United Bank – Manila Branch said, “Cathay United Bank is proud to be part of these initiatives. We are driven to further strengthen our sustainable financing partnership with SteelAsia, as we share a common mission and set of goals. We look forward to our shared success in this endeavor.”.
Since its establishment in 2015, Cathay United Bank – Manila Branch has been a pioneer in ESG. It was one of the first banks in the Philippines to launch a Sustainability-Linked Loan in 2022 and has since expanded its green and social portfolio to include Sustainable Time Deposits.
