MANILA, Philippines — One of the world’s largest steel makers from China, HBIS Group Co. Ltd. is set to invest $4.4 billion to build an integrated steel complex in Mindanao.

During the signing of the memorandum of understanding (MOU) yesterday for the implementation of the project, Trade Secretary Ramon Lopez said the amount to be spent by HBIS would be the biggest industrial investment from China to the Philippines.

The MOU was signed by HBIS chairman Yu Yong, Huili Investment Fund Co Ltd. chairman Meng Xiaosu, Steel Asia Manufacturing Corp. chairman and chief executive officer Bejamin Yao, Defense Secretary Delfin Lorenzana, and Board of Investments managing head Ceferino Rodolfo.

HBIS, a wholly-state-owned company in Shijiazhuang City, Hebei Province, is the second largest steelmaker in China and third largest in the world, producing appliance grade and automotive grade steel products.

Huili Fund, meanwhile, is a private equity firm based in Beijing, China, specializing in investing in real estate, finance and industries with a competitive edge.

Steel Asia, a top rebar producer in the Philippines, has six production units located in Luzon, Visayas, and Mindanao.

The project to be implemented by the parties, will occupy a 305-hectare land inside the PHIVIDEC Industrial estate in Mindanao. It will have facilities related to port operation, sintering, coking, pelletizing, iron-making, steel-making and steel rolling.

Phase 1 of the project covers the production of 4.5 million tons of hot rolled coils (HRC) and 600,000 tons of slabs with $3 billion worth of investments, while phase 2 involves increasing the steel manufacturing capacity to eight million metric tons.

Construction and ramp-up period of the project is expected to take three to five years.

Lopez said the project would create 10,000 jobs in the first phase, and about 40,000 jobs in the next phase.

“This project is very important to our industrial development and will allow us to pursue President Duterte’s vision of having a globally competitive integrated iron and steel industry, to support the growing economy, alleviate poverty and to create jobs for every Filipino,” Lopez said.

He said the project would also help reduce the trade deficit by as much as $2.3 billion in phase 1 and up to $4.4 billion in succeeding phases.

“With this integrated steelmaking facility, the country will be able to capture a large part of the value [chain] for the manufacture and assembly of appliances, automotive assembly, construction materials, shipbuilding, heavy equipment manufacturing, among others,” he said.