Filipino steel magnate Benjamin Yao: From a mill worker at age 17, to CEO
Philippine steel giant: How SteelAsia forged a rapid growth path
Manila: How do you build in an earthquake and typhoon area?
The Philippines is hit by typhoons regularly and sits in the “ring of fire”, jolted by earthquakes (averaging 20 tremors per day, according to the Philippine Seismic Network).
Filipino industrial magnate Benjamin Yao, has a straight, simple answer: Build with quality. That's how he's grown his empire helping form a nation, one steel bar at a time.
His resilience is forged by a nearly six-decade journey. His father, Benito Yao, founded in 1965 what would later become SteelAsia. Benjamin Yao learnt the ropes early in life.
At age 17, he started as a factory hand in the steel manufacturing plant by day – and attended classes at the University of Santo Tomas by night.
In the 1980s, he took a more prominent role. Today, as chairman and CEO, Yao is at the helm of SteelAsia Manufacturing Corp. (SAMC), which produces 3 million tonnes of rebar per year, and accounts for about 80 per cent of the loal market.
Rebar is in the lowest tier of the steel manufacturing, considered a commodity. Yao's ultimate goal: take it further, go into wire rods, steel beams, sheet piles and shapes. In Lemery, Batangas, about 100km south of Manila, Yao is now building the country’s first steel beam manufacturing facility, with 600,000-tonne capacity per year.
Empire builder
Yao recognised early on the limitations of outdated technology used by small Philippine steel mills then. He focused on modernisation, thereby pushing SAMC to become the country's largest steelmaker, and emerging as Southeast Asia’s largest rebar manufacturer.
The company currently has six steel mills spread all over the country – Bulacan, Cebu, Davao, and Misamis Oriental. These plants, strategically located, ensure wide distribution and accessibility of their products across the 7,640-island archipelago. Three more SAMC steel mills are in the works, worth about $500 million each.
Season of testing
Yao's mettle was tested in tempestous times. The Philippine economy tanked in the early 1980s. The once-mighty National Steel Corp (NSC), formed in 1974, and once the largest steel mill in Asia, fell into mismanagement, was privatised in 1995 and eventually went belly-up in 1999.
In an interview with local media, Yao said the country was left “orphan” when NSC went bankrupt. “This industry, unfortunately, is very tough for the private sector,” he said, pointing out how governments in Asia initially bankrolled their own steel manufacturing sectors.
Cars, ships, appliances, tools, and even everyday items like screws and nails all incorporate steel components. The steel industry provides the essential materials that keep manufacturing sectors thriving.
On the right track
In the midst of disruptions, and despite the relatively high cost of unsubsidised electricity in the country, Yao has steeled his resolve. He methodically built the family company, constantly updating. He successfully navigated the troubled waters surrounding the Asian financial crisis that hit in 1997, the global financial crisis of 2008, and more recently, the pandemic.
“It taught us to survive,” said Yao, honoured as the Philippines' Entrepreneur of the Year in 2019. It was the resilience he learnt on the job that helped the company thrive.
Rebars
3 million: Metric tonnes of finished steel per year
42.4 billion pesos: Net revenues in 2021
2,605: Number of employees by end-2023
6: Number of SteelAsia manufacturing facilities (3 more under construction)
Rebars are vital components in construction projects. SteelAsia recognised this, and built a network of modern steel plants by harnessing technology, directly employing more than 2,600 people today.
Realising the industry was inefficient, he decided to modernise the process and earn the respect of customers for his devotion to quality. In 1996, he traveled to Singapore to partner with NatSteel, bringing the best technology to SteelAsi and bringing in expertise from Europe. This allowed him to attract top talent and grow significantly.
Under his leadership, Yao has bolstered rebar production, which jumped from 279,000 tonnes a year in 2006 to 1.2 million tonnes a year by 2013, capturing more than half of the market share; to 3 million tonnes today. He's s not done yet, as the company is on track for a dramatic expansion, while talk of an initial public offering (IPO) is on the cards.
Vision: 10x growth
Yao is focussed on an accelerated growth, primarily by investing in precision automation and equipment.
A $130-million investment in Bulacan, a province just north of Manila, saw a 1.2 million-tonne capacity rebar mill in 2015, allowing the company to pay a key role in subsequent major infrastructure projects.
The company also invested $100 million in an 800,000-tonne capacity mill in Cebu, in central Philippines, which rolled out rebars in 2016. This expansion anticipated steel demand for Visayas reconstruction efforts.
In 2017, SteelAsia signed a $250-million long-term supply deal in Russia with Evraz, one of the top steel producers in the world. The agreement guarantees a monthly supply of 50,000 tonnes of semi-finished steel, also known as "billets", for SteelAsia’s rolling mills in Davao City and Meycauayan, Bulacan. Billets are the input material for many long steel products, including rebars.
Given his bold ambitions while leveraging Wright's Law, he wants to grow his payroll four-fold, and production 10-fold.
Building boom
There's room for growth. The Philippines construction market size was estimated at $65.2 billion in 2023, hitting a growth rate of 7 per cent during 2025-2028. The government's focus on infrastructure is seen supporting market expansion in real terms in 2024.
Over the next 15 years, the Philippines is set to be the fastest-growing construction market, averaging over 6 per cent growth per annum, according to Oxford Economics and Aon. The Asian country also aims to attract Php31 trillion ($527 billion) clean energy investments by 2040, according to the Department of Energy.
SteelAsia is the company behind the rise of self-contained communities such as the Bonifacio Global City (BGC), one of the Manila's high-rise blocks. It is also involved in significant projects – supplying materials for "skyways", metro lines, mega bridges and the Philippines' first subway system.
From skyscrapers and bridges to houses and factories, steel provides the strength, durability, and versatility needed to construct the framework of the modern world.
Despite rapid growth, maintaining company culture has been a constant challenge. “We’ve always been growing so fast,” Yao explained. He envisions an even faster growth for the Philippines, thereby lessening the need for thousands of his countrymen to find work overseas. “It’s all about inclusivity,” he said.
The company already operates several steel manufacturing facilities in Bulacan, Cebu, Davao, Batangas, and Misamis Oriental, thus ensuring wide distribution and accessibility of their products nationwide.
With multi-billion investments in three additional manufacturing failities, SteelAsia will soon rollout wire rods, steel beams, sheet piles and shapes, thus curbing dependency on imports.
“There’s a real opportunity here for significant growth,” Yao said, who sees building more capacity and greater circularity as a way out of import dependence, and supply chain shocks.
Yao is seen as a steady hand in the local steel industry, with outsized ambitions who knows how to mobilise capital. Despite the pandemic, SteelAsia did not stop construction of a new facility in Cebu after breaking ground in 2020. It was completed in 30 months.
In May (2024), the company produced the first steel bar in its Cebu steel mill, with commercial operations seen starting this month (June). The state-owned Development Bank of the Philippines (DBP) funded the project through a long-term loan agreement in 2020 amounting to Php5.7 billion ($97 million).
At full production, the new Cebu facility it will create 500 direct and 2,500 indirect jobs.
Strategy: Import substitution
SteelAsia is on track to reinforce the Philippines' significant infrastructure growth. Yao has been a vocal advocate of import substitution as a whole-of-nation approach.
Phase 1 of SteelAsia's five-year development plan includes a Php100 billion ($1.7 billion) investment to install mills for producing various steel products.
There's a good reason for it: The Philippines currently imports over 8 million tons of steel annually, including beams, sheet piles, wire rods, billets, and plates.
In 1991, the Philippine Bureau of Product Standards mandated a standard for rebar to ensure it has the strength and physical characteristics needed for structural integrity during natural disasters.
This standard, known as PNS49 (Philippine National Standard), must be followed by all manufacturers, importers, sellers, distributors, and users of rebar. It aligns with ISO 9001 and includes the specific requirements for seismic or earthquake-proof rebar.
To meet the stringent PNS49 standard, SteelAsia invested n precision automation and equipment ensure consistent adherence to the standard.
These technologies have earned the company certifications such as ISO 9001 (Quality Management), ISO 17025 (Quality Testing Laboratory), and UK Cares (British Standard Conformity).
Except for billets, all these products are 100 per cent imported. By building more capacity, Yao’s ultimate goal is to leapfrog the supply gap for the country to be self-sufficient for its steel needs.
60,000
It's a high bar for a relatively small player (Baowu, China's steelmaking giant, has an annual capacity of around 125 tonnes). But Yao is undeterred. By reducing the export of raw materials and the import of finished goods, Yao reasons that it will not only boost local steel production and create more jobs, but will also cushion any future shocks in global supply chains.
More to it, he figures the move will help save the country around $4 billion a year – while preserving value within the country.
Such an expansion will create over 60,000 new jobs — 10,000 within the company and an estimated 50,000 in support industries.
Yao also shared an important detail: in their steel mills, around 80 per cent of the positions do not require college degrees. As the company invests in community training, this pays back with a strong, intact workforce that preserves organisational learning.
Job generator
“Many positions such as machine operators, crane operators, and forklift operators require skills that can be provided through our training,” Yao said.
“When we set up regional mills, we hire the local workforce from within the community, who typically do not have experience in heavy industry, let alone in steel."
Many young local engineers join the workforce each year, and the company develops them through training programmes, including ones in Europe.
"We also need engineers and specialist technicians," he said, adding the Philippines currently has a surplus of engineering and manufacturing professionals.
Additionally, many Overseas Filipino Workers (OFWs) working in steel mills abroad are waiting for opportunities to use their skills back home. “In fact, all of ours plant heads and many department heads in our mills are ex-OFWs who returned because of our expansions. We will continue this approach.”
As things stand today, the country is on the right track. “Life was hard in the past. The Philippine government is now supporting us fully on our expansion."
"We’re excited and very optimistic that in the next four years, we don’t have to import (steel) anymore and (many of) our professionals don’t have to be working in foreign countries.”
“We have high hopes for our country,” he said. “I have no doubt that we’re going to be very busy over the next decade.”