MANILA, Dec. 14 (Xinhua) -- Chinese firms Hebei Iron & Steel Group (HBIS Group) signed a memorandum of understanding (MOU) on Friday with Philippine Steel Asia Manufacturing Corporation to develop an integrated iron and steel plant costing 4.4 billion U.S. dollars in the southern Philippines.

The Chinese embassy in the Philippines said in a statement that HBIS Group, Philippine Steel Asia Manufacturing Corporation and other companies are about to launch the "Philippines Iron and Steel Project" and to set up an investment consortium which will build an integrated iron and steel plant.

The integrated iron and steel plant will occupy a 305-hectare land inside an industrial zone for the heavy industries in Cagayan De Oro, a city in the southern Philippines. The construction period of the plant is scheduled to span from three to five years.

Philippine Trade Secretary Ramon Lopez said on Friday the project "is very important to our industrial development" and "will boost the Philippine manufacturing sector, create jobs and increases the production capacity to support the growing domestic demand and export requirements."

The project, which costs 4.4 billion U.S. dollars, is the largest Chinese industrial investment in the Philippines to date, according to Lopez.

"This milestone is also a result of a stronger relationship between the Philippines and China," Lopez added.

After construction, the integrated iron and steel plant will cover a production of eight million tons of basic irons and steel products every year, which can be made into metal sheets, nails, paper clips, and construction-grade products such as wire rod and wire mesh.

As a fast-growing economy in Southeast Asia, the Philippines has a huge demand for iron and steel.

Philippine government statistics show that iron and steel is the Philippines' fifth import by commodity group, which is valued at 4.91 billion U.S. dollars from January to October 2018 with a growth of 39.4 percent from 2017.

Jin Yuan, the Commercial Counsellor of the Chinese embassy in the Philippines, said the Philippines Iron and Steel Project is a very important follow-up implementation in the cooperation between China and the Philippines under the Belt and Road Initiative.

According to the Philippine Department of Trade and Investment, the iron and steel production base is projected to provide indirect job opportunities up to 65,000 to related businesses for local workers.

HBIS Group, located in Hebei Province of the northern part of China, is one of the largest steelmakers in China. It is a major player in producing appliance grade and automotive grade steel products.

Philippine Steel Asia Manufacturing Corporation has been a top rebar producer in the Philippines with six production units located in the Philippine main Luzon island, the Visayas in the central Philippines, and in the southern Philippine island of Mindanao.