The Cement Producers Affiliation of the Philippines (Cemap) denies the existence of cartels within the cement business amid issues over native merchandise which are priced greater in comparison with imports.
“Wala po [None],” Cemap President Reinier Dizon stated throughout a Senate committee listening to on Tuesday when requested to make clear in regards to the cartels amongst native cement makers.
Sen. Cynthia A. Villar stated the native cement sector ought to “right” the “impression” that there are cartels fixing the value of the cement at the next value in comparison with imports, that are largely from Vietnam. Consequently, she defined that patrons are prone to buy imported cement as a substitute.
Worth-fixing by cartels is an anti-competitive follow whereby competing companies agree to regulate the costs, which often lead to greater charges for the customers. It’s punishable by administrative fantastic and imprisonment in line with the Philippine Competitors Act.
“Are we priced so excessive? I don’t consider so. Primarily based on the [inflation data] …cement has all the time been aggressive,” Dizon argued, noting that the buyer value index for concrete and cement solely confirmed about 2- % enhance.
Whereas Dizon stated he can’t talk about the pricing coverage of the cement producers, he advised the committee to take a look at the entire image in terms of that side.
For instance, the Cemap official defined that Vietnam has decrease electrical energy prices, which permits it to promote their merchandise at a cheaper price tag.
The cement manufacturing sector, he defined, is “energy-intensive” that 70 % of the manufacturing value is accounted for by gas and electrical energy.
As well as, Dizon shared that organising a facility requires substantial funding. A cement manufacturing facility with a 1 billion ton capability will want funding amounting to P5 billion to P10 billion, he stated.
Final yr, the 9 cement manufacturing companies within the Philippines struggled to deal with the impression of the lockdown protocols, Dizon stated.
The cement sector needed to shut down vegetation, particularly in Luzon, for over two months final yr in the course of the onset of the pandemic because it was not tagged as a necessary business. However he defined that the cement vegetation have been in a position to restore to one hundred pc operations because the restrictions eased.
The demand for cement additionally declined by 10 % final yr, Dizon stated.
He famous that cement demand has been rising yearly of about 6 % to 7 % previous to the pandemic. The native gamers, he added, have been even frequently investing in further capability.
“Many cement firms, they’re publicly listed, they introduced declining profitability final yr,” he lamented.
Including gas to the hearth is the continual importation of cement—90 % is from Vietnam—within the Philippines, Dizon stated.
He stated that cement import from Vietnam didn’t decline final yr, reaching about 5 million tons.
This was doable, he defined, as a result of Vietnam was in a position to function its cement manufacturing amenities final yr because the native factories briefly closed resulting from lockdown measures.
Dizon stated Vietnam has capability of 120 million tons however demand is barely half of it, leading to oversupply.
With this, the Cemap official known as for the federal government and personal sector to have “patronage” over regionally produced cement, noting the home sector has sufficient capability to provide the nation’s demand. “Simply to make clear, we’re not saying that the DPWH [Department of Public Works and Highways] or authorities tasks…don’t purchase native,” he added.
Final month, the Division of Commerce and Trade (DTI) introduced its anti-dumping investigation on cement imports from Vietnam.
This, after Cemex Philippines, Holcim Philippines Inc. and Republic Cement Builders and Constructing Supplies Inc. filed a criticism claiming that cements from Vietnam are imported at “dumped costs,” which hurts the native business.
DTI famous that the interval of investigation (POI) for dumping is from July 2019 to June 2020. The POI of damage is from 2017 to June 2020.
The Anti-Dumping Act of 1999, or the Republic Act 8752, is in place to guard the native business from being materially injured by the dumping of articles imported into the nation.
“An exporting firm is alleged to be ‘dumping’ when exporters promote their product to an importer within the Philippines at a value decrease than its regular worth and is inflicting materials damage to a home business producing like product,” DTI stated in its website.