The plea to prioritize native produce over imports has gone louder as one other home manufacturing trade has known as on authorities to prioritize native cement procurement amid declining profitability.
Native cement gamers are asking the federal government and the personal sector to patronize and assist home cement moderately than imported ones stating their profitability has suffered for the reason that pandemic and the inflow of cement imports, significantly from Vietnam.
Cement is the second home trade on this pandemic interval to return out pleading for presidency assist. The primary was native manufacturing corporations that repurposed their factories into meeting strains for private protecting gear (PPEs) to provide authorities requirement throughout this pandemic solely to be left with underutilized capacities.
“We’re crying out to each authorities and to the personal sector — Division of Public Works and Highways, particularly, to patronize domestically produced cement,” mentioned Reinier Dizon, president of the Cement Producers Affiliation of the Philippines (CeMAP), on the joint listening to of the Senate committees on financial affairs, and commerce, commerce and entrepreneurship.
Dizon made this enchantment as he burdened that native cement producers have sufficient capability and there’s no want for importation. He, nevertheless, certified that he was not saying that DPWH just isn’t shopping for native cement, however moderately a common enchantment to each authorities initiatives and the personal sector to patronize native produce.
Based on Dizon, the cement trade has been slowed down by the pandemic and the inflow of imports. He mentioned that through the first Enhanced Group Quarantine (ECQ) final yr, they weren’t allowed to function for a complete of two and a half months, particularly for crops situated in Luzon. This time, nevertheless, regardless of the ECQ and MECQ standing, the trade has been thought-about as important and working now at 100%.
The pandemic has additionally resulted in slower cement consumption. He mentioned that cement demand within the nation shrunk by 10 p.c. Pre-COVID, Dizon mentioned, the native cement trade had been rising at 6-7 p.c yearly previously 10 years.
Regardless of this example, the home market is flooded with imported cement.
He estimated roughly 5 million metric tons of cement from Vietnam entered the Philippines final yr. Regardless of the decline in native cement demand final yr, he mentioned, there was no indication of a slowdown within the surge of cement importation from Vietnam, which accounts for 90 p.c of the nation’s complete cement imports.
Based on Dizon, Vietnam has estimated put in manufacturing capability of 120 million tons however their home cement demand is just half of that. Thus, leading to a 50 p.c extra capability that they’ll use to dump cement to different international locations, significantly the Philippines.
“It’s just a bit bit tough for us as a result of have been requested to cease. However they have been nonetheless persevering with to export to the Philippines,” he mentioned.
By way of pricing, Dizon denied reviews that they’re method far costly than the imported cement. “I don’t consider so,” he mentioned stressing their costs are comparable with the imported ones.
Adjusted to inflation even for the previous 10 years, Dizon mentioned their costs have all the time been aggressive in opposition to imports.
However he surmised that Vietnam might need a distinct price construction most likely because of the nation’s decrease electrical energy price.
He defined that apart from being a capital intensive trade, cement manufacturing can be energy intensive with electrical energy accounting for 70 p.c of price. The Philippines has the very best electrical energy charge within the area, second solely to Japan.
“We’re all for degree enjoying area, however we simply need a wholesome and honest competitors,” he added.
In a remark, Senator Cynthia Villar, whose son is DPWH Secretary Mark Villar, mentioned she was not talking for the federal government company, however for her family-owned enterprise as they’re huge person of cement. The Villar Group is a number one conglomerate within the nation with pursuits in varied property developments, retail, and banking. Villar mentioned that primarily based on what she has gathered, the value is the issue within the native cement trade.
Villar mentioned imported cement remains to be cheaper regardless of the safeguard obligation imposed on the imported product. As such, customers are shopping for the cheaper imported product.
“I don’t suppose firms will import cement if they’ll purchase cheaper right here within the Philippines, that isn’t logical,” she added mentioning that native cement corporations can’t blame customers in the event that they purchase the cheaper-priced imported cement if the native product just isn’t aggressive. She added that the one factor the Senate may give to the home trade is tariff safety, identical to what they did to rice.
However Dizon insisted their costs are aggressive with that of Vietnam stressing “It is rather comparable.” Actually, he cited a Philippine Statistics Authority information displaying that the patron worth index of concrete and cement has been decrease than inflation or simply a rise of two p.c. “So, our domestically produced cement may be very inexpensive,” he mentioned.
This prompted Sen. Imee Marcos, Senate committee chair on financial affairs, to request for information on the native cement corporations’ worth construction versus the imported.
“As Senator Villar has said, we’re all for purchasing native on a regular basis however now we have to be aggressive,” she mentioned.
Each Villar and Marcos cited complaints that the cement trade is a cartel given such eventualities of simultaneous hikes and discount in costs, and lack in provide.
Dizon vehemently denied such allegation stressing that the 9 cement producers are engaged in a moderately wholesome aggressive setting. In addition they positioned for the rising building and infrastructure actions within the nation, he mentioned. The federal government has enormous budgetary allocation for its Construct Construct Construct infrastructure program.
Meantime, client group Laban Konsyumer Inc. president Victorio Mario Dimagiba mentioned that imported cement is definitely cheaper by 15 p.c versus the native produce.
“We’re against the tariff safety in types of safeguard or dumping duties which might be tacked on to the price of the cement and the customers pay for them in the long run,” he mentioned.
The Division of Commerce and Business has imposed safeguard obligation on imported cement since 2019 to curb the surge in importation. The DTI can be mulling for the imposition of dumping obligation on imported cement from Vietnam.
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