Extending the anti-dumping duty on cement imports is necessary for domestic firms to put into effect a roadmap for the competitiveness of the local industry amid the deluge of cheap imports.
Domestic producers also criticized the recent TC recommendation as potentially contributing to the depletion of the foreign currency reserves to $95 billion in September from $97.4 billion in August.
The Cement Manufacturers Association of the Philippines assailed yesterday the 5 October report of the Tariff Commission that recommended not to extend the safeguard measures on the local cement industry.
“CeMAP is saddened by the recommendation of the honorable TC to discontinue the implementation of the Safeguard Measure upon its expiry on 22 October 2022. The requested Safeguard Measure Extension was necessary for adjustment plans to be completed for the local industry to be ready for global competition,” CeMAP president Cirilo Pestaño said.
CeMAP said that it cannot hide its disappointment over TC’s decision, which has a great bearing on the industry’s expansion plans.
The industry will be constantly prone to further injury due to the impact of the dumping of imported cement, CeMAP added.
“The threat of injury to the local cement manufacturing industry remains imminent from neighboring exporting countries, which continue to this day to flood the domestic market with imported cement even with the safeguard measure enforced,” Pestaño added.
Definitive safeguard junked
The TC decision said, “the Commission recommends that the imposition of the definitive general safeguard measure on importations of Ordinary Portland Cement Type 1 and Blended Cement Type 1P no longer be extended.”
“The domestic cement industry has undertaken, and continues to undertake, considerable efforts to comply with its adjustment plans and is thus making positive adjustments to import competition,” the TC said.
The Commission said during the period under review from 2019 to 2021, the domestic cement industry maintained its market standing, increased its mill capacities, stabilized its manufacturing costs, and improved its profitability.
The TC decision also assumed the domestic cement industry has returned to profitability after its income from operations bounced back in 2021 to a pre-pandemic level P13 billion, with return on sales stabilizing at 13 percent, attributable to successfully executed cost-cutting and productivity-enhancing industry measures
“During the period under review, there was no significant overall impairment in the position of the domestic cement industry that constituted serious injury. There is no existence of an imminent threat of serious injury and significant overall impairment to the position of the domestic cement industry soon,” the TC said in its ruling.
Serious effect
This was contradicted by Pestaño, saying the local cement manufacturers have diligently made investments necessary to adjust.
“Most have been completed while others are earmarked for implementation, in-process, or are nearing completion. Moreover, additional new measures have been identified and are in the pipeline,” according to the CeMAP chief.
On the other hand, he maintained that “terminating the safeguard measure prematurely jeopardizes these efforts and undermines the painstaking work of the local cement industry to stay operational during the very difficult months of the still ongoing pandemic, wherein it continued implementing Adjustment Plan projects, employing jobs, and allying with government and economic stakeholders to jumpstart national recovery.”
Then Trade Secretary Ramon Lopez ordered the imposition of provisional anti-dumping duties on specific Portland cement brands imported from Vietnam, based on the results of a preliminary determination on the anti-dumping petition filed by Republic Cement and Building Materials Inc., CEMEX — Solid Cement Corporation/Apo Cement Corporation and Holcim Philippines Inc.
DTI legacy scrapped
DTI arrived at its decision in December 2021 to impose a punitive tariff after the preliminary determination that discovered nine out of 16 Vietnamese exporters of type 1 cement, and four out of 12 exporters of type 1P cement were found to have engaged in unfair practices that caused injury to the domestic cement industry.
Expiring on 22 October, the provisional anti-dumping duties on type 1 cement ranged from $1.02 per metric ton to $10.53 per MT, or 2.69 percent to 31.87 percent of the export price.
The nine exporters account for 82 percent of total imports of type 1 cement.
On the other hand, provisional anti-dumping duties on Vietnam’s type 1P cement exports had ranged from $1.16/MT to $12.79/MT or 3.8 percent to 29.2 percent of the export price.
These provisional duties are estimated to add P2.01 to P25.08 to the import cost of a 40-kilogram bag of cement but the DTI said the additional cost will not be passed on to consumers due to the strong competition in the market.