Build up strength first

Unfair competition from imports is expected to worsen amid the trend towards a free market such as what is expected to be the carry-over effect of the Association of Southeast Asian Nations Economic Community to remove tariff barriers in the region.

Thus, local manufacturers are crying for partnerships with the government to build their competitiveness.

Cement makers, for instance, are working on convincing the Tariff Commission on the need for safeguard measures against imports for the local industry to complete their costly adjustment projects.

Removing the safeguard duty would be premature since it will expose Filipino enterprises to cheap imports.

The TC, nonetheless, had ordered the application of anti-dumping duties on specific brands of cement from Vietnam for the next five years which will offer a certain degree of relief to the domestic industry.

“Players are fulfilling their adjustment plans in investing and increasing capacity. There is certainly an imminent threat of serious injury as the country is naturally attracted by surplus capacity from its neighbors,” an industry official indicated.

An ideal intervention would be for safeguard measures and anti-dumping tariffs implemented together since both are remedies allowed under World Trade Organization rules.

The three major sources of cement imports are Vietnam, China, and Taiwan. Vietnam cement dominated the market with a 91 percent share of total imports in 2021.

Cement manufacturing was one of the few industries that maintained production in Vietnam during the pandemic years.

Vietnam is the largest cement producer in ASEAN and has an estimated total capacity of 149.2 million metric tons per year, with 79 integrated and 12 grinding plants as of last year. The integrated plants have a total capacity of 139.4 million MT per year, while the grinding plants have a total capacity of 9.8 million MT per year.

The chairman of the Vietnam National Cement Association described the industry as being “in the stage of a large oversupply, so export is the main channel to help the industry.”

In three years, the rated capacity of Vietnam cement production is seen to increase with the expansion projects of some of its major producers.

The local importer of cement which tried to pass off their brand as a “Product of the Philippines” buys from one of the Vietnamese companies selling at cut-throat prices.

Vietnam is expected to continuously produce excess supply for its domestic market thus increasing its exportable cement shortly, according to the TC.

Between 2018 and 2020, 45 percent of Vietnam’s cement exports went to the Philippines, or simply put 13.5 million metric tons.

While far smaller than Vietnam, Chinese cement exports also have the Philippines as its second biggest market cornering 14.08 percent of its total cement exports. The country was second to Hong Kong as the cement market for China as it absorbed 1.4 million metric tons between 2019 and 2021.

The feverish pace of infrastructure buildup in the country makes it a prime target for ASEAN cement makers.

With abundant natural resources, the country should be producing cement which can be achieved with a little push from the government through trade remedies.

A strong industry is also a jobs multiplier that benefits ordinary Filipinos, instead of creating employment in the countries where cheap imports originate.

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