Importers warn vs safeguard duty
Local cement production not ample
Cement importers have urged government to push for the imposition of safeguard measure or punitive duty on imported cement once there is already enough local production to serve increasing demand of this critical construction input.
Engr. Napoleon Co, president of Philippine Cement Importers Association, said there is no problem with the imposition of safeguard measure as long as there is enough local production to satisfy local market requirement.
Co said that cement demand in 2018 hit 32 million and is expected to grow to 34 million this year as more infrastructure projects under the government’s Build, Build, Build, program are being implemented.
But Co pointed out that local cement manufacturers are running of capacities. In 2018, he said they only produced 26 million metric tons. The shortfall was addressed by imports.
“If there is already enough domestic production and cement firms commit not to raise prices then it will be proper for local cement plants to ask for safeguard measure protection,” he stressed.
Local cement manufacturers are still expanding their capacities by 17 MMT but the additional supply is expected come on stream three to four years from now yet. In the meantime, imported cement is filling up the gap. In fact, Co pointed out that 60 percent of imports are done by the local cement manufacturers.
That is why imposing the safeguard measure at this time of shortage in local cement supply will only worsen the shortfall, Co stressed. “If the market is experiencing shortage in local supply and local cement plants are really able to maintain their selling prices then traders/importers will lose money. When that time comes, we will have to stop importing,” he said.
But Co doubted that local cement manufacturers would be able to maintain their prices.
Co explained that since there is not enough local capacity and there is no importation of cement, the strong demand will push cement prices up affecting local consumers.
Once prices of local cement eventually increase at near parity of imports with safeguard duty, Co said that will be the time they will also resume importation because they can already compete with the high prices of local cement.