Safeguard duty to cause cement lack, govt warned

T HE Philippines will suffer from a shortage in cement over the next months if the government decides to protect the local industry by imposing a safeguard duty, importers warned on Wednesday.

Philcement Corp. President and CEo Eduardo A. Sahagun said cement supply could fall short if the Department of Trade and Industry (DTI) places a safeguard duty on imports. He argued that local manufacturers are incapable of supplying the country’s requirement for the construction commodity.

Domestic producers were able to fill in the demand of 19.60 million tons in 2013 and 21.30 million tons in 2014, Sahagun said, citing data from the Cement Manufacturers’ Association of the Philippines, DTI’s Bureau of Import Services and the Bureau of Customs.

However, production fell short in 2015, when demand was at 24.36 million tons, but local supply was at 24.04 million tons only. The requirement in 2016 expanded to 25.96 million tons, but production declined to 23.49 million tons.

The gap further widened in 2017, as demand accelerated to 28.55 million tons, while domestic supply was at 25.57 million tons only.

Cement demand last year was estimated at about 32 million tons,

according to the DTI, and is expected to jump to 50 million tons by 2025 on the back of increased infrastructure spending and private investments on construction. If this be the case, Sahagun said, cement will be in shortage over the next months should the government choose to protect the local players.

Safeguard duty

LaST week Trade Secretary ramon M. Lopez signaled he will impose safeguard duty on cement due to a surge in imports over the past five years.

“We have noticed an import surge, [and] that has been established. There are trade measures, like the [safeguard], [and] we are mandated to really look into this,” Lopez said.

“[The surge in imports] hurt in terms of sales and in terms of income [of domestic players],” he added.

Cement importers, for their part, explained to Lopez in their dialogue this week that imports rose the previous years because there was a need to fill in the supply gap left by domestic production. They also told him local manufacturers imported heavily since 2016 to reinforce the supply deficit situation.

In 2016 Holcim Philippines Inc. imported 1.35 million tons of cement; apo Cement Corp. 195,000 tons; Goodfound Cement Corp. 62,000 tons; and republic Cement Iligan Inc. 45,000 million tons, Sahagun claimed, citing government data.

The following year, Holcim imported 725,000 tons of cement; apo Cement 212,000 tons; Goodfound 104,000 tons; republic Iligan 19,000 tons; and republic Mindanao 12,000 tons. This, for Sahagun, proved that “domestic manufacturers, mostly MnCs, were responsible for the surge in imports.”