Safety first

The structural integrity of the building is the main concern for anyone involved in a construction project. Because of this, structural engineers design the buildings to be rigid, stable and strong enough to ensure the safety of the people using it.

Amid the construction frenzy spurred by the government’s “Build, Build, Build” program and the mushrooming of private construction projects, however, a Vietnamese official recently made a startling admission about the inferior quality of some cement brands from just across the South China Sea.

In an article published on Nov. 21, 2018, by Vietnam Economic News, Associate Professor Dinh Trong Thinh of the Academy of Finance (which is under that country’s Ministry of Finance) admitted that some cement exported from his country could be sold at a lower price due to lower production quality.

This is alarming because much of the cement that is imported into the Philippines (to compete with locally made brands) comes from Vietnam. Indeed, data from the Department of Trade and Industry (DTI) showed that from January to April 2018, cement from Vietnam accounted for threefourths of total Philippine cement imports.

So … are structures built using Vietnam-made cement safe?

Note that the quality of imported cement may also be affected by improper handling. In 2016, the National Consumer Affairs Council warned that seawater-contaminated cement entered the local market after a ship laden with the product imported from Vietnam suffered a leak that affected 6,000 metric tons of cement.

Thankfully, construction industry insiders tell Biz Buzz that government projects and high-rise private buildings exclusively use locally produced cement precisely because of quality concerns regarding imported cement.

Thankfully, too, DTI has imposed safeguard measures against cement importation after determining its adverse impact on the local cement industry. It has referred the case to the Tariff Commission for a formal investigation on the necessity of making the safeguard measures permanent.

Although DTI’s action was prompted mainly by business and economic considerations, it also indirectly addresses the safety concerns triggered by the poor quality of imported cement.

DTI noted that cement imports surged in the past five years from a measly 3,558 MT in 2013 to more than 3,000,000 MT in 2017 and reaching almost 5,000,000 metric tons in 2018.

By allowing loose cement imports at zero tariff, pure importers’ share of the market grew from only 0.02 percent to 15 percent from 2013 to 2017. As a result, the local industry experienced a sharp decline in income—earnings before interest and taxes—of 49 percent in 2017.

What is also at stake are the jobs of 42,000 workers directly employed by the local cement industry, along with an additional 125,000 jobs contributed through the value chain, not to mention the estimated P155 billion, or 1 percent of the country’s total economic output that the industry contributes.

The heavy cement importation has also contributed to the country’s trade deficit, the reduction of foreign reserves and the increasing pressure driving down the value of the peso.

But present domestic production capacity of 35 million MT a year is enough to meet the growing local demand, especially when various capacity expansion projects over the next five years are taken into account. Because of this, warnings by importers about price spikes due to a shortage have no legs to stand on.

So while the DTI’s move was meant primarily to correct the market imbalances caused by the dumping of Vietnamese cement into the country, it is actually helping solve a lot of other problems that these imports have caused: physical safety, job security and economic stability.

In the face of these facts—and a strong lobbying effort by “pure importers”—will the Tariff Commission have the political will to make the safeguard measures permanent? Or will they yield to pressure? Abangan! —DAXIM L. LUCAS

Lucio Tan feted

On the occasion of its 28th anniversary, Anvil Business Club, an association of young Fil- ipino-Chinese entrepreneurs, recently launched its first annual Anvil Leadership Award for Business Excellence (Alab).

The very first Alab honoree is tycoon Lucio Tan, chair and founder of conglomerate LT Group, Inc. and also chair of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. (FFCCCII). He was among the Chinoy business leaders who encouraged the younger Chinoys of FFCCCII to create in 1991 a distinct association for their age group.

Anvil has since then attracted the newer generation of Chinoy business leaders, some of whom will probably be tycoons of tomorrow. Led by president Patrick Cua and chair Wilson Lee

Flores, Anvil gave the first Alab to Lucio Tan, citing his “outstanding business and community leadership,” alongside his “multifarious philanthropy” through Tan Yan Kee Foundation.

Other businesses under the tycoon’s group are storied companies like Philippine Airlines and Philippine National Bank, which were acquired after these crown jewels were privatized. Among the businesses that Lucio Tan founded were Fortune Tobacco, Asia Brewery, Tanduay Distillers and Eton Properties.

Anvil’s goals are to promote traditional Confucian and Filipino values, civic consciousness, entrepreneurial courage, professional excellence, dynamic leadership and global competitiveness. Over the recent decades, its projects have sought to bring in international investors to the Philippines, promote entrepreneurship in provincial areas and organize relief measures during natural calamities, among others. —DORIS DUMLAO-ABADILLA

Foresight

Listed AgriNurture Inc. (ANI) is poised to earn some major profit this year, thanks to the foresight of its president and CEO, Antonio Tiu.

With the passage of the Rice Import Liberalization Law, which opened the country’s doors to unimpeded importation of rice, the company is expecting to earn as much as P6 billion annually after it secured an exclusive deal to import rice from Vietnam’s largest grains exporter.

Even when the law was still in legislation last year, ANI al- ready secured a billion-dollar deal with Vinafood II that gave it the exclusive right to import two million metric tons of rice every year from the latter—and that’s just the minimumcommitment.

Vinafood II has been the longtime supplier of the National Food Authority back when it was still allowed to import rice, and would-be importers are expected to buy from the same company once the law’s implementing rules and regulations are ironed out.

But with ANI cornering the supply allocation for the Philippines, traders would have to buy directly from ANI now or buy from other suppliers.

However, Tiu said that while they were looking to sell to traders, they were also planning to expand their own rice portfolio and ensure the constant availability of the company’s rice products in the market.

This would give ANI a huge edge from its competitors, and that is just the start. With the deregulation of rice imports, more companies are expected to try to get a share of the lucrative rice market. —KARL R. OCAMPO

New CEO for HSBC in PH

After Filipinizing leadership in the previous term (under Wick Veloso, who has now joined Philippine National Bank), HSBC Philippines now has a Kiwi for its new chief executive officer.

The British Bank has appointed 45-year-old Graham

FitzGerald as president and CEO. He was previously senior executive of an international HSBC unit that has oversight over 10 of the group’s network markets in Asia.

FitzGerald, who joined HSBC in the United Kingdom in 2004, has worked in a variety of roles, including global relationship management, lending and transaction management, regional operations and corporate banking. His career with HSBC has also taken him to many locations, including his home country of New Zealand, the United Kingdom, Hong Kong and the United Arab Emirates. E-mail us at bizbuzz@inquirer.com.ph. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ONINQ BUSINESS to 4467 (P2.50/alert)