Can a newly established firm engaged in steel imports compete with established competitors in the Philippine market?
Mannage Resource Trading Corp. is finding out that it’s not that easy to enter the market.
MRTC in a statement on Thursday said it was mulling over the filing of libel and damage suits against the Philippine Iron and Steel Industry president Roberto Cola after MRTC’s importation of 4900 metric tons of rebars from China was blocked by the trade group.
When the shipment arrived last April at Subic port, PISI sought an alert and requested the Bureau of Customs to seize the shipment, claiming it had no Import Commodity Clearance and the shipment is substandard.
BOC granted the request.
MRTC president Lawrence Sy argued that the shipment had a provisional ICC, formerly called conditional release, issued on April 18. It obtained an approval of its logo design last Dec. 22, 2015 and had complied with all the requirements of the law. This was ascertained by BoC Subic.
Sy stressed that they made sure that the quality of the bars is far superior than those available in the local market prior to leaving the port in China.
Philippine National Standard for grade 230 of rebars indicates a benchmark of +/- 6 percent of 3.702 kg or a minimum weight of 3.479 kg per six meters. These rebars are usually used for housing development.
MRTC claims that its laboratory tests prior departure from China shows a less than -.5 or a 3.4 kg for every 6 meters.
The company started to buy rebars of various logo designs that are available in the market to check the standards and the tests show that a number of these rebars fall between -7 to -15, way below the standard imposed by the DTI.
Moreover, the length of the bars is usually shorter as well. This means that consumers are shortchanged and the quality likewise sacrificed.
Ian Kwok, a director of MRTC, says the government has set the threshold value for rebars at US$260/mt. MRTC has declared its value at $270/mt or $334/mt CIF.
The value is higher because production uses a higher quality of billets used in its manufacture. Thus, the imported rebars cannot be classified as dumping because of its higher cost.
MRTC further explained that the threshold value of steel billets imported for the manufacture of rebars in the Philippines is pegged at US$240/mt.
In an incident report made by the Philippine Steelmakers Association early this year, the declared value of a shipment by Roberto Cola of steel billets from Russia was $205/mt, much less than the threshold value of government.
An expert from the Federation of Philippine Industry recommended to the Customs that the declared value was within range and that the tariff is 0 percent.
According to the PSA, it was correct for the BoC to reimpose the 3 percent tariff but the value was still underdeclared.
Sy explained that when they were starting the business, they had to take pains in knowing the nitty-gritty of the industry and they are morally bound to inform the public of these details as the cost of rebars in the Philippine market is now ranging between US$550-$600 per MT.
Sy said they engaged in the business but will not shortchange the public by selling substandard products.
MRTC said Cola and his group have captured the market and are trying to do everything to prevent newcomers from coming so they can keep the price of steel in the country very high.
MRTC lamented that some government officials may be in cahoots with PISI since their shipment which complied with all the requirements stipulated and are within the standards specified by law continues to be held without any legal basis.
MRTC said they are ready for a challenge to test rebars in the market against their shipment. They have purchased from hardware stores and stockpiled the rebars from different companies to prove that their rebars are far superior.
Apart from the libel and damage suit they will be filing, they have also sought the advise of lawyers if their case can also be elevated before the newly created Philippine Competitive Commission.
The trade rivalry can be a test case for the Duterte administration, MRTC said.