The local downstream plastics industry raised an alarm over the possible closure of plastics factories amid the dearth of local raw materials for plastics manufacturing.
The Philippine Plastics Industry Association sounded the alarm amid an ongoing battle against safeguard tariffs on raw materials used by the plastics industry.
“The Philippines’ national plastic manufacturers are at severe threat of factory closure with lack of raw material supplies. The plastic industry is of significant national interest, with multiple industries now utilizing and depending on plastic materials for their products,” said PPIA president Danny Ngo.
The industry group highlighted the sorry plight of plastics manufacturers as the industry was slowly recovering from the COVID 19 pandemic with low market demand and manufacturing challenges brought about by the lack of infrastructure and public transport system.
The inability of JG Summit Petrochemical Corp. to fulfill its October to November supply commitments redounded to less inventory of raw materials, according to PPIA.
JGSPC, the country’s sole manufacturer of LLPE and HDPE resins, is the main proponent for safeguard tariffs on plastic raw materials.
“With JSGPC being the sole domestic supplier, there will not be enough time for the local manufacturers to import their raw material needs to keep the factories running and we will have no choice but to shut down,” said Ngo.
“Our buffer stocks for both raw materials and finished goods are at an all-time low due to lack of financial capacity. Our workers were looking forward to report back and save enough for the upcoming holidays and we need the business to enable us to fulfill our obligation to pay them their 13th month pay,” Ngo said.
PPIA asked the Department of Trade and Industry and the Tariff Commission to reject safeguard tariffs sought by JGSPC, saying this would place hundreds of domestic downstream manufacturing players at a big disadvantage.
JGSPC sought for P15,000 per metric ton safeguard duties for high-density polyethylene and linear low-density polyethylene that led to the preliminary investigations starting Sept. 4, 2020.