“A healthy and competitive cement manufacturing industry in the country, currently with at least 10 domestic players, enhances the Philippines’ economic growth”
Local cement manufacturers are up in arms against what they insist has been the unabated dumping of cement imports from Vietnam, causing them material injury.
Cement is a critical input in the national government’s infrastructure development program, including the provision of decent homes made of strong materials for Filipino families.
A viable and robust local manufacturing industry that’s capable of meeting the country’s needs is therefore of utmost importance.
But local cement manufacturers fear if the dumping of cement from Vietnam continues they could be forced to cut down production or even close shop due to the unfair competition.
The cement manufacturers recently presented their case before the Tariff Commission, pleading for fair competition as they struggle to survive amid the unrelenting rise in the volume of cement imports, mainly from Vietnam.
They said that, as of 2021, Vietnam accounted for 91 percent of cement imports to the country in terms of volume and value, growing to about 61 percent in 2017 from almost nil in 2013.
The increase in cement imports from Vietnam grew faster than the year-on-year growth of the Philippine market.
Cement imports grew from 2.486 million metric tons (MMT) in 2017 to 5.396 MMT in 2020 and 6.466 MMT in 2021, according to data submitted by Cement Manufacturer’s Association of the Philippines (CeMAP) to the Commission.
The local cement manufacturers are asking the Tariff Commission to impose definitive anti-dumping measures against two types of cement imported from Vietnam.
It is not only member-companies of CeMAP but also non-members who are supporting the petition for the imposition of definitive anti-dumping duty against cement imports from Vietnam.
The industry has put in place safeguard measures since 2019 to limit the volume of imports while Philippine manufacturers implement their respective adjustment plans, as well as investments in capacity and capability upgrades amid fierce global competition.
Most of the adjustment plan projects have been substantially accomplished while others are underway after being temporarily derailed by the COVID-pandemic and adversely affected by rising coal and energy costs triggered by the Russian invasion of Ukraine in February this year.
With the influx of imports remaining unchecked and the initial safeguard measure set to expire in October this year, local manufacturers sought an extension, apart from asking for more stringent anti-dumping sanctions on certain types of imported cement.
Local manufacturers have committed to completing their respective adjustment projects although prevailing conditions make this task even more challenging, unless support is granted by the Tariff Commission with the trade remedies sought.
In return, a healthy and competitive cement manufacturing industry in the country, currently with at least 10 domestic players, enhances the Philippines’ economic growth.
Fortifying the industry means consumers will benefit from a secure and stable source of local cement, unhindered by variables of world demand and not dependent for supply on availability of excess capacity of exporting countries.
Data show that local cement prices have been stable the past 3 to 5 years and growing at a much slower pace than all construction commodities in the Construction Materials Wholesale Price Index (CMWPI) and also way below energy cost increases.
This validates the claim of local manufacturers that they have been absorbing a lot of the cost factor increases to keep prices affordable for cement consumers.
It is important to note that inflationary price increases of cement have no substantial impact in overall construction costs.
According to a study by BKAsiaPacific (Philippines) Inc., for instance, cement cost accounts for only less than 5 percent of total costs for a typical 2-story housing unit with basic finishes.
The remedies sought by local cement manufacturers will encourage inflow of fresh capital from shareholders to help trigger inclusive growth through job creation for Filipinos, revenue generation for the government and a marked improvement in the country’s balance of payments position.
With abundant natural resources in the country, particularly limestone which is a key ingredient of cement, the domestic cement manufacturing industry is one of the few sectors with the potential to be self-reliant and less import-dependent.
Moreover, domestic cement manufacturers actively contribute to improving the welfare of Filipinos through their corporate social responsibility programs that involve poverty alleviation, education, typhoon relief efforts, pro-environment projects (alternative fuels usage, reforestation, emissions monitoring), and technological advancements.
Without a doubt, a robust local cement manufacturing industry could make significant contributions to accelerated economic recovery that would create more jobs and improve the standards of living of Filipinos in the years ahead.