The Cement Manufacturers’ Association of the Philippines (CeMAP) on Sunday said imported cement particularly from Vietnam continues to exert pressure on local manufacturers, forcing some of its members’ plants to shut down temporarily.
CeMAP made this comment after the Department of Trade and Industry (DTI) on Oct. 28, 2024 issued an order initiating a preliminary investigation to determine if increased imports of cement are causing or are threatening to cause serious injury to the domestic industry.
In a statement, CeMAP executive director Renato Baja, said some plants are forced to shut down as current utilization rates are at only 55 to 60 percent. This is aggravated by production costs that remain suboptimal.
Baja did not provide details but said the shutdowns could cause at least 5 percent reduction in employment this year.
The DTI said total employment in the industry declined 6 percent in 2023 and by another 8 percent as of the first half of 2024.
The motu proprio investigation of the DTI will determine whether or not safeguard measure will be slapped on imported cement.
This would be a double whammy for Vietnam where imports from some of its manufacturers are currently slapped with dumping duties.
Baja said cement manufacturers from Vietnam are exporting their surplus production as domestic demand continues to decline.
He added roughly less than 20 percent of imports are subject to anti-dumping duties.
The DTI said both anti-dumping duty and safeguard measure can apply to Vietnam if the ongoing investigation will rule for the imposition of the latter.
The DTI in a department order last February 14 imposed dumping duties on cement from specific exporters from Vietnam for a period of five years.
The DTI said there is no express prohibition under Safeguards Measures Act and Anti-Dumping Act, for the simultaneous imposition.
Maria Guiza Lim, director of the Bureau of Import Services, explained the difference between the two trade remedies.
She said safeguard measure is a safety net for the surge in imports causing injury to domestic industry. “In a way, this provides breathing space to domestic industry to import competition,” Lim said.
Anti-dumping, on the other hand, is unfair trade and occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect.
Safeguard measure is global in application while anti dumping is country and exporters specific.
Citing overcapacity, Baja said the industry can produce up to 50 million tons annually, significantly exceeding the estimated national demand of around 35 million tons.
Baja said the initiation by the DTI comes very timely as the industry is really suffering from these imports.
“Without such measures, the ongoing influx of foreign cement poses significant risks to Filipino jobs, local businesses, and the broader economy,” he said.
The DTI in its notice said the period of investigation is between 2019 and June 2024. Aside from Vietnam, other sources will be covered by the probe: People’s Republic of China, Indonesia, Japan, Thailand, Pakistan, Malaysia, Brunei, United Arab Emirates, Singapore, Canada, South Korea, Chinese Taipei, Iran and the US.
The DTI in a statement said there is substantial evidence indicating increased imports of cement have caused serious injury to the domestic industry.
“This injury is manifested in declining market share, reduced production and sales, decreased capacity utilization, diminished profitability, price depression, undercutting, and suppression,” the DTI said citing the order signed by Secretary Cristina Roque.
The significant increase in the volume of imported cement preceded the serious injury to the domestic industry in 2023.
The DTI said this surge in imports has led to a shift in market share, with imported cement displacing domestic products. Consequently, the domestic industry has suffered serious injury.
The DTI said evidence indicates a significant increase in cement imports during the investigation period of 2019 to June 2024.
It said imports have steadily risen year-on-year from 2019 to 2023. Imports grew by 10 percent in 2020, 17 percent in 2021, and 5 percent in 2023.
The relative share of imports has also increased from 30 percent in 2019 to 47 percent in 2023, and further to 51 percent in the first half of 2024.
Data from DTI showed imports grew to 7 million tons in 2023 from 5.3 million tons in 2019.
Vietnam alone shipped 6.88 million MT in 2023, or 98 percent of total imports from 4.23 million MT in 2019 or 79 percent of total.
The DTI data also showed price undercutting from imports, with difference reaching 11.64 percent as of 2024.Total industry production including those from non-CeMAP members dwindled to 83 million MT in 2023 from 100 million MT in. 2019.
