The pandemic was the last straw that struck the country’s newsprint industry which had been increasingly overrun by the advent of digital media.
The Tariff Commission (TC), in its final report dated May 21, 2021 on the adjustment plans of the sector following the termination of safeguard duties in 2018, said the gains achieved by the industry during the imposition of additional duties were negated by market developments, referring to shift to digital.
“The Commission finds the actions undertaken by the newsprint industry to improve production efficiency and increase output as effective in terms of enhancing the competitive position during the period of the imposition of safeguard measures. But market developments have negated the gains of the industry and rendered its future growth as largely unsustainable. The economic consequences of the 2020 pandemic have also taken its toll,” the report said.
It added: “With the advent of the internet, print media has transitioned to digital media thus the decline in newspaper readership. COVID-19 (new coronavirus disease 2019) has buffeted the newsprint industry and forced newspapers to downsize and go online. COVID was the last straw for the survival of the newsprint industry.”
The report said the newsprint industry has dwindled to two players to date as one newspaper mill closed while three others opted to concentrate on the manufacture of their main paper products.
But all is not lost as a new player, Fifth Discipline Packaging Paper Corp. in Mabalacat, Pampanga which is into the manufacture of corrugating medium recycled paper bag and testliner board started producing newsprint in the third quarter of 2020.
The Commission said this indicates growth prospects and assures local availability of newsprint.
“With the emergence of a new player, it can be said there is still hope on the horizon for an admittedly sunset industry whose products can compete with imports following the termination of the safeguard measure and assure continued local supply,” the TC said.
The Commission said newsprint is no longer a major segment of the paper industry and the domestic players will find it difficult to produce at levels that will allow them achieve economies of scale and increase ability to compete against imports.
During the imposition of safeguards, the TC said the domestic industry complied with the adjustment plan such that in 2017 and 2018, local players became dominant in the market and increased their production and sales and improved their capacity utilization.
But by the time the duties were lifted in May 2018, the industry has been affected by the drastic global shift in consumer preferences from print to digital.
The industry was also hit hard by the effects of the pandemic and the quarantines that accompanied it.
The physical closure of schools and establishments affected the production of pad paper and notebook and paper bags. – Irma Isip
