THE lone manufacturer of tin plates and tin-free steel used for tin cans has requested the elimination of the 3 percent tariff currently placed on tin mill black plates (TMBP), the raw material for the products, to correct distortions with finished products and ensure the company’s competitiveness.
In a public hearing held virtually on Friday, Kai Adachi, sales manager at Perstima Philippines Inc. (PPI), said the current tariff structure — where TMBP, the raw material, is subjected to a 3 percent tariff, while finished tin plates are duty-free — “impacts our production expenses and reduces our competitiveness.”
“This discrepancy in tariff rates creates significant challenges for PPI. As the sole manufacturer of tin plates in the Philippines, this puts PPI at a disadvantage as we face higher production cost compared to overseas manufacturers which export finished products directly to the Philippine market without the burden of tariffs. As raw materials for TMBP are dependent on overseas suppliers, we believe tariff policies play a crucial role in protecting and supporting the domestic tin plate industry,” Adachi told the hearing.
In a separate phone interview after the hearing, Rolando Magsajo, president of the Philippine Iron and Steel Institute (PISI) said the group supports Perstima’s petition for tariff reduction on TMBP.
“Ideally this will correct the distortion where tariff on the raw material, in this case TMBP, is higher than tin plates or tin-free steel. Reduction in tariff will help the local industry to be more competitive and hopefully lead to more competitive local prices as well,” Magsajo told Malaya Business Insight without elaborating.
In a position paper shared with Malaya Business Insight, PISI on Jan. 18, 2025 also formally submitted to the Tariff Commission its own petition to exempt TMBP from the current 3 percent import tariff, “as part of the ongoing efforts to streamline tariff policies for raw materials vital to the steel sector.”
In the petition, PISI said the tariff exemption for TMBP would level the playing field, allowing local manufacturers to reduce production costs and offer more affordable products to consumers.”
At the hearing, Adachi said PPI’s main suppliers from Japan cannot supply enough TMBP. This has promoted PPI to diversify sourcing such as from Korea, Taiwan and China.
In comparison to other Asean countries, Adachi said Vietnam, Thailand and Indonesia have reduced their tariffs to zero.
Adachi said the existing tariff framework not only affects PPI’s competitiveness but also undermines the growth and stability of the domestic manufacturing industry, such as the can manufacturing industry.
With the elimination of tariffs, Adachi said can makers can manage their costs more effectively, and reduce their risks associated with price volatility, ensuring the financial stability of their business throughout the supply chain.
“The benefits extend to consumers. By reducing production cost, we can ensure canned products remain affordable,” Adachi said, but did not give numbers.
Tin plates and tin free steel produce tin cans which are used for canned foods like sardines, tuna and pineapple; crown caps of beverages and industrial cans such as paints.
When asked by Commission chair Marilou Mendoza about demand outlook, Adachi said PPI sees growth in the tin plate and tin free steel industry “aligned with GDP” expansion over the next five years. Mendoza also queried if PPI has the capability to meet that demand to which Adachi replied: “That’s our target.”
Tin plate demand in the Philippines is placed at 250,000 tons per year.
Adachi added PPI is in a better position to supply local manufacturers with tin plates and tin free steel than imported counterparts.
“We can produce and deliver to our customer in a more timely manner; we can provide materials based on customers’ needs. We can also provide quality support,” he said.
Citing Bureau of Customs data, PPI said from 2021 to 2024, imports of TMBP fluctuated from 446,48 MT in 2021; 12,100 MT in 2022; 2,461 MT in 2023 and; 26,194 MT in 2024. PPI accounted for 99 percent of imports since 2022.
Japan supplied 77 percent of total TMBP imports during those period, the data showed.
PPI, one of only two overseas subsdiaries of Perstima Bhd of Malaysia, started operations in Malvar, Batangas in August 2022. The other is Perstime Vietnam.
With 183 workers, PPI has a capacity to produce 200,000 MT tin plates and tin free steel.