JG Summit Petrochemical Corp. (JGSPC) is urging the government to impose safeguard duties on imported plastics raw materials, saying that increased imports will cause serious injury to the domestic industry.
The Philippines has notified the World Trade Organization Committee on Safeguards it initiated on Sept. 4, 2020 a “preliminary safeguard investigation” on high-density polyethylene (HDPE) and linear low-density polyethylene (LLDP) pellets and granules, raw materials used in the production of plastic products ranging from grocery bags to crates and pallets.
In its application, JGSPC sought for the imposition of P15,000 duties per metric ton of imports of both HDPE and LDPE for a period of 10 years.
HDPE is used in the production of grocery bags, pallets and crates for cold storage, beverage caps, crates and cases, housewares and containers among others. LDPE is used for the manufacture of heavy duty sacks, flexible packaging, stretch films, industrial liners, garments, grocery and trash bags.
The Department of Trade and Industry (DTI) in its evaluation reports on JGSPC’s request said the period of investigation (POI) covers 2015 to 2019 where import volumes grew significantly, resulting to decline in domestic sales, production, utilization rate, reduced labor productivity, losses, suppression, depression and increased inventory.
The DTI said HDPE growth rate of imports for the five -year period was recorded at 274 percent with two significant surges in imports, one in 2016 and the other in 2019.
The importation of HDPE recorded at 29,692MT in 2015 and rose by 53,860MT or 181 percent in 2016.In 2019, imports significantly increased by 22,856MT or by 26 percent compared to the previous year. For January to April, imported HDPE is already 36 percent of the 2019 level.
JGSPC primarily sells its HDPE resins directly to over 200 local plastic products manufacturers and secondarily through distributors.
The DTI report also showed the volume of LLDPE imports grew from approximately 80,00MT (2015) to 121,000 MT (2019).
In 2016, imported LLDPE increased by 3,871 MT or 5 percent over 2015 level. Imports fell by 4,152 or 5 percent in 2017. In 2018, imported LLDPE significantly increased by 30,462 MT or 38 percent from 2017 level.
In 2019, it continued to increase by 10,325MT or 9 percent from a year ago.
Singapore, Thailand, Qatar and Saudi Arabia remained to be the largest suppliers of LLDPE during the POI.