The downstream plastics industry warned of possible factory closures because of lack of raw materials.
In a statement, the Philippine Plastics Industry Association (PPIA) said JG Summit Petrochemical Corp.(JGSPC), the country’s sole manufacturer of resins specifically linear low-density polyethylene or LLPE and high-density polyethylene or HDPE, is unable to fulfill its October to November supply commitments.
Danny Ngo said, president of PPIA, said this comes at a time when the industry is slowly recovering from the pandemic which low led to market demand and manufacturing challenges .
“The Philippines’ national plastic manufacturers are at severe threat of factory closure with lack of raw material supplies. The plastic industry is of significant national interest, with multiple industries now utilizing and depending on plastic materials for their products,” Ngo said.
He added: “With JSGPC being the sole domestic supplier, there will not be enough time for the local manufacturers to import their raw material needs to keep the fac tories running and we will have no choice but to shut down.”
Ngo said buffer stocks for both raw materials and finished goods are at an all time low due to lack of financial capacity.
PPIA earlier urged the Department of Trade and Industry and the Tariff Commission not to grant the protection and safeguard tariffs being sought by JGSPC as it will place the hundreds of domestic downstream manufacturing players at a big disadvantage.
PPIA warned finished products will flood the market with cheaper cost of production overseas and lower duty rates, thus, effectively stifling the local production.
Ngo said PPIA recognizes that while some countries may have lower production cost and prices, this is made possible through significant incentives, subsidies, and support by their government designed to bolster their own country’s position for export.
“Should domestic industries be forced to close, our increasing reliance on foreign products may place the country in a difficult position,” Ngo added. — Irma Isip