Cement companies seek more protection against dumping

Cement companies want more protection than the imposition of anti-dumping bonds on imported cement, drawing sharp reactions from trade officials who said the industry has to prove that it can compete in an even market.

The Philippine Cement Corp. (Philcemcor), an organization of 19 cement manufacturers, met with officials of the Department of Trade and Industry (DTI) on Tuesday to discuss the crisis in the industry in the wake of reports of dumping from Taiwan and Japan.

A DTI official who declined to be identified told reporters that the industry wanted more than protection from cheap imports, and had asked government to intervene in the market, specifically cement prices.

According to the official, Philcemcor briefed the DTI on the current situation in the industry, indicating that local cement manufacturers were asking for more government support on top of the imposition of anti-dumping bonds on dumped imports.

The official refused to disclose what cement producers had asked for, but hinted at price control-related policies such as fixed pricing or price support in order to hurl current cement prices to what the industry pegged as the break-even level.

"I do not want to discuss the details but what they are asking for is politically untenable," the official said. "It is too much and it cannot happen."

The industry estimates that in order to break-even, cement prices in the retail market have to be between P135 and P145 per bag. The fixed price being suggested was 10 percent above the current ex-plant price of P98 to P99 per bag.

However, Philcemcor president Lupo Feliciano said the anti-dumping case was only mentioned in passing during the meeting which was called specifically to brief the DTI on the current situation in the industry.

"The anti-dumping bond is the only safety net available to us at present," Feliciano said.

According to the trade official, however, the industry has to prove it is operating at competitive levels and that the imported cement landing at Philippine ports are being sold at dumped prices.

The official revealed that even before the crisis, Japan was already selling at $50 to $60 per metric ton, close to the alleged dumped price of $20 per metric ton for cement coming from both Taiwan and Japan.

A top official of a local cement company, on the other hand, said imposing price controls in whatever form did not make sense. Putting a 10 percent mark-up on ex-plant prices for instance, would still put cement prices below the break-even mark.

"At the end of the day, Philippine cement companies are operating at competitive levels but only if the market is level," the official said. "There is no way that Taiwan can produce cement below $20 per metric tons because their labor cost is higher than ours, they have to ship the product all the way to their terminals here plus a host of other factors."

The industry said imported cement had grown from under one percent of the market in January 1998 to over 7 percent by the end of the year and this could reach 15 percent in 2000 if importation continues at present rates.

According to the official the bulk of the imports came at an alarming rate during the second half of 1999 at prices below the actual ex-factory prices in their countries of origin.