Local contractors backpedal on plan to import cement

Despite the Department of Trade and Industry's repeated prodding contractors are backing off from their plan to import cement unless the government allows the Philippine International Trading Corp (PTIC) to undertake the importation.

Members of the Philippine Construction Association (PCA) met with DTI officials yesterday and said that they did not want to undertake the importation directly for fear of offending their suppliers.

The PCA has already imported a total of 25,000 metric tons of cement, due to arrive at three points of entry in Mindanao, Visayas and Luzon. Expected within the month are 10,000 metric tons to land at the Batangas Port in Luzon for P90 per bag and another 10,000 metric tons to arrive in Cebu at P95 per bag. The remaining 5,000 metric tons well land in Davao City at P85 per bag.

According to a DTI official who attended the meeting, the PCA wants imported cement but they want to go through traders instead of importing cement directly from Indonesia.

The official, however, revealed that cement traders expressed the same apprehension but said they do not want to end up being blacklisted by local cement manufacturers.

The only option available is for the PITC to do the importation but Trade Undersecretary Thomas Aquino said the agency would be mobilized only to "take care of the supply needs of small consumers."

"We are talking about a long history between cement users, traders and producers," said an official from a huge construction firm. "No one wants to jeopardize their relationship over something that is basically just a seasonal development."

The officials said even a P3 difference in the price of cement per bag was already significant so cement users naturally wanted access to cheap cement. "But more than good prices, we also want steady supply so no one wants to risk their long-term access to domestic cement."

In their report to the DTI, and DTI official said that traders cited a case where a Cebu-based cement trader had to change its name before undertaking the importation.

Cement users also face an even bigger problem of storage and handling since they cannot import in bulk and have to buy in bags. This would force them to incur additional arrastre costs.

DTI documents revealed that the PCA could not import cement in bulk since they have no bulk handling facility and the only companies that own bulk terminals are Apo Cement Corp, Union Cement and Alsons Cement.

The document also revealed that a floating terminal was currently docked in Singapore and was available to prospective importers.

The DTI has expressed apprehensive over the use of PITC as the agency to import cement. The document said the government-owned company had done this before and took huge losses as a result after local cement companies took the case to court and blocked the unloading of the shipment until it expired.