Cement firms buck proliferation of cheap cement imports

Imported cement now accounts for over one fourth of the total cement market and close to 45 percent of the Metro Manila market alone, displacing at least five local cement companies in Luzon.

Data from the Philippine Cement Manufacturers Corp. (Philcemcor) reveal that imports mainly from Taiwan and Japan have risen steadily over the last few months from 94,000 metric tons in January this year to as much as 130,000 April.

Philcemcor managing director Lupo Feliciano said there was a surge in importation last month and the first to succumb were Luzon-based cement companies that supply the Metro Manila Market.

According to Feliciano, falling casualty to the influx of imported cement were Solid Cement based in Antipolo, FR Cement in Pasig, Republic Cement, Continental Cement and Hi-Cement all in Norzagaray, Bulacan.

Feliciano said importation increased steadily despite the stabilizing domestic prices, but imports continued to displace Luzon-based cement companies through predatory pricing.

"If local prices are not moving, they don't move either," Feliciano explained. "They just make sure that their cement is priced between P5 to P7 lower than domestic cement."

Data from cement companies indicate that in January 54,800 tons of cement were imported from Taiwan, rising steadily to 72,400 tons in February and to 85,000 in March. From Japan, 15,400 tons came in January, 33,500 tons in February and 33,000 in April.

Feliciano said that by May, importation from Taiwan had gone up to 100,000 tons while cement from Japan remained steady at 30,000. He said the bulk if not all of the imported stocks end up in Metro Manila since they land at the importers' terminal at the North Harbor.

Feliciano said the imports are being dumped at artificially low prices here by Japanese and Taiwanese companies to export their way out of the lingering effects of the Asian economic crisis.

An industry official said statements attributed to Trade and Industry Secretary Mar Roxas II encouraging imports could send the wrong signals to investors. "Why invest when it is clear that once you are in, the government will not protect you?" he asked.

"Once the imports gain virtual control of cement, they will raise their prices at will, putting at their mercy the construction and real estate sectors, let alone the economy," he said.

The official added that a substantially weakened cement industry will have to lay off thousands of workers and stop paying taxes. "That will have social and political implications as well."

"Imports mean jobs for Japanese and Taiwanese workers and taxes for their government, not ours," he added.

The Department of Trade and Industry (DTI) had been encouraging importers to bring in enough cement to bring down the prices of cement. Roxas said the anti-dumping case filed by local cement manufacturers is still pending with the Bureau of Import Services (BIS) but the recent surge in prices has undermined by the application of the industry by dumping relief.