Cement manufacturers are threatening to lay off workers if the government continues to encourage importation.
The Philippine Cement Manufacturers Corp. (Philcemcor) said yesterday that imported cement could easily grab 75 percent of the Metro Manila market by the end of the year and result in the closure of at least five cement companies by early next year.
Philcemcor managing director Lupo Feliciano said the official encouragement of cement importation was a "myopic stance" and is hurting the local industry.
"For one we will be forced to lay off people," he said. "Meanwhile, workers in Japan and Taiwan get to keep their jobs because our government is in effect protecting them."
Feliciano said five cement companies have been hit hard by the entry of cheap imported cement and are now operating way below capacity." The rampant plant closures over the last two years should have been alarming to policy makers," he said.
In an effort to stabilize local prices, government encouraged cement importation by large users. For small users, the Philippine International Trading Corp. (PITC) has agreed to consolidate their orders to enable them to import in bulk and thereby lower cost.
"The move has led to the tempering or stabilization somewhat of cement prices within the P115 to P118 bracket," Trade and Industry Secretary Manuel Roxas II said. Portland cement now sells within this price range, significantly lower than the P125 per bag price recorded in March.
The DTI said earlier it would not lift a finger to curb the surge in the importation of cement, saying that it has achieved the goal of stabilizing domestic cement prices to benefit consumers.
Local cement manufacturers earlier reported that 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.
Philcemcor data showed 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 metric tons in April.
Feliciano said there was a surge in importation last month and the first to succumb where Luzon-based cement companies that supply the Metro Manila market. Feliciano said the influx of imported cement badly hurt Solid Cement based in Antipolo, FR Cement in Pasig, Republic Cement, Continental Cement and Hi-Cement all in Norzagaray, Bulacan.
He added that importation increased steadily despite stable domestic prices and that imports continued to displace Luzon-based cement companies through predatory pricing.
However, the trade secretary's initiative to encourage cement importation was an open-ended policy where importers could source cement anywhere they wanted to.
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.