Is Taiwan winning the cement war?

The anti-dumping protest filed by Taiwanese cement manufacturers versus the Philippines seems to be progressing at lightning speed, raising apprehensions among local cement manufacturers that they will lose not only the Taiwan export market but the Philippine market as well, which continues to be eroded by surging cement imports.

"It looks like Taiwan cement makers will have their cake and eat it, too," said the Philippine Cement Manufacturers Corp. (Philcemcor). "Not only have they obtained a preliminary determination that Philippine cement exports to Taiwan have injured Taiwan's cement industry, the Philippines' own application for safeguard measures, filed last January, has been indefinitely put on hold by an injunction issued by the Valenzuela City Regional Trial Court."

Five Taiwanese producers led by Taiwan Cement Corp. (TCC) filed an anti-dumping case against 17 Philippine and two South Korean cement firms last July. In their complaint, the Taiwanese companies asked the government to slap a 65-percent anti-dumping tax on all Philippine and South Korean cement exports to Taiwan for the next five years.

Last September, after barely two months of hearings, the International Trade Commission of Taiwan issued a Preliminary Determination of Injury in favor of the Taiwanese cement companies. With this, Taiwan's Ministry of Finance has begun the process of calculating the exact anti-dumping tariff that will be imposed on the Philippines and South Korea, based on submissions from the plaintiffs and the Philippine respondents.

"We cannot force the Taiwanese government to keep its cement market open to foreign competition," Philcemcor conceded. "However, there are things we can do here at home to address the current plight of the local cement industry and to prevent the Philippines from becoming a victim twice over. Unless there's a check on Taiwanese cement entering the Philippines, then the local cement industry will surely pay for having its largest cement export market (Taiwan) closed to it, and this in turn will contribute to the shutdown of more cement plants to the layoff of more cement workers."

Philcemcor also lamented that the Philippines seems to have been singled out from among the five Asian countries currently exporting cement to Taiwan. "If our cement exports to Taiwan were causing injury to the Taiwanese manufacturers, then why was the largest exporter – Japan, which shipped 300 percent more cement than the Philippines did – not included in the anti-dumping protest?" the group asked.

Data from the Taiwan Cement Manufacturers Association and the Taiwan Customs Bureau have indicated that the Philippines only exported a total of 636,592 metric tons of cement to Taiwan in 2000, or a mere 3.57 percent of the total demand of Taiwan for that year.

In contrast, Japan exported nearly three times as much as 1,868,523 MT, and accounted for a market share of 10.49 percent, the biggest among the five countries currently exporting cement to Taiwan.

As a percentage of Taiwan's total imports in 2000, Philippine cement had a 23-percent share, way below that of Japan's 69 percent. Korean cement accounted for only seven percent of total imports while Thailand and China had a combined share of only one percent.

"Compared to the Philippines, Japan undeniably exported more cement to Taiwan and cornered a bigger share of the cement market there," Philcemcor pointed out. "Ironically, Japan was not included anywhere in the anti-dumping case, showing that the Taiwanese firms which are pursuing the case are just trying to single out the Philippines and Korea as scapegoats for their current situation."

Philcemcor also argued that several factors, including the economic recession in Taiwan last year and the subsequent slowdown in its construction industry, were responsible for the fall in Taiwanese cement prices.

The main reason, however, was the launching of TCC's "mega-plant" in Hoping, Taiwan, which caused a glut in cement supply and a corresponding drop in cement prices, the group said. With a capacity of six million tons per year, the new TCC factory boosted Taiwan's total production capacity by 25 percent, and now accounts for more than 35 percent of the country's total cement demand.