DTI extends period of safeguard duty on cement imports

The Department of Trade and Industry (DTI) has extended the period of safeguard duty on imported gray Portland cement up to December 2004.

The new order stretches the provisional safeguard duty approved by the DTI three years ago when domestic cement companies lobbied to stop the influx of cheap imported cement into the local market.

The order also covers imports coming from ASEAN member countries governed by provisions of Articles 6 and 8 of the agreement on the Common Effective Preferential Tariff (CEPT) scheme.

At the same time, Trade Secretary Manuel Roxas II directed local cement companies to comply with their respective DTI extends adjustment plans submitted in January 2002, detailing strategies to make them more globally-competitive.

These include common efficiency measures such as power and fuel cost reduction, increased management and operational efficiency, product research and development, current debt restructuring and increased domestic capacity utilization.

Previously, Roxas said the provisional safeguard measures were effective, giving the industry the necessary breathing spell required to recover from the slump it suffered with increased cement imports.

DTI said in its order that after thorough investigation and review of the cement case, it concluded that "the sudden, sharp and significant surge in cement imports during the period of investigation has resulted to significant declines in sales volume, market share, actual production, capacity utilization, profitability and employment of the domestic cement industry."

The imposition of the measure, Roxas added, restored stability and normalized market conditions.

The resulting environment, Roxas said, fostered healthy competition among domestic cement manufacturers, enabling them to considerably reduce prices from a high of P142 per 40 kilogram bag in 2001 to a low of P98 in 2002 and then P100 in 2003.

The decision to adopt definitive measures, Roxas went on, will benefit a significant number of workers and employees in the domestic industry by saving thousands of jobs.

"The definitive safeguard measures would contribute to the local economy where the industries are physically situated due to the increased revenue and tax collection.

The DTI, Roxas said, would undertake a regular review of the cement industry’s performance to determine the need for the continued imposition of safeguard measures.