Asahi Glass seeks tariff cover to complete kiln upgrading

Asahi Glass Philippines Inc. (AGPI) is seeking tariff protection for a period of three to four years to enable it to undertake the upgrading and redesign of its existing figured glass kiln at a cost of up to $9 million.

AGPI president Renato Ermita said the company needs tariff cover for only a limited period to justify its planned expansion and renovation.

Without the tariff safeguard, Ermita said AGPI will likely abandon its additional investment plan since it may just incur more losses due to the existing depressed market and increasing competition from cheap imported glass.

Because of the depressed market and foreign competition, AGPI has already been forced to discontinue some of its glass manufacturing operation such as tempered automotive glass production.

However, in spite of its under-utilization, AGPI continues to operate its two kilns 24 hours a day, seven days a week.

Antonio S. Delmendo, vice president of the basic glass productioin division, said that the plant cannot just shut down due to the fact that its glass kiln must constantly maintain a temperature of 1,600 degress.

If the kiln shuts down, it would take a minimum of 20 days to fire up the kiln to reach the 1,600 degree temperature again, Delmendo said.

Thus, the plant must operate at least 10 to 15 years before it undertakes any major repair or upgrade, he added.

AGPI operates and manufactures glass at par with world standars but unfortunately, locally produced glass is now meeting stiff competition from imported glass, specifically from China.

While the Philippines only has one glass manufacturing plant, China already has 150 plants and is in various stages of constructing about 80 more glass plants.

China, which has silica (one of the raw materials for glass), is thus able to produce glass very cheaply and must dump some of its extra production.

AGPI, on the other hand, still has to import silica from Australia, thus adding to its cost.

Other ASEAN countries, meanwhile, continue to give adequate protection to its glass industry at around 30 to 50 percent, while the Philippines has already lowered its tariff on glass to just five percent.

AGPI is seeking tariff protection under the Safeguard Measures Act, but up until now, the Department of Trade and Industry (DTI) has not completed its investigation.