Steel sector can survive higher tariff on tinplates, says former NSC official

A former official of the National Steel Corp. (NSC) is disputing claims of the Tin Can Manufacturers Association of the Philippines (TCMAP) that increasing the current three-percent tariff on tinplates would kill most of the downstream steel industry players.

According to Louie Wassmer, former marketing manager for tinplates of NSC, tincan manufacturers never pass on to consumers any benefit they get from lower tariff on tinplates.

Likewise, Wassmer pointed out, the tincan manufacturers would also easily pass on to consumers any additional cost they may incur.

In fact, Wassmer claims, some unscrupulous tincan manufacturers actually don’t even use food grade tinplates to make tincans for food products.

Instead, Wassmer revealed, the unscrupulous tincan manufacturers import the so-called "waste-waste" classified tinplates which are non-food grade and are intended for tincans for paint and motor oil.

However, it is commonly known and accepted in the tincan manufacturing industry, Wassmer said, that such tincans are coated with a special "lacquer" which makes the tincans acceptable for use food packaging use.

It is also commonly known, Wassmer said, that a lot of technical smuggling goes on in the importation of the food grade "prime" tinplates which tincan manufacturers misdeclare as "waste-waste" to be able to pay lower taxes, thus cheating the government out of the proper revenues.

The NSC, when it was still controlled by government, has been willing and able to supply the tinplate need of the tincan manufacturing industry.

Every year, he said, the NSC would ask the tincan manufacturers their projected requirement for the year.

The tincan manufacturers, Wassmer said, would normally double their projection.

The NSC, however, he admitted, would calculate a more realistic figure since overproducing tinplates which may not be eventually sold would add unnecessary burden to the steel firm.

The TCMAP fears that the NSC, as had happened in the past, would not be able to supply all of their needs and would lead to a rise in the cost of tinplates which they can import much cheaper.

By raising tariffs on tinplates to discourage their importation and protect NSC, the TCMAP warns that the local steel industry which has managed to survive and flourish without NSC, would finally suffer a fatal blow.