The dangers of imported cement

Unless our government does something fast, then we might as well say goodbye to our local cement industry.

According to a recent report from ReportLinker, imports of cement into the Philippines are forecasted to grow steadily over the next five years or from 2024 to 2028.

It noted that the value of cement imports is expected to be $734.74 million in 2024, rising to $871.6 million by 2028. In 2023, cement import value stood at $710 million.

The report explained that the year-on-year growth rates show an average variation of around 4.4 percent annually, indicating robust expansion in cement imports.

Meanwhile, another report from Global Cement quoting figures from the local Tariff Commission included a graph showing the speed at which the market share of cement sold by local producers fell compared to importers from 2013 to 2018. Seven of the top 10 cement exporters into the country were Vietnamese companies followed by two from China and one from Thailand.

The report concluded that the import surge from 2015 to 2018 had depressed prices and decreased the profitability of local producers and this fitted the definition of “serious injury” as one reason to impose a safeguard duty on imports.

The hardship being felt by the Philippine cement industry did not end in 2018.

Just recently, the Department of Trade and Industry initiated a preliminary investigation to determine whether increased imports of cement are causing or threatening to cause serious injury to the domestic cement industry covering the period 2019 to June 2024.

According to DTI, there is evidence indicating a significant increase in cement imports during the investigation period. In absolute terms, imports have steadily risen year-on-year from 2019 to 2023 with imports growing by 10 percent in 2020, 17 percent in 2021, and five percent in 2023. Additionally, the relative share of imports has also increased from 30 percent in 2019 to 47 percent in 2023 and further to 51 percent in the first half of 2024, the department added.

The DTI pointed out that based on initial findings, there is substantial evidence indicating that increased imports of cement have caused serious injury to the domestic industry and that this injury is manifested in declining market share, reduced production and sales, decreased capacity utilization, diminished profitability, price depression, undercutting and suppression.

It said that the significant increase in the volume of imported cement preceded the serious injury to the domestic industry in 2023. This surge in imports, it noted, has led to a shift in market share, with imported cement displacing domestic products. Consequently, the domestic industry has suffered serious injury, it added.

A report from The Observatory of Economic Complexity (OEC) revealed that in 2022, the Philippines imported $494 million in cement, thus becoming the fifth largest importer of cement in the world. In the same year, cement was the 75th most imported product in the Philippines.

Meanwhile, in September 2024, the value of Philippine cement exports reached $176,000 while that of imports amounted to $32.9 million, resulting in a negative trade balance of $32.7 million.

Another report revealed that in the first 10 months of 2024, Vietnam again was the main supplier, accounting for 94 percent of imports, followed by Japan at five percent and Indonesia at one percent. In the first half of 2024, import volume reached 51 percent of the market, up from 30 percent in 2019.

The DTI is looking at imposing safeguard duties on top of the regular import duties on cement. Safeguard duties, pursuant to Republic Act no. 8800, is a trade policy tool which allows government to remedy serious injury caused by increased imports but the department stressed that these measures are temporary and are implemented to give injured domestic industries time to adjust to import competition and be competitive.

But how can our domestic cement industry compete with imported cement, mostly coming from Vietnam, if they are being sold at dumped prices, to the detriment of Filipino users who are duped into using substandard imported cement just because they are cheaper.

Recent reports by Global Cement and International Cement Review quoted the Vietnam National Cement Association as admitting that their cement was being sold below cost for years and that major cement producers are now increasing their prices due to rising production costs from electricity, coal and packaging.

Even Chinese cement makers as early as 2018 have called on their Ministry of Commerce to launch anti-unfair competition and anti-dumping investigations against cheap cement coming from Vietnam.

Poor quality cement can compromise the integrity of constructions, whether small or large-scale, leading to issues such as cracks, leaks and structural failures. Cement forms the foundation of sturdy and resilient structures, providing the necessary binding agent for concrete and mortar. Inferior cement leads to weaker concreate, reducing its load-bearing capacity and making it more prone to cracks and defects.

Concrete structures using low quality cement are also more vulnerable to challenges from changes in weather by cracking, seepage of water and other forms of erosion. The quality of cement that one uses should never be compromised. Think of buildings and bridges collapsing. On the other hand, cement produced in the Philippines is especially made to endure local weather conditions.

So the next time you think of buying imported cement, consider the fact that you might be endangering people, including your loved ones, and wasting your precious investment.

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