Imported cement ‘killing‘ local players
Vietnam cement exports to the Philippines were estimated at 7.2 million tons, accounting for 94.4 percent of the total. China, a key export market, reduced imports by 90 percent last year due to weak demand stemming from difficulties in the real estate sector.
Photograph courtesy of Vietnam Cement Association
Local cement manufacturers in the country emphasized that it is not the lack of orders that kills the domestic players, but the overwhelming arrival of imported cement.
During the fourth day of the hearing on Thursday at the Tariff Commission on the formal probe of imposing a definitive safeguard duty against importations of Ordinary Portland Cement (AHTN 2022 Subheading No. 2523.29.90) and Blended Cement (AHTN 2022 Subheading No. 2523.90.00), domestic cement manufacturers manifested that the local cement manufacturing plants are only using about 53 percent of their total production capacity, which stands at 51 million metric tons.
“This means nearly half of the local capacity is not being used,” members of the Cement Manufacturers Association of the Philippines (CeMAP) disclosed during the hearing.
More questioning
At the witness stand during the hearing, the cement importers’ witnesses were quizzed.
One of the key statements came from William Sumalinog, chief operating officer of Philcement, who claimed that “there is not enough supply” of cement in the country.
When confronted with the news article showing that CEMEX solely supplied for the construction of the longest bridge in the Philippines, Sumalinog stated that he did not know of that.
To show how underused the local industry is, it was also reported that the pyroprocessing unit of one of Republic Cement’s plants had to shut down.
“This highlights how local manufacturers are being forced to scale back operations, not due to lack of demand, but because of the pressure from rising imports,” CeMAP said.
Further, Sumalinog disclosed that during his time working at Holcim Philippines about five years ago, there was not enough supply in the market, which was contradicted by a public statement he made while he was at Holcim Philippines.
In a press release dated 10 September 2020, during the Mindanao Business Conference, he underscored the readiness of Holcim to supply the demand in Mindanao, which states: “We remain confident that we are well equipped to deliver great value and support to builders working to improve the competitiveness of Mindanao’s manufacturing sector.”