The safeguard duty to be imposed by the government on imported cement is not expected to cause a shortage of the construction commodity in the coming months, according to local cement manufacturers.
On the sidelines of the European Chamber of Commerce of the Philippines briefing, ECCP President and Republic Cement Chief Executive Officer (CEO) Nabil Francis told reporters that the Philippines has everything it needs to produce cement locally.
Francis said many local cement plants have sufficient capacities and that many of them are investing, including Republic Cement. He said producing cement locally will create thousands of jobs and rake in billions in revenues.
“There will be no cement shortage for two reasons. Today the local players still have enough capacities and also a lot of investments are ongoing,” Francis said.
“The government and the DTI [Department of Trade and Industry] has taken a very positive step. It’s a good measure that somehow is going to help the industry to recover,” he added.
Francis said local cement plants are in the process of acquiring new equipment, which will be coming in “no later than this year,” which will boost local cement production.
Republic Cement, for its part, is increasing its grinding capacity and will be commissioning two new mills that will be able to produce over 50 million bags or 2 million metric tons. This will see Republic Cement increase its total capacity to 9 million metric tons.
He said importers only account for 15 percent of market share. Slapping a provisional tax of P8.40 per bag, or a safeguard tax of 4 percent, on imported cement will help protect jobs in the country.
Francis said a regular cement plant would employ some 6,000 to 7,000 employees directly and indirectly, and would amount to around P10 billion worth of investments.
“We have everything here so we need to manufacture our own cement in the Philippines. Why should we capitalize on [imported] goods? This is a good step. It means in this country it will create new investments, we will have additional plants,” Francis said.
Last week Trade Secretary Ramon M. Lopez said the government found the P8.40-per-bag duty the right amount that will ensure prices and supply are stable while the protectionist measure is in place.
He said imports will still be allowed and should continue to promote competition. He also claimed domestic capacity is at 35 million metric tons and can meet the demand estimate of about 25 million MT.
Philcement Corp. President and CEO Eduardo A. Sahagun earlier claimed cement supply could fall short if the DTI places a safeguard duty on imports, as he argued local producers are incapable of supplying the country’s requirement.
Domestic players produced 24.04 million tons of cement in 2015, but the demand was at 24.36 million tons, Sahagun said, citing data from the Cement Manufacturers’ Association of the Philippines, the DTI’s Bureau of Import Services and the Bureau of Customs.
The requirement in 2016 expanded to 25.96 million tons, but production slowed to 23.49 million tons. The gap further widened in 2017, as demand accelerated to 28.55 million tons, while domestic supply was at 25.57 million tons only.