Local cement manufacturers have issued an appeal for Filipinos and developers to adopt “Buy local, Build local” as they slammed continued cement dumping from Vietnam causing over production capacity among local plants, downscaling of operations, and to a certain extent retrenchment of workers.
In a statement, the Cement Manufacturers Association of the Philippines (CEMAP) pointed out that local manufacturers invested additional capacity totaling to 17 million tons per annum (MTPA) over the last five years. The investments were poured in by San Miguel Group with over six MTPA, Taiheiyo over three MTPA, Republic two MTPA, Cemex 1.5 MTPA, Holcim with 1.4 MTPA, and other players with three MTPA.
“These bring total local cement production capacity to 53 MT in 2024 while demand continues to contract and currently forecasted to rest at 34.5 MT in 2024,” CEMAP said.
Despite the more than adequate supply, the industry continues to be plagued by the continuing influx of imports, mostly from VietNam, despite the imposition of dumping duties to certain manufacturers and exporters, the group said.
The group alleged that cement importers brought in close to seven million tons (MT) in 2023, which was even higher than 2022.
According to CEMAP, importation is expected to rise even further following a six percent contraction in the Vietnamese cement market. With that, CEMAP said that Vietnamese producers will look towards exports to improve industry performance, with local manufacturers calling for a reduction on export taxes levied on cement.
“This indicates that more imports are on their way to be dumped in the Philippines in the coming months, further causing serious injury to the already beleaguered Philippine cement industry,” the group added.
Aside from capacity expansion, CEMAP said that local manufacturers have also invested heavily in reducing the carbon footprint in its operations to make its operations more sustainable and they have introduced products and solutions in the market that have lower carbon footprint compared to the traditional imported cement brought into the Philippines which have higher carbon footprint.
The local cement industry contributes significantly to the Philippine economy, accounting for at least one percent of the GDP. The domestic industry has invested several billions in the country’s manufacturing sector, generates an estimated 130,000 direct and indirect jobs and contributes a multiplier of around 3x to the economy plus it generates more tax revenues for the government compared to importers of cement.
Already, CEMAP said that Philippine cement industry has been forced to downscale operations as imports continue to cannibalize the market, and in certain cases lay off workers due to the worsening market situation. With the projected increase of cement imports, local
manufacturers will be forced to further downscale operations until demand recovers or importers cease dumping and exploiting the local market,” CEMAP added.
To directly address the threats from imported cement, CEMAP and Eagle Cement Corporation, in partnership with the Department of Trade and Industry continued to push its Buy Local, Build Lokal campaign. The campaign encourages the individual Filipino consumer as well as local developers to exercise sustainable business judgment and do their part in protecting the Philippine domestic industry by prioritizing the use of locally manufactured cement.
It cited a government statement urging for local preference and prioritizing procuring locally manufactured cement for government infrastructure projects.
By starting with government-led consumption, which accounts for 40 percent of total demand, this will reduce reliance on imported products, encourage investments in the sector, create and maintain thousands of jobs, generate more tax revenues, significantly save the country’s dollar reserves, and ultimately support the growth of the industry and boost economic development.
With public and private sectors pushing for Buy Local, Build Lokal program and the local industry protected from unfair trade, CEMAP hopes for a fighting chance this year.
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The article was originally published in Manila Bulletin and written by Bernie Cahiles-Magkilat.
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