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Consumer group fears of cement shortage

A consumer group warned that the country might face shortage in cement supply if the government would insist on imposing safeguard measures on cement importation.

In a statement yesterday, Laban Konsyumer Inc. (LKI) said this might derail private and public infrastructure projects.

The group made the statement as the Department of Trade and Industry (DTI) launched a probe of the cement importation’s impact on the domestic industry. The probe was launched without any complaint filed, a move allowed under the Safeguard Measures Act.

Safeguard measures are emergency relief provided to a domestic industry that is deemed “seriously injured” due to a sudden and sharp increase in imports, the DTI said on its website.

There are a number of measures that could be implemented for a given period, according to the law. These include an increase in or the imposition of duty on an imported product.

LKI president Victorio Dimagiba, who reached out to the DTI in September, said cement importers could not commit to long term contracts “due to the pending petition for the imposition of safeguard duty.”

“The imposition of the safeguard duty is detrimental to the consumers and can create shortages in the supply of cement that can derail private and infrastructure projects. [It] can increase retail prices,” he said.

Dimagiba, a former trade official, said the DTI should make sure local players had already completed their expansion plans before even starting a safeguard duty investigation.

He also said he was considering raising this issue to Malacañang and the Philippine Competition Commission, the latter is already in the process of probing a complaint against the industry as filed by Dimagiba.

The two sides, however, have conflicting claims on the state of the cement industry.

In a statement, the Cement Manufacturers’ Association of the Philippines said the local industry was capable of fully serving supply demands.

Moreover, safeguard measures, it said, were needed so that the local industry could “realize its full potential.”

The investigation covers the past few years starting in 2013. According to a DTI report, imports have been increasing since then, though at different rates.

The volume of imports increased by 70 percent in 2014 compared to the year before, then 4,391 percent in 2015, 549 percent in 2016 and 72 percent in 2017.

This translates to just 3,558 metric tons in 2013, increasing yearly until the import volume reached more than 3 million tons in 2017.

Vietnam accounted for the bulk of the imports, data showed. Its market share has been on the rise from about 66 percent in 2014 to 72 percent in 2017.

This is followed by China, which began in 2013 with a market share of only 0.98 percent until it covered 21.81 percent in 2017.