The Department of Trade and Industry (DTI) is initiating an investigation on whether to apply safeguard measures on imports of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) pellets and granules from various countries.
The preliminary investigation stems from allegations of JG Summit Petrochemical Corp. (JGSPC) that the increased HDPE and LLDPE imports caused “serious injury to the local industry,” DTI said in a notice posted on September 4.
HDPE is used to produce plastic bottles, corrosion-resistant piping, geomembranes and plastic lumber, while LLDPE is used for plastic bags and sheets, plastic wrap, stretch wrap, pouches, toys, covers, lids, pipes, buckets and containers, covering of cables, geomembranes, and flexible tubing.
JGSPC accounts for 100% of all domestic production of HDPE and LLDPE. It is the first and only integrated polyethylene and polypropylene resin manufacturer in the country.
DTI said that under Section 6 of Republic Act No. 8800 or the Safeguard Measures Act, it reviewed the evidence and determined a prima facie case exists to justify initiating a preliminary investigation into HDPE importation.
According to DTI’s report, significant increases in the volume of imported HDPE were seen in 2016 (181%), 2018 (9%), and 2019 (26%); LLDPE imports also grew 5% in 2016, 38% in 2018, and 9% in 2019.
There was also an “abrupt and notably sharp” increase in the volume of imports from 2015 to 2019, both in absolute terms and relative to domestic production.
“The industry suffered a loss of market share, declining domestic sales, production, utilization rate, reduction in labor productivity, cost of production, incurred losses, and increase inventory,” the report added.
As part of the investigation, DTI is encouraging interested parties to submit their views on the matter, including whether imposing a safeguard measure is in the public interest.
DTI has already notified the World Trade Organization of its initiation of preliminary investigation.