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DTI probes dumping of cement from Vietnam

  • The Department of Trade and Industry (DTI) is initiating an anti-dumping investigation on cement from Vietnam alleged to be imported into the Philippines at dumped prices
  • There was a substantial margin of dumping from July 2019 to June 2020 based on the domestic wholesale and export prices as gathered by the cement industry
  • The local industry has suffered loss of market share; declining domestic sales, production, utilization rate; reduction in employment; and increased cost of production and inventory as a result

The Department of Trade and Industry (DTI) is initiating an anti-dumping investigation on cement from Vietnam following allegations these are being imported at dumped prices, hurting the domestic cement industry.

This follows the individual applications for an anti-dumping investigation lodged last year by Cemex Philippines; Holcim Philippines, Inc.; and Republic Cement Builders and Building Materials, Inc. These local cement manufacturers alleged that imports of cement originating from the Southeast Asian country are being dumped in the country and causing injury to the domestic industry.

In an April 20 notice, Trade Secretary Ramon Lopez said DTI, acting under Republic Act (RA) 8752 or the Anti-Dumping Act of 1999, reviewed the evidence provided with the application and “has determined the existence of sufficient evidence to justify the initiation of an investigation.”

Section 2 of RA 8752 provides that it is “the policy of the State to protect domestic enterprises against unfair foreign competition and trade practices. Towards this end, substantive and procedural remedies available to domestic enterprises shall be strengthened and made responsive to recent developments in world trade.”

The products covered by the petition fall under AHTN Codes 2523.29.90 and 2523.90.00 for Type 1 and Type 1P cement. These types are use for high-strength concrete designs with a minimal cement factor requirement (ready-mixed concrete), projects with tight completion schedules, pre-cast and pre-stressed concrete, and infrastructure projects such as roads, dams, bridges, railway structures, mega-structures, high-rise buildings, and condominiums.

In a report on the initiation of investigation, DTI said there was a substantial margin of dumping of cement from Vietnam from July 2019 to June 2020 based on the domestic wholesale and export prices as gathered by the cement industry. The industry claimed that the dumped imports of cement began causing injury in 2019.

DTI said the volume of dumped imports and significant dumping margins have affected the operations of the local industry.

Since 2019, despite the safeguard duty, the volume of dumped imports to Philippine cement imports from Vietnam accounted for 31% of total imports in 2019 (July to December) and has increased to 62% in 2020 (January to June).

READ: DTI increases safeguard duty on cement as import volumes rebound

Under RA 8752, the volume of the allegedly dumped products from a particular country should normally be regarded as negligible if it accounts for less than 3% of the total imports.

DTI noted that the volume of alleged dumped cement product satisfies the de minimis volume requirement of 3%.

The volume of cement imported from Vietnam also exhibited an increasing trend, rising by 29% between 2017 and 2018, and by a further 28% in 2019.

According to the cement industry, Vietnam has been a major threat to the Philippine market as a source of cheap cement imports.

A comparison between the export price and normal value of cement from Vietnam for July to December 2019 also indicated a dumping margin ranging from US$1.75 per metric ton (MT) to $5.36 per MT or 3.49% to 10.66%. For January to June 2020, dumping margins ranged from $1.66 per MT to $6.54 per MT or 3.31% to 14.46%.

DTI said also harming the local industry is price undercutting, which was determined at 23% in 2019 and 24% from January to June 2020.

“The industry suffered loss of market share, declining domestic sales, production, utilization rate, reduction in employment, increased cost of production and inventory,” DTI said.

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