A local producer of galvanized iron and pre-painted iron sheets and coils called on the Philippine government to put safeguards against the importation of similar but substandard products from China which are said to be causing “serious injury” to the domestic industry.
Enrique Chuidian, general manager of Puyat Steel Corp., said that the local steel roofing industry has been the dumping ground for substandard and subsidized imports from China.
“The Philippines needs to put in safeguard duties against these imports before another tragedy strikes. The country cannot afford the greater tragedy of Filipinos losing jobs to Chinese laborers producing low-quality products,” Chuidian said.
The executive believes that allowing and continuing to accept these substandard products from China is not only a blow to the local manufacturing industry but also a blow to our countrymen who are starting to rebuild in the wake of the tragedies that have struck the country.
“By imposing safeguard duties, the local industry can stand a chance in competing with imported products, increase capacity utilization, generate more employment, and lower production costs which could result in lower domestic prices,” he added.
In 2012, Chinese exports of GI sheets reached 134,777 metric tons. This increased to 211,795 MT in 2013. Chuidian said that amount of tonnage could have been produced by local manufacturers and could have provided jobs to Filipinos and increased the national gross domestic product (GDP).
“Instead, the country lost valuable foreign exchange, lost jobs, and became a dumping ground for poor quality Chinese steel roofs. And look what happened to these roofs when Typhoon Yolanda struck,” he said.
Since government’s challenge to modernize and become globally competitive in the 1990s, the executive said that the local steel industry has upgraded their manufacturing capability and increased their GI sheet production capacity to around 750,000 MT per year and for pre-painted roofing materials to 240,000 MT per year.
“These capacities can cover double the estimated annual demand of 300,000 MT given by the Philippine Association of Steelformers, Inc (PASI),” he said.
“Unfortunately, due to the oversupply of steel products in China and the resulting deadly surge of cheap and substandard steel products exported to the Philippines, local manufacturers have not been able to fully utilize this excess capacity which can more than cover the country’s current and future steel roofing requirements,” he said.
Chuidian said that by utilizing this capacity, local manufacturers can have a more efficient process and be able to manufacture more products, generate more jobs and even lower the cost of products as a result of lower production costs.
This excess capacity can be seen in the aftermath of Yolanda’s devastating effect in the Visayas Region. Puyat Steel was the first key local manufacturer that supported the Department of Trade and Industry (DTI) through their Diskuwento Caravan in affected areas. Puyat Steel supplied GI sheets together with DTI at discounted prices to ensure that quality products at affordable prices were available to help the calamity victims, unlike other insensitive suppliers who were selling at higher than that usual SRP (suggested retail price), said Chuidian.
“Reports from the field show prices of GI corrugated sheets in the Tacloban area increased by as much as 100 percent. Puyat Steel made a conscious effort to help our afflicted countrymen by providing quality products at discounted rates to help in the rebuilding efforts in afflicted areas,” Chuidian said.
Puyat Steel was also the first company to supply the Department of Public Works and Highways (DPWH) with their immediate requirement for quality GI roofing in the areas affected by Yolanda to be used for temporary shelter as well as other reconstruction efforts, Chuidian said. Importers were asked to join but could not supply the right quality product at the right time as required by DPWH.
“We at Puyat Steel support DPWH and the government in their efforts to rebuild the devastated areas the right way and with the right product. It would be insensitive and inefficient to rebuild using substandard products which will not only cost more in the long run, but put our countrymen in even greater harm should similar natural or man-made disasters take place,” Chuidian said.
Contrary to the claim of other sectors, Puyat Steel said it has submitted its application for safeguard duties not only to make use of the excess capacity of the local steel manufacturing industry but, more importantly, protect the interest of the consuming public who have been flooded with cheap substandard products from China.
“Substandard products were evident in the report given by the Philippine Iron and Steel Institute (PISI) in the Senate public hearing investigating the proliferation of substandard steel products and smuggling of imported steel products last April 7, 2014,” he cited.