Cement makers warn of massive layoffs

By Ayen Infante

10/27/2008

Local cement makers warned of massive layoffs in the labor-intensive industry if the government pursues plans to remove tariffs on cement imports.

Cement Manufacturers Association of the Philippines president Ernesto Ordonez said while other countries are doing everything to protect their cement business, the government is doing otherwise by encouraging imports by eliminating the five percent tariff on cement.

Trade and Industry Secretary Peter Favila had recommended the lifting of the tariff on cement following the failure of the industry to submit the required documents the would justify their price increases.

Top cement producers had jacked up their prices by an average of P12 per bag allegedly due to the rising price of coal in the world market. Coal is a major component in cement production.

Ordonez said the government should not punish the whole industry just because some companies have been delinquent in submiting what the Department of Trade and Industry has been requiring on manufacturers.

“These are some arrogant guys, put them behind jail, but not hit the whole industry, that is not my idea of a cabinet official, he (Favila) should not harm the industy, he should go after those bastards,” Ordonez stressed.

By removing the tariff on imports, he said companies such as LaFarge, Cemex and Holcim are now seriously considering to restructure their workforce affecting hundreds of workers. The industry provides jobs to over 120,000 direct and indirect workers.

Ordonez who was also elected as president of the Asean Federation of Cement Manufacturers has arrived last week from a two-day conference in China.

He added 13 countries including non-Asean members like Korea, Japan, Taiwan, Hong Kong, Bangladesh and China have gathered to discuss the impact of global crisis on cement.

Since demand is falling worldwide, each countries are doing what they can to protect their industry.

“But here we are, we want to lift the tariff to encourage imports,” he said.

“We have the lowest protection among other countries not only in the region but in the world,” he added.

Malaysia maintains a 30 percent tariff on cement,

Vietnam which produces 36 million tons as against the Philippines with only 12 million tons, impose on imports a 40 percent duty.

Ordonez said members of the industry will hold a forum tomorrow to discuss the effects of the removal of tariff on cement imports on the local industry.

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