Cement industry workers mull suit vs dumping firms

Laid-off workers of the cement industry have been talking with militant labor unions to plan a class suit against foreign cement manufacturers and local firms that have been importing the dumped products.

This, as a labor department official said the total number of workers dislocated by the forced slash in manufacturing output has hit 613.

A labor leader of Mindanao Portland Cement Corp., one of three cement producers that closed shop last December, also said workers still holding on to their jobs could join the suit demanding damages and compensation from the private firms who have been dumping cheap products, and government officials who tolerated the illegal practice.

He noted that the collapse of three companies has dislocated at least 300 workers and damaged income opportunities for those who conduct business with the three firms. A government official had earlier said labor has lost P2 million in monthly income this year.

With 613 other workers laid-off, cement industry rank-and-file lost P6 million in earnings in the first month of the millennium.

A breakdown of retrenchment on the industry lists the following: Solid Cement Corp., 46; FR Cement Corp., 92; Republic Cement, 5; Fortune Cement, 9; Continental Cement, 61; Hi Cement, 5; Alsons Cement, 53: Iligan Cement, 109; Lloyds Richfield Industrial Corp., 111; and Apo Cement, 122.

Mindanao Cement posted P289 million in losses last year while Rizal Cement declared P153 million. Figures for the third firm that closed down, Titan Cement Corp., were not available.

Trade and Industry department officials also bared the list of income losses of the 19 Philippine cement manufacturers. Led by top loser, FR Cement, with P1 billion; the other firms with losses include:

Alsons -- P953.1 million; Bacnotan, P67.3 million; Continental -- P840.5 million; Davao Union - P325.2 million; Fortune -- P313.9 million; Hi -- P209.8 million; Iligan -- P32 million; Lloyd's -- P364.1 million; Northern -- P86 million; Pacific -- P25.9 million; Republic -- P204.7 million; and Solid -- P248.2 million.

Only Apo Cement showed profit of P183 million.

The losses become more striking beside 1998 income figures. Alsons, for example earned P40.3 million that year. Continental earned P39 million; Fortune, a positive P77.1 million.

Davao's loss was only P263 million. FR losses were only P670 million; Hi, P7.6 million; and Lloyd's, P326 million.

Government experts have acknowledged P10 billion in losses over the past two years due to the flood of dumped cement imports from Taiwan and Japan. They warned that annual losses would double annually unless officials force importers to acknowledge the legitimate price of the threatening products.

The very cheap price of imported cement -- sold here at $20 a ton compared to the $60/ton prevailing price in Japan and Taiwan have allowed foreign products to hog 10 percent of the local consumer market.

In local terms, Taiwan Cement has been undercutting Philippine products by P5 to P7 per bag. The company controls 68 percent of the total import market.

The 54 million bags snatched from local products, at a price of a conservative P92 per bag, would have already cost P4.9 billion in lost sales.

DTI sources underscored how dumped cement, or products sold at prices much lower than their manufacturing value, have delayed the recovery of the cement industry.

Reacting to the submission of a formal anti-dumping complaint by the Philippine Cement Manufacturers (Philcemcor), the DTI officials said total industry losses has been almost doubling since two global cement giants - Taiwan Cement Corp. of billionaire Jeffrey Koo and Japan's Southern Cross Cement Corp. - have been flooding the market with products sold at just a third of the price in their home countries.

"In addition to the P5.7-billion loss last year and the P3.5-billion loss in 1998, you have to factor in government earnings through income taxes, duties of raw materials, and on other industry costs like power and project development," the official said. he placed the government income loss share at near P3 billion, stressing this was a "conservative estimate."

Workers expressed anger over dumping, noting that losers are not fly-by-night investors, or so-called "hot money," but long term investors who have already invested billions of dollars into the Philippine economy.

The danger here, he stressed, is that when the economy begins to recover, local manufacturers would be so badly hurt and no longer be able to rise to the challenges of growth.

Already, he pointed out, capacity utilization has gone down, from 62.9 percent to 57.2 percent, in just one year. Unless the government halts dumping, the labor leader warned, thousands of workers may lose their jobs in the next two years.