Local cement firms plan to dump cement in Taiwan

Local cement companies led by Alsons Cement Corp. (Alcem) are planning to dump cement into Taiwan in retaliation to the dumping of cheap cement into the Philippines by Taiwanese firms.

The Mindanao-based Alsons Cement revealed yesterday that it was able to make one shipment to Taiwan last year and is urging other cement companies to do the same thing.

Alsons chief operating officer Tom Clough told reporters that Alsons is planning to export more of its surplus to Taiwan this year also at dumped prices, to demonstrate that it is possible for Philippine cement producers to create the same impact in the Taiwanese cement industry.

The cement industry has a pending anti-dumping case against Taiwan and Japan, which had been steadily increasing their exports at prices below their respective domestic prices.

According to Clough, Alcem shipped roughly 8,000 metric tons of cement to Taiwan last year, at "basically dumped prices." He said Alcem is selling at a price level lower than domestic prices but higher than the prevailing $20 per metric ton ex-terminal price for shipments arriving from Taiwan.

"We are not big enough to make that much of an impact in Taiwan but this is to demonstrate that it is also possible for us to export to them the way they are exporting to us," Clough said. "We hope other people would do the same thing." Clough explained that the actual volume need not be significant in order to trigger a price war. "It doesn't take huge volumes to wreck prices," he said.

Clough said the Taiwanese government requires all exporters to confine their first three shipments to the port for at least seven days while authorities test the commodity for quality.

"Just imagine how much these seven days end up costing us," he said. "If that isn't a trade barrier, I don't know what is."

Clough said Alcem exports part of its production to Hong Kong and Singapore. Part of this year's shipment, he said, will be diverted to Taiwan but he admitted that the company will have to absorb more losses out of these shipments.

Clough said Alcem would be exporting what can not be sold in the Philippine market. But he brushed aside speculations that domestic cement prices will end up subsidizing the losses suffered by the company as a result.

However, Clough admitted that Alcem is not in the position to sustain steady dumping of cement into Taiwan. "We just want them to feel the same pain," he said. "It's just fair, if they're doing it to us why can't we do it to them?"

Since Taiwan started exporting to the Philippines last year, total imports have gone up from seven percent of the total market for the whole of 1999 to eight percent during the first three months of the year. Imports are expected to account for as much as 20 percent for the whole year.

"We do not want to stop imports," Clough stressed. "In fact, if imports were priced fairly, we are confident that we can compete."

Clough said it is pointless to compete with imports in terms of pricing since importers can take their prices as low as it will take to steal market share from domestic producers.