Roxas reassures GI sheet makers

Trade and Industry Secretary Manuel Roxas II has allayed fears raised by local GI sheet manufacturers of a possible unfair competition arising from the entry of a new investor in National Steel Corp.

In a letter to members of the Filipino Galvanizers Institute (FGI), Roxas said consultations with industry players will be conducted in connection with the planned rehabilitation and operation of the NSC, which will involve the entry of a new investor.

Earlier the FGI, consisting of nine GI sheet industry players, raised the possibility of an uneven playing field with the entry of a new investor in the NSC.

They claimed that lobbying and pressures are being exerted on concerned government agencies to provide for a tariff-free import privilege for the new NSC investor.

The incentive is meant to make the debt-ridden NSC more palatable for new financiers.

In a recent letter addressed to Roxas, FGI, with an annual consumption of 400,000 metric tons of cold rolled coils (CRC), urged the DTI to resist "the pressures and lobbying of these parties" for the government to grant incentives and perks "as a precondition to the award of the right or contract to lease or operate the NSC facilities."

"Any measure of this kind will have a negative impact on the competitiveness stature of the local galvanizing industry in particular and Philippine downstream steel industries in general.

FGI warned it would "vigorously" oppose any grant of tariff protection since this was precisely one of the reasons why the NSC has failed to raise its competitiveness in the wake of globalization.

"When tariff rates started to go down, the company was ill-equipped and ill-prepared to remain competitive as it could not wean away from the immense privileges it used to enjoy," FGI maintains.

While they agree that NSC has to be rehabilitated, FGI suggested that government chooses an investor or investors, which have proven technical and financial capabilities "and is in a position to infuse the capital needed to continuously operate the plant of this magnitude."

This, they said, will ensure that the new NSC "will be run professionally" and "spell out the success of the resumption of NSC facilities operations."

In his letter, Roxas assured them that their main concerns are being properly addressed, citing the creation of an evaluation committee to study the proposals from potential strategic investors.

He said any tariff privilege to be extended to the new investor will be carefully studied, noting that it has to be done in an integrated approach for the benefit of all industry players.

NSC, the country’s largest steel maker, suspended its operation last year to stop its deepening looses.

Officials blamed the influx of cheaper imported steel but critics say the company has failed to modernize itself during years of government ownership. It has more than P15.4 billion ($332 million) in debts, owed largely to local banks.