Asahi Glass presses duty on imported glass

The imposition of safeguard measures on imported glass will not result in a shortage of figured, float and mirror glass in the country, nor will it result in a political or economic crisis, according to a position paper of Asahi Glass Philippines Inc. (AGP).

AGP said the safeguard duty is necessary because the market structure of the local flat glass industry is that it is highly capital intensive with a small but growing market.

"The size of the Philippine market is not comparable even with its ASEAN counterparts whose markets are two to four times bigger," AGP said.

"In fact, economies of scale is inherent in its operations. Thus, the size of a glass plant installation is influenced by the size of the domestic market. This is one reason why the local flat glass industry currently operates single plant primary manufacturing facilities unlike the others," it added.

Furthermore, AGP said, the present manufacturing capacities of the local industry is underutilized due to reduced market share caused by import surge.

AGP said the figured glass plant and the mirroring line are running at 54 percent and 42 percent capacity.

"With the safety net of a safeguard measure and implementation of an adjustment plan, higher capacity utilization can be achieved," AGP said.

In fact, AGP noted, there is enough capacity to fill market demand and, therefore, the imposition of the safeguard measure would not cause shortage of supply for glass products.

The glass firm also argued that a non-imposition of safeguard measures would adversely affect the long-term viability of the local flat glass industry that could lead to a forced shutdown of manufacturing operations.

"The eventual phase-out of local glass making activity would put to waste the acquired technology accumulated through the years and put in grave peril the continued livelihood of thousands of workers dependent on the industry," AGP said.

"More importantly, local consumers would be placed at the mercy of foreign suppliers of glass," it added.

According to AGP, the flat glass manufacturing industry has significant linkages with domestic industries.

Sufficient volume of its raw materials are sourced from local mining and quarrying operations, while a major bulk of flat glass sales cater primarily to local construction and to the automotive, appliance, furniture, aluminum, steel and other fabricating industries.

AGP is petitioning the government for the imposition of safeguard measures on imported glass coming from China, Korea and Vietnam.