Chemphil may close shop due to import lib program

Chemical Industries of the Philippines Inc. (Chemphil Group) — the country’s sole manufacturer of Sodium Tripolyphosphates-Technical Grade (STTP-TG) — the raw material used in laundry detergents, said they will close operation by end of May if the Department of Trade and Industry (DTI) will not reconsider its decision to lift the safeguards on STTP-TG importation.

"If this continues, we will close in a month’s time or no later than May 30," Alexandra Garcia-Verzosa, chief operating officer and director of Chemphil said in an interview. 

Verzosa said they have already asked DTI Secretary Peter B. Favila for an audience but their letter, which was sent weeks ago, remained unanswered.

Chemphil has been operating for almost 49 years and has over 200 employees. However, since the import surge of STTP-TG in 2002, the firm was forced to operate on a smaller scale and downsize to only 30 employees.

The import surge has lessened the demand for locally produced STTP-TG. To maximize plant capacity, Verzosa said they need to supply 72.7 percent of the market which translates to 2,000 tons per month. 

According to Verzosa, they are not looking for permanent tariff. "We just need the safeguard measure for three years. We have a three-year plan that will make us competitive after three years," she noted.

As part of their three-year plan, Verzosa said Chemphil will invest P10 to P20 million. The money, which will be generated internally, will be used to help the plant become more cost effective. One of the cost cutting measures to be implemented is the shift from the use of kerosene to Liquefied Petroleum Gas (LPG).

Available data show that Chemphil has been operating at a loss in 2001 — P277.7 million and 2002 – 274.5 million, it has received a respite in 2003.

"We cannot sustain this. We need the safeguards," she reiterated. Verzosa said Chemphil is already in debt. The company owes suppliers and local banks specifically the Land Bank of the Philippines and PbCom a total of P200 million.

According to Verzosa, if the Trade Secretary will not heed their call they will be forced to go to the Court of Tax Appeals.

Fair Trade Alliance (FTA) Lead Convenor Wigberto Tañada said there has been no precedent that the DTI Secretary reversed its own decision regarding a tariff case.

"It is difficult but we are still hoping," Tañada said. He said a case may be filed against Favila for grave abuse of discretion amounting to lack of or in excess of jurisdiction.