Ho Chi Minh City, Vietnam – The Philippines can learn a thing or two from the booming Vietnam steel industry, a local player here said.
In an interview, Le The Binh, senior manager of Sumitomo Corp. Vietnam LLC said that they have a very aggressive local industry because the local players are investing heavily. He said that the locals are not afraid to invest further because the demand is high.
Because of the strong domestic investment appetite and the big demand, Le said foreign players look at the country favorably and are not afraid to invest themselves. “We have very aggressive local players and the demand here is strong.”
Le said they are now making very thin coated steel for exports in countries like Cambodia and Africa.
Likewise, to develop the local industry Le said they give tax incentives and impose high tariffs against imported similar products.
Meanwhile, Trade Undersecretary Zenaida C. Maglaya said that the local price of steel must be lower now given the removal of the tariff and the lowering of the price in the world market. The Filipino Galvanizers Institute (FGI) met with the DTI to discuss the impact of the tariff removal on the prices. “We have to wait for the result of the meeting but I think the SRP should be lower,” Maglaya said.
The government has removed the seven percent tariff on imported CRC and HRC after Indian firm Global Steel failed to provide 50 percent of the domestic demand. The law was signed last June 22 as Executive Order 898
The Tariff Commission has reduced the tariff to zero because according to the agreement between Global Steel and the government, a tariff of seven percent will be imposed on imported CRC and HRC provided they can meet at least 50 percent of the local demand.
Global Steel has been unable to meet the requirement. The seven percent tariff will be restored if and when Global Steel will be able to follow the Executive Order which requires that the firm meet local demand.
Global Steel has admitted they have been having problems with their operations for years and the lifting of the seven percent tariff on steel has endangered their already precarious operations.