DTI orders probe on imported glass

Asahi Glass Philippines claimed that entry of imported figured glass and glass mirrors posed negative impact to the local glass industry, such as: decrease in market size, net loss in sales, decrease in production, adverse effects on productivity, diminishing profitability, retrenchment in employment, and increased inventory.

Roxas said: “What we would like to achieve with our efforts is to further shield the local industries from unfair competition and provide them a level playing field to enhance our products’ competitive advantage.”

The import share of figured glass rose from 11 percent in 1997 to 28 percent in August 2002. It was during this period when the industry suffered a 72 percent decline in domestic sales. In fact, sales revenues dipped to P214 million from P345 million in 1997.

This significant decline is also manifested in the industry’s production capacity down to 434, 000 cases from 768, 000 in 1997, while the rated capacity suffered a downtrend at 72 percent from 93 percent in the same year.

Also, inventories were logged at 73 percent of 2001 level of 143,000 cases and cost of production shot up to P534 per case from its 1997 cost of P 374 per case. Industry net losses were incurred from 1998 until August 2002 from a net profit of P68 million in 1997. Gross profit rates dipped to 10 percent from 34 percent in 1997 and employment rate was down at 26 percent. The rest of the industry’s losses are further shown by price undercutting at an average of 10 percent and price depression at 11 percent of domestic prices. Also, margins of profits declined from 60 percent to 13 percent in five years.

Observers also noted that at the time when the volume of glass imports surged in 1997-1999 and August 2002, the overall performance of the domestic industry suffered. This is shown in the 12 percent price undercutting in 2001 and lowered landed cost at 10 percent in August 2002 than most local products.

On the other hand, the import volume for glass mirrors posted a 151 percent of the 1997 level from January until August 2002, higher by 30 percent in terms of 2001 imports. Its import share to domestic productions was also up by 104% with an increased market share of 51 percent from 34 percent in 2001.

Aside from these, its reported sales volume was up by 64 percent with sales revenue at 56 percent higher than the 2001 level. Its production was also up at 44 percent of the 1997 level with capacity utilization recorded at 42 percent.

Other significant increases were inventories at 47 percent over 2001 at 22,000 cases, cost of production at P1, 200/case from a low of P864/case in 1999 and gross profit logged at P5 million or 26 percent of the 2001 level.

Sales revenue for glass mirrors was at P71 million, 56 percent of 2001 with net profit of negative two centavos for every peso earned. Also, employment rate dipped to 26 from its 58 employees in 1997. Other losses were also posted in terms of price undercutting at landed cost of 26 percent lower than domestic prices, price depression at five percent of domestic selling price and domestic prices depressed by 13 percent to retain its competitiveness in the Philippine market. Notably too, landed cost of import was much lower than the domestic selling prices and the margins of profit on a downtrend.

These negative developments were recorded at the same time that increased imports from various countries entered the Philippine market. Figured glass came mostly from China, Thailand and South Africa while glass mirrors came from China, Indonesia, Taiwan, Thailand and Korea.

Figured glass is used for window, partitions, screens, doors and fluorescent fixtures of residence, offices, hotels, shops and other commercial and industrial buildings.

Glass mirrors, whether framed or otherwise, are used for wardrobe doors, bathroom, furniture, projection screens, display cases, decorative wall and ceiling/pillar cases.

The Bureau of Import Services (BIS) is a DTI agency under Consumer Welfare and Trade Regulation Group (CWTRG) tasked to monitor the transactions. Comments and positions from interested parties may be sent to the office of the Bureau of Import Services at 3F OPPEN Bldg., 349 Sen. G. Puyat Ave., Makati City. /The DTI is mandated to conduct safeguard measures investigation under Section 6 of RA 8880 or the Safeguard Measures Act.