DTI weighs safeguard measures on importation of LPG cylinders
09 April 2023
DTI weighs safeguard measures on importation of LPG cylinders
The local LPG steel cylinder industry represented by Ferrotech Steel Corp. has filed an application for the imposition of safeguard measures on the importation of LPG cylinders from various countries, noting that the increase in imports has caused “serious injury” to the local industry, according to the Department of Trade and Industry (DTI).
“Ferrotech alleged that serious injury to the domestic industry was caused by the increased imports of LPG steel cylinders which are classified under Asean Harmonized Tariff Nomenclature [AHTN] Code 7311,” the DTI report noted.
In a notice signed by Trade Secretary Alfredo E. Pascual on March 29, 2023 but was released to the public on Tuesday, April 4 through the DTI website, the agency said it has officially received “properly” documented application from Ferrotech Steel Corp. for the initiation of a preliminary investigation on the application of safeguard measures on the importation of LPG steel cylinders.
With this, DTI, acting under Section 6 of Republic Act 8800 or the Safeguard Measures Act, said it has conducted an evaluation of the application. Upon the evaluation, it said it found the existence of a prima facie case that will justify the initiation of a preliminary safeguard measures investigation on the importation of the said product.
Ferrotech Steel Corp., the petitioner, manufactures LPG steel cylinders in the following sizes: 1kg, 2.7kg, 5kg, 7kg, 11kg, 22kg and 50kg, for industrial, commercial and household use, both for the domestic and Southeast Asian markets.
The LPG manufacturer’s head office and manufacturing plant are both located in Valenzuela City, DTI noted.
“We would like to request for 10 years duration of safeguard measures. This is in order for us to be competitive with imported LPG cylinders to remain viable and for the continuity of operation,” Ferrotech said in its application form.
Backed by data from the Bureau of Customs (BOC), the trade department showed that the share of domestic sales to the Philippine market contracted during the period of investigation (POI) of imports of LPG steel cylinders, which entered the Philippine market from 2017 to 2021.
According to DTI’s findings, imports continued to displace the domestic market and continued to cut into the industry’s sales and market share from 30 percent in 2018 to 10 percent in 2021.
“The loss of market share was taken by imports during the POI,” DTI said in its report, adding that this “dominance” persisted in 2020 and 2021 notwithstanding the Covid-19 pandemic.
The DTI noted the rate of import increased by 24 percent in 2019 and sharply increased by 45 percent in 2020. Meanwhile, imports reached 54 percent based on the 2021 level.
“During the POI, the industry suffered declines in sales, production, utilization rate, employment, profitability and even losses, and existence of price depression and price undercutting,” the DTI report noted.
With this, as part of its adjustment plan, DTI stated that petitioner domestic industry plans to procure new machines and equipment that offer the most advanced technology to help increase production capacity and efficiency.
Moreover, the petitioner plans to improve the skills and competitiveness of its employees through additional training, among others.
The local LPG steel cylinder industry represented by Ferrotech Steel Corp. has filed an application for the imposition of safeguard measures on the importation of LPG cylinders from various countries, noting that the increase in imports has caused “serious injury” to the local industry, according to the Department of Trade and Industry (DTI).
“Ferrotech alleged that serious injury to the domestic industry was caused by the increased imports of LPG steel cylinders which are classified under Asean Harmonized Tariff Nomenclature [AHTN] Code 7311,” the DTI report noted.
In a notice signed by Trade Secretary Alfredo E. Pascual on March 29, 2023 but was released to the public on Tuesday, April 4 through the DTI website, the agency said it has officially received “properly” documented application from Ferrotech Steel Corp. for the initiation of a preliminary investigation on the application of safeguard measures on the importation of LPG steel cylinders.
With this, DTI, acting under Section 6 of Republic Act 8800 or the Safeguard Measures Act, said it has conducted an evaluation of the application. Upon the evaluation, it said it found the existence of a prima facie case that will justify the initiation of a preliminary safeguard measures investigation on the importation of the said product.
Ferrotech Steel Corp., the petitioner, manufactures LPG steel cylinders in the following sizes: 1kg, 2.7kg, 5kg, 7kg, 11kg, 22kg and 50kg, for industrial, commercial and household use, both for the domestic and Southeast Asian markets.
The LPG manufacturer’s head office and manufacturing plant are both located in Valenzuela City, DTI noted.
“We would like to request for 10 years duration of safeguard measures. This is in order for us to be competitive with imported LPG cylinders to remain viable and for the continuity of operation,” Ferrotech said in its application form.
Backed by data from the Bureau of Customs (BOC), the trade department showed that the share of domestic sales to the Philippine market contracted during the period of investigation (POI) of imports of LPG steel cylinders, which entered the Philippine market from 2017 to 2021.
According to DTI’s findings, imports continued to displace the domestic market and continued to cut into the industry’s sales and market share from 30 percent in 2018 to 10 percent in 2021.
“The loss of market share was taken by imports during the POI,” DTI said in its report, adding that this “dominance” persisted in 2020 and 2021 notwithstanding the Covid-19 pandemic.
The DTI noted the rate of import increased by 24 percent in 2019 and sharply increased by 45 percent in 2020. Meanwhile, imports reached 54 percent based on the 2021 level.
“During the POI, the industry suffered declines in sales, production, utilization rate, employment, profitability and even losses, and existence of price depression and price undercutting,” the DTI report noted.
With this, as part of its adjustment plan, DTI stated that petitioner domestic industry plans to procure new machines and equipment that offer the most advanced technology to help increase production capacity and efficiency.
Moreover, the petitioner plans to improve the skills and competitiveness of its employees through additional training, among others.
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