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Whet cement

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Whet cement

/ 05:15 AM August 07, 2017

Amid the ongoing building boom, we can expect a lot of noise about this construction mainstay called cement!

From what I heard, some groups already hired an expensive PR outfit for a media campaign against, one, the DTI and, two, the local cement manufacturing industry.

A few months ago, the DTI imposed new “safety” rules on imported cement, which swamped the domestic market by the millions upon millions of metric tons last year.

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The DTI noted a recent rash of importation that did not have the required “safety” markings, such as manufacturing date or batch number, during a field inspection of hardware stores in the countryside.

In other words, those could be substandard bags of cement. And who usually bought cement from the neighborhood hardware stores again? Yes, just the ordinary folk!

Still, some bold groups would want to challenge the “safety” rules of the DTI, insisting that the DTI was only favoring those huge evil heartless local manufacturers.

It would be “big business” versus the poor ordinary middleman all over again, some emotional appeal to stir up the mob.

The noise would possibly heighten just in time for the rush in infrastructure projects of the administration of the motorbiking Duterte Harley, its ambitious P8-trillion “build build build” program, which jump-started with almost P1 trillion in budget for 2018.

Together with the building boom in the private sector, the government infrastructure program would also whet the appetite for imported cement. Demand would move up to somewhere in the stratosphere in the next few years. In fact, local cement manufacturers already imported some 4 million MTs last year.

But how come DTI only imposed some stringent rules on the poor ordinary middleman, sparing the manufacturers?

In particular, the DTI ordered importers to secure the ICC, or import clearance certificate, attesting to the “safety” of the imports, which it did not require on manufacturers.

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Lopez answered that the DTI also imposed other rules on the manufacturers. Instead of the ICC, for instance, manufacturers must stamp their own brands on the bags of the imported cement—i.e. company name and guarantee, not to mention honor and reputation.

Manufacturers would thus have something more valuable at stake: The billions of pesos of investments in their factories.

On the other hand, how would the middleman account for the quality of imported cement brand, if they could just bring in any kind of cement, thanks to some special treatment from the government that they wanted?

Surely the DTI would also have to watch out for the viability of the local industry, since the flood of importation would dishearten local investors.

By its nature, cement manufacturing would need shiploads of investments. Eagle Cement, owned by the group of tycoon Ramon S. Ang, for instance, spent at least P12 billion on a new cement plant in Cebu. Another local cement manufacturer abandoned its plan to invest P27 billion in a new cement plant, deciding instead to join the import bandwagon.

The DTI would have to be careful that the cement would not suffer the same death of other industries—like textile, tires and ceramics—in the hands of imports in the past decades.

Now, in their quarrel with the DTI, the importers pointed out that they only wanted to do their part in nation building by offering competition to the local industry, thus assuring that prices would stay low. Well and good!

The more they must follow the “safety” rules, right? For the good of the people!

Precisely the low end of the cement market, those most likely to buy substandard cement rather unknowingly, would be the same guys who have to rebuild their homes, schools and stores in places like Marawi City, or the earthquake damaged Bohol, or the typhoon ravaged Eastern Visayas.

Heaven forbids if the guys down here in my barangay have no way to check if they are buying cheap cement—albeit “substandard.”

It will be more expensive for us in the long run. Also dangerous!

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TAGS: Building, Business, Cement
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