Biz Buzz: Cement wars
We clearly haven’t heard the last of this raging dispute between large local cement manufacturers and importers. Not when the stakes are in the billions of pesos.
According to an informal group of cement importers—who are trumpeting the more affordable cement products they import as the key proposition—big cement manufacturers should not be allowed to have their cake and eat it, too.
These importers are arguing that these big firms’ investments in cement manufacturing plants, which provide jobs in the process, do not give them the license to exploit consumers through price and supply manipulation in collusion with some Department of Trade and Industry officials to form a cartel.
These small cement importers and stakeholders have raised a collective howl over DTI’s order earlier this year requiring cement importers to obtain an Import Commodity Clearance (ICC) on top of the Product Safety (PS) mark. This order, the importers claim, exempts the big cement manufacturers from the same ICC requirement.
These small players have slammed this requirement as “grossly biased” since it would allow the giant manufacturers to dominate the cement industry by acting as a cartel, and thus, gain full control of the lucrative construction projects under the Duterte administration’s infrastructure program.
The DTI insists this standard is being done is to ensure consumer protection and ensure the high quality of cement that enters the country. The small importers, however, are not buying DTI’s arguments.
The importers argue there is no proliferation of substandard imported cement in the domestic market as both they and the big manufacturers get their supply from the same sources abroad. As such, the quality should be the same across the board.
In fact, importers claim that those who make such claim are shooting from the hip.
For one, they argue that this line of reasoning undermines DTI’s own certification scheme. This DTI process conforms to ISO 15067 and other international standards. “So does this mean other countries allow substandard imports?” the small importers ask.
They also noted that there have so far been no consumer complaints against the quality of imported cement.
To level the playing field, the small importers now want big cement manufacturers to submit themselves as well to preshipment tests, citing their many advantages.
The importers point out that the obvious ulterior motive behind DTI’s restrictions on cement imports is nothing less than to pave the way for the giant manufacturers to monopolize cement supply and prices in the country to gain full control of the administration’s infrastructure program.
Not so, say large local cement manufacturers.
One official pointed out that DTI is replete with evidence of imported cement shipments that failed quality standard tests. In fact, some of the importation that failed quality control were covered by certification documents from foreign sources, he said.
And the cement manufacturers say their shipments are also being subjected to the same rigorous inspection process before being released into the market (“And we don’t whine about it,” said one official).
With billions of pesos worth of infrastructure at stake, don’t expect this argument to be settled soon. Abangan! —DAXIM L. LUCAS
New Macquarie Cap chief
Deal-making veteran Justino Ocampo, senior vice president and head of investment banking at First Metro Investment Corp., is leaving his post at the end of the month to accept a new challenge of heading the local unit of a foreign investment house. Incidentally, it seems that Ocampo, who joined FMIC in 2010, has felt the so-called seven-year itch.
We heard from the grapevine that Ocampo had been contracted to lead the Philippine unit of Australian investment house Macquarie Capital. To recall, Macquarie’s Michael de Guzman has moved to the local unit of Credit Suisse.
Ocampo is no stranger to foreign houses, having worked at Royal Bank of Scotland and ABN-Amro (where he spent nine years) previously.
With Ocampo’s transfer, FMIC old-timer Jojo Marcelo will resume running the investment banking unit of FMIC. —DORIS DUMLAO-ABADILLA
Lexus’ latest
One would be forgiven for thinking that buyers of ultra high end cars are a minority in the Philippines. After all, the country is still considered a developing nation, and many people remain focused on meeting their basic needs before moving up the chain of more expensive purchases.
But the latest word for the local unit of luxury carmaker Lexus seems to show otherwise.
In particular, we’re talking about the latest offering of the Japanese luxury brand which is the LC 500 sports car, which was officially launched Thursday evening at Lexus Manila’s showroom in Bonifacio Global City in Taguig.
The gleaming red model on display was unveiled to ooohs and ahhs of the Lexus faithful and has already accumulated a backlog of orders and reservations from it Filipino clientele.
And it’s not difficult to see why. The LC 500—which its specifications indicate comes very close to the supercar category—has jaw-dropping features like a 4.7-liter, 8-cylinder, 32-valve engine that delivers 477 horsepower; 10-speed automatic transmission which would make any ride feel seamless (even on Metro Manila roads), and Euro 6 emission levels.
It also comes with all the high end bells and whistles expected of a Lexus, including a 13-speaker audio entertainment system. Thirteen—perfect for drowning out the rumble of the engine that comes out of its four tailpipes.
Of course, Lexus luxury vehicles don’t come cheap, and the LC 500 even less so. So anyone who wants to drive it would have to whip out his or her checkbook and fork out a feng shui-friendly price of P8,888,000.
It’s a steep price, and Biz Buzz hears that other Lexus distributors around the region are ecstatic to sell anywhere between five and 20 units for its top end product. So how many in the Philippines are buying the LC 500? We understand that Lexus Manila has, so far, received reservations and firm orders for—hold your breath—80 of these luxury sports cars, with about 30 to be delivered in 2017.
Who says the Philippines is a small market? —DAXIM L. LUCAS
