THE local petrochemical industry is seeking government protection through safeguard duties on imported resins used for the production of plastic goods.
In a statement on Thursday, JG Summit Olefins Corp. (JGSOC) said that along with the local petrochemical industry, they are hoping that the government can protect and support Philippine manufacturers from “unfair foreign competition” amid the reported surged in the import volume of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE).
“The duties are being requested to safeguard the local manufacturing industry. Historically, HDPE and LLDPE imports tend to undercut the prices of the domestic industry,” the company said.
“HDPE is used in consumer and industrial packaging, while LLDPE is used for laminated films and general-purpose bags. Within the ASEAN, both raw materials are charged zero tariffs,” it added.
In September last year, the Tariff Commission began its investigation on the imposition of a safeguard duty after getting notification from the Trade department regarding JGSOC’s petition.
“JGSOC claimed in its filing of the safeguard measures petition, that the volume of HDPE and LLDPE — key raw materials used in many consumer products — being imported into the country in recent years were in quantities that are substantial to cause serious injury to the local petrochemical industry,” the company said.
Citing the Indian government as an example, JGSOC said India is expected to impose anti-dumping duties (ADD) on LDPE imports from Saudi Arabia, Singapore, Thailand and the US.
“The country’s Ministry of Commerce and Industry said the ADD to be levied are commensurate to the estimated damage incurred on sole domestic LDPE producer Reliance Industries, Ltd., between the years 2016-2017 and 2018-2019. The ADD was fixed between US$17.05 and US$216.76 per ton on various producers and suppliers from said countries,” the company said.
“Unchecked imports can disable the ability of local petrochemical producers from continuing operations, and corrode domestic self-sufficiency. If left uncorrected, the backlash will inevitably lead to unemployment and income loss for thousands of Filipinos who make their living directly and indirectly from the industry,” it added.
On Jan. 1 this year, JG Summit Petrochemical Corp. and JG Summit Olefins Corp. announced that they had merged into JGSOC. In a summary report released by the Tariff Commission on its website dated May 23, the commission said it recommends “no definitive general safeguard measure be imposed on the importations of the LLDPE pellets and granules subject to this investigation.”
“There was no increase in imports of LLDPE pellets and granules, both in absolute terms and relative to domestic production, during the period of investigation from 2015 to June 2021,” the commission’s report said.
“Since it has been established that LLDPE pellets and granules were not imported in increased quantities (whether absolute or relative to domestic production) during the period of investigation, the determination of serious injury or threat thereof, causation, and unforeseen developments has become moot and academic,” it added.
The Tariff Commission has yet to release its summary report for the petition of safeguard measures against HDPE pellets and granules imports. — Revin Mikhael D. Ochave