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Asahi Glass warns of massive losses without tariff protection

Post Time:Oct 13,2009Classify:Company NewsView:360

THE COUNTRY’S lone glass pane manufacturer has warned that it would post losses if the government refuses to renew safeguard duties on imports set to expire in December.

AGC Flat Glass Philippines, Inc., formerly Asahi Glass Philippines, will not be able to compete with the low landed cost of imported products as it has yet to complete a program designed to boost its competitiveness, the firm said in a position paper submitted prior to a public hearing next week.

"Terminating the safeguard measure at this time would be premature. It would result in petitioner incurring financial losses and fatally hinder its adjustment efforts to adjust to global competition," the firm stated in its Sept. 23 paper submitted to the Tariff Commission and made available to BusinessWorld.

"Terminating the safeguard measure would make the landed cost of imported products lower than petitioner’s cost to produce and sell. Confronted with this situation, [we] will be forced to adopt a policy of price parity with imported glass in order to protect [our] market share. This policy would result in financial losses and derail [our] adjustment plan," AGC Flat Glass Philippines said.

The government currently slaps a P3,583 duty per ton of clear float glass and a P4,526 duty on the tinted variant. The policy has been in effect for six years now and can be extended for four more years under the Safeguard Measure Act.

But importer Comglasco Aguila Glass Corp. said in a separate position paper that extending the safeguard measure for another four years would "further the monopoly of [the petitioner] ... and the consumer will be forced to purchase more expensive glass."

The glass maker cornered 80% of the clear float glass market and more than 50% of the tinted float glass market in the first half of 2008, data from the Tariff Commission showed.

Pointing to AGC Philippines’ admission that was still unable to compete with importers’ prices even after six years, Comglasco Aguila Glass argued that the law provides for the measure to be "terminated where the benefiting industry fails to show any improvement."

The commission will be holding public hearings to gather more data on the matter next week before submitting recommendations to the Trade department.

Source: www.bworldonline.comAuthor: shangyi

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