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DTI to investigate surge in ceramic floor, wall tiles imports

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THE Department of Trade and Industry (DTI) will conduct a preliminary investigation on the surge in imports of ceramic floor and wall tiles after domestic manufacturers said these excessive shipments are hurting the local market.

In a notice published in a newspaper on Dec. 28, DTI said it found a clear case that warrants the preliminary investigation into the imports of such products following an application from the Philippine ceramic floor and wall tiles industry for the initiation of safeguard measures.

DTI said the its evaluation of the evidence from the industry showed that the cost of imports alone was cheaper compared to selling price of local products. Weighted average landed cost of imports from major sources (China, Indonesia, and Vietnam) in 2017, or the average total expenditure for buying and shipping a product which includes costs like customs duties, currency conversion, insurance, etc., was lower by 3.27% than the average selling of domestic products, which can drive local competitors out of the market, and further prevent the entry of new ones.

In 2015, a price depression, the point when local producers decrease their selling price to compete with importers, as accounted at 5.56%. From then, local producers have not increased their prices.

The department noted in the notice that the “significant increase in the volume of imported ceramic floor and wall tiles preceded the serious injury to the industry from 2015 to 2017.”

For the period of 2013 to 2017, market share of domestic producers declined to 14% in 2017 from 96% in 2013. Bulk of the imports in 2017 came from China (85.25%) from only 3.76% in 2013, followed by Indonesia (6.84%), and Vietnam (3.2%), which was the top importer in 2013 accounting for 48.22%. Earnings before interest and taxes also declined by 203% in 2015 from 71% in 2013. On the other hand, percentage of imported cement significantly grew from 4% in 2013 to 88% in 2016.




All in all, the import trend for ceramic floor and wall tiles increased from 2013 to 2016, DTI found. Imports for 2017 were lower by 13% compared to the previous year, but were higher by 2,192% in 2014, which is the pre-surge level. Share of imports to domestic production reached 696% in 2016 from merely 4% in 2013. Although the 2017 share was lower by 96%, or was at 600%, this was higher by 572% in 2014.

The department also noted that these conditions show the market share of local products was displaced during the period as imports increased.

With this, DTI is encouraging interested parties to submit their comments and position on the matter. Submissions may be made to the Bureau of Import Services, or in the office of DTI in Makati City within five days from date of publication of the notice. — VMPG