Flat glass maker defers P5-B investment on import threat

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By Janina C. Lim, Reporter

TQMP Glass Manufacturing Corp., the country’s lone flat glass maker, is deferring a P5-billion expansion plan due to the lack of standardization rules and monitoring of imported goods that are increasingly flooding and hurting the domestic market.

“Were planning to put up a new furnace [but] with dissipation nag-aalinlangan rin kami (we’re still hesitating),” Paul Vincent C. Go, president of the Valenzuela City-based TQMP, told reporters in a media briefing last Friday in Pasay City.

The planned investment is bigger than the P3.5-billion it spent in putting up its current facilities. The proposed facility will hire 1,000 direct employees and generate 1,000 to 2,000 indirect employment.

TQMP manufactures flat glass through its recently acquired subsidiary Pioneer Float Glass Manufacturing Inc., which is formerly AGC Asahi Glass and owned by Japan-based AGC Asahi Glass Ltd., a world leader in producing glass, chemicals and high-tech materials. The acquisition closed early this year.

Asked why the firm failed to factor in the problem during due diligence, Mr. Go said the external factor, stemming from the government’s side, was difficult to detect.

TQMP blamed the government’s move in 2015 to exempt flat glass, among other products, from securing certification from the Bureau of Product Standards (BPS). Flat glass is commonly used for windows and doors in houses, buildings and automotive.

Administrative Order No. 15-01 Series of 2015 of the Department of Trade and Industry, to which the BPS is attached, said the move was meant “to fast-track the processing” of applications for import commodity clearances, which saw “significant increases” during that time.

As of April 2018, the BPS deemed 85 products as life-threatening and, hence, are enlisted for mandatory certification.

Shipments of products covered in the list are inspected by the Bureau of Customs, which obtains samples from import shipments for testing and certification.

Those not in the list are allowed to self-declare their labeling, which may be subject to BPS validation.

Citing internal reports, Mr. Go said the 2015 rule allowed the misdeclaration of shipments and barred the local manufacturer from obtaining precise data on the movement of supply in the flat glass market.

“Some are declaring as table wares, some as furniture. Puro technical ginagawa nila kaya nahihirapan din tayo (They’re doing technical barriers and we are having difficulty),” Mr. Go said.

Nonito B. Galpa, executive vice-president of Pioneer Float Glass Manufacturing, Inc. said generic importers label the thickness of their flat glass products below the industry’s nominal thickness standard, making them susceptible to easy breakage and a threat to the safety of users.

Hindi kami naniniwala na hindi ito life-threatening (We don’t believe that these are not life-threatening),” Mr. Galpa said.

“They’re declaring a thickness [that is] not within the Philippine standard,” he said, describing the practice as scary because it leaves consumers without protection of the strength of the glass.

Mr. Galpa, also the vice-president of the Flat Glass Alliance of the Philippines, Inc., said imports surged after the new rule.

TQMP said the market share of local produce declined to about 40-50% from the 80% it used to enjoy before the imposition of DAO 2015. The firm currently produces 15,000 tons of flat glass a month.

Mr. Go said expansion plans were meant to fill in the country’s increasing demand for flat glass, currently pegged at 26,000 tons a month. The addition of the planned facility is expected to nearly triple the plant’s capacity at 42,000 tons a month.

However, the company official said the group has also been exporting, seeing that cheap imports are increasingly dominating to satiate local demand. TMPQ faces standard-regulating barriers, making it a challenge to penetrate foreign markets.

Of its current output, about 30-40% are allocated for export destinations such as Korea, Nigeria and Malaysia.

The company has sought an audience with the Department of Trade and Industry, which has turned over the industry’s concern to the BPS to hold another review.

“We’re not against the importation,” Mr. Galpa said, adding that the imported goods should be at par with locally made flat glass.