THE fear of some local galvanizers that the Indian-owned Global Steel Philippines Inc. (GSPI) will be given tariff protection will be happening in the coming days after the Cabinet-level Committee on Tariff and Related Matters (CTRM) confirmed that the company has complied with the government conditions to avail itself of it.

A ranking trade official said the Cabinet-level CTRM affirmed the recommendation of the technical CTRM committee that GSPI is already in commercial operation based on the requirements set by Executive Order (EO) 375.

With this, the source said the government would be raising the duty imposed on hot rolled coils (HRC) and cold rolled coils (CRC), the products being produced by GSPI, to 7 percent from the current 3 percent as a form of tariff protection.

The Neda Board, also composed mainly by the Cabinet-level CTRM, will now send a letter to the Bureau of Customs (BOC) to tell the agency to start imposing the higher tariff.

“The Neda Board letter to the BOC will say that this is the effective date for the increase in tariff to 7 percent,” the official said.

The technical group earlier informed the Cabinet-level CTRM that GSPI has achieved one of the hurdles set by EO 375, which is to reach a production output of 50 percent of the average yearly importation of HRC and CRC of the country over the last five years.

However, the Filipino Galvanizers Institute said the government erred when it considered only the production quantity since the quality of GSPI products is of equal importance to the downstream industry, which will probably be forced to source their raw materials from the Indian firm once the higher tariff is in place.

“Product quality issues must not be completely disregarded, as some members of the galvanizing industry have invested billions of pesos in modernizing their facilities and have since utilized imported CRC materials to serve the strict requirements for high-quality inputs of high-end market products such as prepainted roofing, automotive parts and bus bodies, window room air-condition covers, back panel and bodies of washing machines, internal parts of refrigerators and package-type air-conditioners, post-tension duct among others,” the group said.

FGI said it is a fact that Global Steel’s CRC has not met the quality requirements of the galvanizers, particularly those utilizing modern equipment with line speed of at least 50 meters per minute.

Among the quality problems encountered by galvanizers that sourced from GSPI, the group added, are flatness problems such as waviness and cambering; strip cleanliness due to oil smudges on the surface of the strip; poor thickness consistency; heavy carbonized edges/carbon rust resulting to uncoated portions both sides, top and bottom; cracked edges; heavy deposit of oil on the strip surface resulting its poor zinc adhesion and zinc peel-off; and inconsistent annealing of steel.

FGI said the billions of pesos in investments and the jobs of the 5,000 workers of the downstream steel industry would be put in peril if the government would push through with the increase in tariff.

THE fear of some local galvanizers that the Indian-owned Global Steel Philippines Inc. (GSPI) will be given tariff protection will be happening in the coming days after the Cabinet-level Committee on Tariff and Related Matters (CTRM) confirmed that the company has complied with the government conditions to avail itself of it.

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