Asahi: No govt safeguards, no P500-M project

Japanese-owned Asahi Glass Philippines Inc., a unit of Tokyo-based Asahi Glass Co. Ltd., said it would likely shelve its P500-million expansion and modernization program if the company fails to get a favorable decision from the government concerning the unabated entry of cheap glass imports into the country.

Asahi Glass Philippines president Renato Ermita told reporters who visited the company’s manufacturing complex in Pasig City Tuesday that it would be difficult for the company to convince its mother company in Japan if the government rejects its petition against glass imports.

“We are asking for the safeguards at least three to four years. The furnace needs to be redesigned to improve and be more efficient. Without safeguards we cannot justify redesign,” Ermita said in an interview with reporters.

The company has a pending petition with the Department of Trade and Industry (DTI) seeking relief under Republic Act 8800 or the Safeguard Measures Act of 2000. Under the law, the DTI may impose a punitive tariff of as much as 50 percent for a period of 200 days in case of import surge. During the period, the Tariff Commission would then decide whether or not it will impose a definitive measure in the form of quota restrictions or higher tariffs.

The additional investments of between P350 million and P500 million would be used to redesign its existing furnaces, install of new auxiliary facilities, and buy additional equipment for processing.

The proposed project, according to him, would be implemented on a phase by phase basis starting next July with the furnace modification followed by the installation of auxiliary facilities and the processing equipment.

“Our glass furnace requires redesign and modifications to be more efficient and competitive. We need to do the actual repair next year. However, viability is questionable without the safeguards,” Ermita warned.

With the redesign, he pointed out that the company’s facility would become a mutli-product furnace.

It could also complement the proposed $320 million proposed wafer fabrication plant of Sun Power Philippines Manufacturing Ltd. - a unit of California-based Cypress Semiconductor Corp. Asahi Glass, the world’s largest producer of flat glass, has so far infused P3.8 billion in the Philippines but has decided to close its production line for tempered automotive glass in the country because of low capacity utilization and soft demand.

600450 Asahi: No govt safeguards, no P500-M project
Date: 23 July 2003

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