Vietnam To Probe Flood Of Float Glass Import

Date: 7 July 2009
Source: Vietnamnet.vn
VietNamNet Bridge - The Ministry of Industry and Trade has decided to launch an investigation into float glass imports, which three local manufacturers say are rapidly increasing and hurting their business.

Float glass is a type of glass typically used in windows, and is made by floating molten glass on a bed of molten tin. The probe, the first of its kind after Vietnam joined the World Trade Organization in 2007, is set to inspect imports from throughout Asia, Europe, the US and Australia. The petitioners – Viglacera Float Glass Company, Vietnam Float Glass Company and Vietnam Float Glass Industry, which account for all domestic production – proposed that the government impose an absolute duty rate of US$0.60 per square meter on all types of imported float glass for a period of four years. They also sought an immediate temporary measure to raise import tariffs to 40 percent on imports from other Southeast Asian nations for 200 days, according to their request sent to the government.The current tariff is 5 percent. The ministry is considering the measures and has agreed to begin inspections soon.
 
Imports of float glass from outside Southeast Asia currently pay duties of 40 percent or 60 percent depending on the trade agreement with the importing country.
 
Nguyen Anh Tuan, general director of the Construction Glass and Ceramic Corporation, which holds stakes in Viglacera Float Glass Company, said float glass imports sharply increased in recent years, causing difficulties for local producers.
 
Tuan, who also signed the application, said 13 million square meters of two-millimeter-thick equivalent float glass were imported into Vietnam in 2007, 25 million square meters last year and 7 million square meters in the first quarter this year.
 
Big losses
 
Tuan said the booming imports, not to mention a large volume of smuggled float glass, have forced local producers to halve production. Inventory in stock across the country accounts for 30 percent of annual production capacity.
 
Local products are unable to compete as the imports are priced 12- 34 percent cheaper, according to the companies’ official complaints.
 
Local producers have had to break a large amount of finished products and feed them back into the furnace to lower inventory. But the move has raised production costs.
 
Viglacera Float Glass Company, a joint venture between the Japanese NSG Group and Toyota Tsusho Corporation and Vietnam Glass and Ceramics for Construction Corporation, said it had to cancel a $15 million plan to increase its capacity from 350 tons to 400 tons per day as imported glass was pushing supply past domestic demand.
 
Domestic production was 48-51 million square meters in 2005 and 2007 but decreased to 44 million square meters last year, according to the three local producers.
 
They said their sales from the domestic market were reduced to 18.22 percent in 2008 from 36.08 percent in 2007 while the companies have had to let go 6.36 and 10.6 percent of their staff in 2007 and 2008 respectively. 

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