Plywood manufacturers in Philippines losing 25% of domestic market to cheaper imports from China; Philippine Wood Producers Assn. estimates value of undeclared imports in September at US$2.3M

Wendy Lisney

LOS ANGELES , November 30, 2011 (Industry Intelligence) – Plywood manufacturers in the Philippines say they have lost a quarter of their share of the domestic market to cheap, misdeclared and substandard imports from China, according to a report by Business World.

Speaking on Tuesday, the deputy executive director of the Philippine Wood Producers Assn. (PWPA), Maila Velasquez, said the country was facing an influx of Chinese plywood. The association said in a statement that, once the imports are released from Bureau of Customs premises, they flood and engulf an almost 25% share of the local market.

According to PWPA data, undeclared plywood imports for September alone were worth US$2.3 million. Velasquez said the PWPA was concerned that this might lead people to think that all Philippine plywood is low in quality, when in fact the problem is weak enforcement of standards.

The PWPA warned the imports were depriving the government of hundreds of millions in taxes and duties, as well as allowing Chinese manufacturers to compete unfairly and undercut prices of locally manufactured plywood.

Velasquez said volumes of smuggled plywood had surged after the total log ban Executive Order No. 23 was implemented in February. Before that date, she added, local producers had a capacity utilization rate of 85%-90%. Now, some have closed and others are at 50%-60% of capacity.

The plywood industry directly employs 30,000 workers in 30 plywood mills. Customs Commissioner Rozzano Biazon said he had alerted the Bureau of Customs to the situation and the need to give local industries a fighting chance against imported items.

The primary source of this article is Business World, Manila, the Philippines, on Nov. 29, 2011.

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