DTI ready to sue cement producers

The Department of Trade and Industry (DTI) could take the cement industry players to court for profiteering as prices of cement have reached as much as P270 per 40-kilogram bag from only P205 before December last year. According to DTI undersecretary Zenaida C. Maglaya, there is planned price control on the commodity. In this planned court case, the DTI would be acting as complainant on behalf of the consumers. Should the DTI make its threat good, this would be the first time that it would press charges versus the cement industry in court. In the past, the DTI had been resorting to administrative cases to act on consumer complaints. The first time was when it filed a case against the Manila Electric Co. on power rates before the Energy Regulatory Board. Maglaya explained that bringing these cement firms to court would be necessary to force the cement industry to submit production, deliveries and cost documents but would also subject them to a long and slow battle in court. “They can be subpoenaed,” she said. Profiteering carries a fine of P1 million while hoarding, P2 million plus imprisonment. Maglaya pointed out that cement manufacturers have not been transparent, and would not heed DTI’s requests for documents citing confidentiality while being probed administratively. The DTI gave them until Thursday to submit to the DTI the list of their accredited dealers, their inventory levels, deliveries and costs. [PNA] “If they do not comply, we will go to court,” Maglaya said. For the retailers/dealers who had been served notices of violation and notices of no supply, Maglaya said non-appearance on Friday’s meeting would also mean slapping of formal charges against these entities. Maglaya surmised that some players in the industry are holding on to supply in anticipation of a possible price increase by cement manufacturers. Of the three global cement giants, only Lafarge and Holcim have advised DTI of their increases. Lafarge implemented a P3 price adjustment last Dec. 16 while Holcim imposed between 3-5 percent price adjustment effective January 5 this year. “They have to justify first why they are increasing their prices. This has nothing to do with unusually high demand because the industry said it has enough supply. The plants’ capacity is underutilized,” Maglaya said. Maglaya also said the DTI is in favor of opening importation of cement, but it has to check on the landed cost first. Cement prices shot up to as high as P270 per bag middle of last December as supplies had been tight. The supply problem was blamed on a surge in the demand for repairs and early construction season that coincided with maintenance shutdowns in some Bulacan plants and a breakdown of deliveries from a Batangas factory due to a destroyed bridge.