Philippines’ sole newsprint manufacturer halts operations

By Jenina P. Ibañez, Reporter

THE COUNTRY’S sole newsprint manufacturer is looking to restart operations in the second half after it stopped production last year.

Trust International Paper Corp. (TIPCO) had let go of 258 direct employees in June 2020 when it stopped manufacturing operations due to pandemic-related constraints, TIPCO Chief Operating Officer Edgar Pataroque told the Tariff Commission at a public hearing on Tuesday.

Mr. Pataroque said the pandemic halted the industry’s recovery from the effects of import competition.

“The economic effect of this pandemic caused market demand to (become) severely depressed. Based on market experts’ projections, there will be very little market demand for the company’s products in the foreseeable future,” he said.

“Continued operations will no longer be viable. TIPCO made a very difficult decision of shutting down and closing all manufacturing operations.”

The government imposed safeguard duties on imports of newsprint from other countries after it found that increased imports had likely caused serious injury to the domestic sector.

The Safeguard Measures Act, or Republic Act No. 8800, allows domestic producers to ask the government to conduct an investigation into import competitors if they claim to have been injured by excessive imports.

The Trade department imposed a safeguard duty of P980 per metric ton of imported newsprint in 2015, lower than the Tariff Commission’s recommended P2,470 to protect downstream industries like local textbook companies. The duties were reduced to P800 and P640 in each of the succeeding two years.

TIPCO ran machinery upgrade and logistics improvement projects worth P231.1 million as part of its commitment to the government to adjust to import competition, but fell short of a P156-million pulper upgrade project.

Mr. Pataroque said the company delayed implementing this project because of the lower import duty. If the government had used the recommended duties, it could have generated around P150 million in funds, according to the company’s computations.

“The death of the industry could have been delayed or prevented if other government agencies upheld the advice of this honorable commission.”

Jovie Rivera, the legal counsel to the petitioner, said that the industry was not able to access the Trade Remedies Fund, which could have helped the company compete. The Safeguard Measures Act earmarks part of funds generated from duties to assist industries affected by increased imports in improving competitiveness.

The company still legally exists, Mr. Pataroque said, although operations have been shut down.

“We want to be flexible, so right now we’re looking at renting out our warehouse and even renting out some of our facilities to other interested parties. But we’re still exploring,” he said.

“Hopefully if the market improves towards the second half of 2021 or even early part of 2022 — if the market improves or if there’s opportunity for us to get back into the game, we would definitely want to go back and manufacture.”

Demand for newsprint is still down, he said, but added that TIPCO is looking for potential opportunities from the shut down of other paper mills.

Although smaller than anticipated, Mr. Pataroque said the previous duties caused foreign mills to defer exporting products to the Philippines.

“It did not totally stop. There was lesser export from the foreign mills to the country,” he said, adding that weak demand for newsprint in other countries could compel foreign mills to send excess products to the Philippines.

Olivia T. Marasigan from the Trade department’s Bureau of Import Services asked TIPCO to submit a formal query on the trade remedies fund so the government can address the concern.

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