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Sunday, April 21, 2024

For all its bad rap, ‘cracker sector gains to people cited

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THE latest New Year’s Eve revelry has once more drawn fresh calls for banning fireworks and firecrackers altogether, but industry players assert  this is a misguided move.

While it is highly regulated, the fireworks and firecracker industry also touts its “trickle-down” effect benefiting small merchants.

The firecracker and fireworks industry contributes to the economy since its business model is not discriminatory as to who can sell these products. Although fireworks and firecrackers are seasonal, the president of one of the country’s fireworks associations said small merchants usually gain from the network they are able to establish because of selling these products.

Drawing the line between fireworks and firecrackers in terms of definition, firecrackers are small explosive devices designed to make loud noise while fireworks are explosive pyrotechnic devices that make a display of lights and noise.

“‘Yung trickle-down effect ng industry namin napakalaki. Minsan, tatanungin ako gaano karami ba talaga ang nasa industriya nyo?

Tinatanong ko pabalik sa kanila, may kilala ka bang kamag anak o kaibigan na nagtitinda ng paputok? Halos lahat sila sasabihin sakin mayroon [The trickle down effect of our industry is huge. Sometimes I’m asked, how many are really in your industry? And I ask them back, do you have a relative or friend who sells firecrackers? And most of them  say they have],” Joven Ong, President of Philippine Fireworks Association (PFA) and CEO of Dragon Fireworks told the BusinessMirror in a recent phone interview just before the New Year.

Ong also noted the compounded effect of engaging in firecracker and fireworks businesses. He underscored the importance of establishing connections with customers.

“Ang maganda kasi sa paputok at pailaw, kunwari ikaw naisipan mo magtinda next year, kung nakabenta ka kasi, taon taon tatawagan ka nung binentahan mo, kunwari meron ka na base, kunwari nakabenta ka ng 20,000 sabihin natin kumita ka ng isa o dalawang libo. Malaking bagay sa mga tao yun. Next year yung binentahan mo ng 20,000 tumatawag na sayo. Now you grow your sales into 50,000 or maybe 100,000 lahat sila taon-taon tumatawag na sayo,” Ong said.

[What’s good about this business is that, if for example you thought of selling firecrackers and fireworks this year, every year the ones you sold to will regularly call you. For instance, if you sold P20,000 worth of the stuff, and you earn one or two thousand pesos, that’s a big deal for many. Next year, the ones you sold the 20,000 to will start calling you. Now you grow your sales into 50,000 or maybe 100,000, all of them will call you year after year].”

With this, Ong expressed hope that the government will realize the economic benefits the industry provides to a lot of people to the extent that the size of the industry is not quantifiable—may it be those who rely on the industry for extra income or those who plan to become dealers or part of the fireworks and firecrackers industry.

“Eto ang industriya na masasabi ko marami natutulungan taon taon kaya lagi ko pinapakiusapan ang gobyerno na maawa sila dahil yung trickle down effect nito sa economy sa mga tao, malaki maraming natutulungan. Pag tinanong ako ilan ba? Basta mahina ang 300,000, mga 500,000 baka meron pa,” Ong stressed.

[This is one industry that helps so many every year, that’s why I always ask government to have pity because the trickle-down effect benefits so many. When I’m asked, ‘how many really [are helped]?’ I know that 300,000 is a modest estimate, it could even be 500,000].

Supply chain woes

Meanwhile, Ong stressed that just like any other industry, the “wheel of industry” was disrupted by the Covid-19 pandemic. He illustrated the supply chain problem that slowed down the production of the fireworks industry.

He said, partly in Filipino, that the “shortage this year was [so huge]” because of the pandemic.  “I see that most manufacturers, [the same thing happened to them]…We were ordering  chemicals supposedly late last year para magamit namin January pa lang [so we can start using them starting January].”

However, he added, “the deliveries came in March, April so one-fourth [of our] production was cut,” Ong said.

He stressed that the industry’s capability to produce was cut down by a quarter. In fact, he noted, that the industry is trying hard to keep up with production but it’s no longer feasible.

He explained that during the pandemic, other countries had lockdowns and factories laid off workers because demand was drastically cut.  Then, when they decided to start ordering again, such orders were coming simultaneously from all over the world, and factories were hard-pressed to call back workers. “So ‘yung chemicals at finished products ng buong mundo medyo naantala [the chemicals and finished products for the entire world were stalled],” Ong said.

Ong said 2022 “was really stressful.” He said the industry may be willing to produce but it cannot cater to the demands of consumers because of the supply chain issues.

The PFA president stressed that as manufacturers of fireworks, they are affected by the pent-up demand coming alongside supply chain disruption brought by the pandemic.

That’s why, Ong said, “I keep telling the government if you support this industry, you’ll be able to generate plenty of jobs just in the manufacturing alone of the fireworks…if this industry becomes an export-oriented industry in the future.”

In fact, he illustrated the case of one small town in China, which he said used to directly employ 500,000 people for the manufacturing of fireworks. He said the Philippines should likewise be encouraging industries that are labor-intensive just so the country can generate jobs.

‘Highly-regulated industry’

Deemed as a highly regulated industry, the firecracker businesses are bearing the brunt of stringent rules. In contrast, Ong said fireworks or pyrotechnic manufacturers are actually “doing well” this time because a firework is a value-added product.

Republic Act (RA) No. 7183 which was passed in 1992, listed the types of firecrackers and pyrotechnic devices allowed in the country. The said law also noted regulations to control their manufacture, sale, distribution and use.

As the president of PFA, Ong said that while they are the “most regulated industry” in the world, not only in the Philippines, it’s only right to regulate their products because fireworks contain exclusive ingredients.

However, he said the government should zero in on actively campaigning for pyrotechnics instead of “banning everything,” so long as the fireworks bear the Philippine Standard (PS) mark.

Last week, the Department of Trade and Industry (DTI) released a list of DTI-certified brands of fireworks. According to the Trade department, the list contains only PS-Licensed companies as RA 7183 prohibits the importation of finished firecrackers and fireworks.

The brands included in DTI’s list are: Dragon Fireworks, Diamond, LF Fireworks, Pegasus, Phoenix, Double L, Nation, LLF Andy’s Fireworks, Pyro Kreations, Yangco Fireworks, Star Light, A. Santiago Fireworks, and 4SURE Fireworks.

“As president of PFA, we’ve always batted for the PS mark. Kasi hindi pwede kahit sino magtinda lang, mamaya palpak ‘yung ginagawa niya binenta niya, ‘yung taong bumili nasaktan. Ang sinasabi namin sa consumers, wag ka na bumili kung walang PS mark ‘yan [We can’t have just anybody selling; they might sell substandard ones and the buyer gets hurt. We always advise consumers not to buy without the PS mark],” Ong said.

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