PHILIPPINES - Cement sales seen at new high this year

Byjirong

Updated Wed, 16 Mar 2016 15:58:49 GMT

Construction activities across the country can proceed without much delays this year as fears for any shortage of cement are being ruled out amid local demand seen reaching a new high.

Republic Cement and Building Materials Inc. president Renato Sunico told The STAR robust cement sales are expected to continue this year, with the industry seen growing another 14 percent on the back of election-related construction expenditure and government spending on public works.

“We in the industry feel that the growth will continue specially being an election year. When we look at the pattern in the demand over the years, every time there is an election year, there is a pickup in demand. This time, it’s not only because of the election year but the government is really pushing for a higher budget for infrastructure,” Sunico said.

“Everytime when there is election, whether its national or local, there’s a lot of construction activity sponsored by candidates, whether it’s a basketball court or a new road. We already started feeling it last year and it is expected to continue this year. So I think this year will be another good year for the industry. I feel it (growth) should be same as last year or even better,” he added.

Cement sales last year rose 14.3 percent to 24.36 million tons from 21.3 million tons recorded the previous year, according to the Cement Manufacturers Association of the Philippines (CeMAP).

CeMAP attributed the jump to the government’s higher budget for infrastructure aimed at addressing gaps and supporting economic growth.

Contributing further to the growth was a generally better weather with less rain and new housing projects with low interest rates, the group said.

With a growth of at least 14 percent this year, cement sales could reach more than 27 million tons by yearend.

“Our concern now is how to meet the demand. There are some pocket shortages you cannot avoid but the industry is quick to send supplies. Recently, I understand there are some shortages in Baguio. These are temporary shortages on various reasons. Maybe cement plants supplying that area may have a temporary shutdown so they cannot supply. We really want to avoid these pocket shortages because it hampers the growth in those areas,” Sunico said.

With the expected continued boom in cement demand this year, Sunico assured the local industry is capable of meeting the government and private sector’s demand.

“This year we can still supply. On future years, it depends on how soon all the additional capacities will come in. But in fairness, all the other players are also putting up their own expansion plants,” he said.

“So you’re talking about 24 million tons of demand in 2015. If you’re talking of a 10 percent increase, that’s another two million tons. So there should be that equivalent capacity getting into the industry,” Sunico added.

For its part, Republic Cement is inaugurating tomorrow the P892-million expansion of its Norzagaray plant in Bulacan which will add 850,000 tons a year of capacity and also enhance the company’s sustainable manufacturing processes through its energy efficiency features.

Republic Cement, formerly Lafarge Republic Inc., is owned by a joint venture of Aboitiz Equity Ventures and Ireland-headquartered CRH International.

According to Sunico, the country’s booming cement industry first broke past the 20-million ton sales barrier in 2014 and continued with its growth last year.

However, he said the Philippines still has a lot of catching up to do with the other countries in the region in terms of cement sales.

“Vietnam has overtaken us. Other ASEAN countries are already in the 30 million tons mark. We are still catching up but we’re going there,” Sunico said.