Shortfall in PH cement prod’n to last for 4 years
Shortfall in local cement production will continue in the next three to four years until such time that new capacities are added with the operation of expansion and new plants. In the meantime, imports from China and other ASEAN countries should boost robust demand.
Napoleon Co, president and owner of Cebu Oversea Hardware Co., Inc. (COHACO) – one of the top five cement importers in the country, said the local cement plants, which are largely owned by multinational firms, already ran out of capacities having reached 24 million tons of production since last year.
According to Co, the shortfall in local production will linger in the next three to four years as construction of new plants and expanded capacities of existing plants have long gestation period.
Eagle Cement, which is owned by businessman Ramon Ang, is expanding with additional 2-million metric ton capacity, but this may go for the requirement of Ang’s and San Miguel Corporation’s own infrastructure projects. Another cement plant in Cebu is going to add 3 million tons; while additional capacities from expansions of the Batangas and Mindanao cement plants will bring in more supply. Republic Cement is also adding 3 million-ton capacity.
Co further said that two other Chinese firms wanted to put up cement plants in the country but they were discouraged from pursuing because all the good quarry have already been taken by an expanding local manufacturer, who has the foresight and the intention to become the largest cement plant in the country eventually.
“Despite this shortfall in local capacity, there will be no shortage in supply because local cement plants and traders can import more and there is no shortage in global cement production unless the huge infrastructure projects of China’s ‘Silk Road’ initiative will also kick in,” he said.
According to Co, the country imported a total of 6 million metric tons (MMT) of cement last year with estimated cost of R25 billion based on an average price of $65 per ton.
Cement manufacturers and traders equally share the import volume. COHACO imported worth 400,000 tons worth R800