Philippine association: ‘No cement shortage’

Philippine association: ‘No cement shortage’
Published: 10 December 2009

There is no cement shortage in the country even if demand for the item continues to pick up, the local cement industry assured the public on Thursday.

Ernesto Ordoñez, Cement Manufacturers Association of the Philippines president, said the surge in demand had made it appear like there is tight supply for cement. But there is no reason to be worried, he pointed out.

“The line is longer for trucks [at cement plants] because the demand is higher now than last year. Another thing is that there are defects in the mill of one of the plants, so that affected production," Ordoñez said in a telephone interview.

He added that cement buyers usually get their supply from the more popular brands and choose to stick with regular suppliers, creating an artificial shortage.

“This is a peak for construction time, but supply is enough," Ordoñez said.

He declined to say if cement-makers might have to hike prices due to increasing demand. “It’s something that each of the companies would have to determine," he said.

The National Statistics Office has reported that building permit applications went up by half to 37,266 in the second quarter, driven by a 69% growth in residential building construction to 31,184. Construction of nonresidential buildings also slightly picked up by 3.1% to 2,792.

But the combined approved building permits for additions, alterations and repairs dropped by almost a fifth to 3,290.

For the first half, approved building permits rose by more than a third to 64,548. Last year, 96,295 applications for building permits were approved, about a quarter of which was posted in the last quarter.

Earlier, listed cement-maker Holcim Philippines, Inc. said it might hike prices as a result of higher coal, oil and electricity costs, which make up 60 per cent of the company’s costs. Holcim corners a third of the local cement market.