Philippine cement industry takes a hit

Philippine cement industry takes a hit
Published: 09 September 2009

Demand for cement in the Philippines slowed last year, indicating that the Philippine cement industry was not spared from the debilitating effects of the global financial crisis.

In an industry report released this month, the Cement Manufacturers’ Association of the Philippines (CEMAP) said demand for cement, as reflected by total consumption, grew by a mere 1.6% to 13.2Mt in 2008 compared to a robust 11.1% growth recorded the previous year.

The lower turnout was on account of a slump in public construction, while construction activities in the private sector slowed, CEMAP President Ernesto M. Ordoez said.

"The -0.4% growth in public construction and, similarly, the 8.2% hike in private construction in 2008 were lower than those of 2007. This slowdown in construction activity in 2008 explains the slide of demand for cement," Mr. Ordo$ez said in the industry report.

The gross value of public and private constructions grew by 29.2% and 13% in 2007, respectively, according to the CEMAP report.

"Such low demand showed that the industry’s capacity was under utilized," Mr. Ordo$ez said.

The industry official said the 13.2Mt in cement demand last year used only 57.4% of kiln capacity rated at 19.55Mta (dry-process).

If fully utilised, Mr. Ordonez said the industry’s kiln capacity could produce an equivalent of 23Mt of cement.

Growth in production and sales of cement slowed to 2.46% and 0.29% last year from the previous year’s 8.44% and 7.14%, respectively.

"The year 2009, marked by the global financial crisis, saw us at CEMAP rallying our local industries, as well as our ASEAN (Association of Southeast Asian Nations) and Asian counterparts, to guard against the deterioration of our markets caused by undervalued and substandard imports," Mr. Ordo$ez said.