The Philippine cement industry became slightly weaker in 2006, with sales declining by nearly 2%, the Cement Manufacturers Association of the Philippines said.
Cement sales reached 11.48Mt in 2006, down by 1.7% from 11.67Mt in 2005.
Despite weaker consumption in 2006, the industry is optimistic in 2007, saying the sector is poised for growth.
Industry data showed that the sales in Luzon and Mindanao decreased by 2.3% and 1.6%, respectively. Cement manufacturers were able to sell 7.5Mt in Luzon, down from 7.69 million MT in the previous year. Mindanao also suffered a setback, with cement consumption at 2.28Mt in 2006, from the 2.32Mt in 2005.
Visayas experienced a small growth, at 1.4%, but not enough to compensate for the negative performance in Luzon and Mindanao. A total of 11.67Mt were sold in the region, up from 1.65Mt in 2005, data showed.
The slowdown in the construction sector led to cement manufacturers’ poor sales, said Ernesto Ordonez, cement association president. "Construction growth generally [leads to an] increase in cement sales... If there is a growth in construction, there should be growth in cement sales and this has not happened in the past two years," Mr. Ordonez said.
Data from the National Statistical Coordination Board showed that the construction has been on a steady downturn in the last five years. Construction dipped by 2.1% in the first semester of 2006.
With the government keen on initiating major infrastructure projects in the next few years, the group expects the construction sector to pick up starting 2008.
Mr. Ordonez said 2007 could be a better year, with growth ranging from 2% to 5%, as long as there is 6% growth in the construction sector. "It is an election year and if what the government is saying is true about infrastructure and construction, then its possible," he said. If construction fails to pick up this year, "we’ll be in trouble," he added.
Based on 2005 figures, there are 18 cement plants operating in the Philippines. Last year, two new entrants in Bulacan and Cebu registered with the Board of Investments, promising to increase the industry’s capacity.