Cemex Philippines has made good its threat to shut the cement plant of its unit, Solid Cement Corp., in Antipolo, a move that will affect about 175 workers. Solid Cement was to shut down the plant last night, for a period "not exceeding six months." The company relayed the closure in a letter dated September 7 to Labor Secretary Patricia A. Sto. Tomas.
The letter cited "recent developments affecting the company," in particular the Department of Trade and Industry’s August 12 order banning the sale of Solid Cement’s Island Portland Cement for allegedly failing to meet government quality standards. "Rest assured that the company shall continue to observe applicable labor laws and regulations," said Maria Virginia Eala, Solid Cement vice- president for human resources.
The Trade department’s cease and desist order prohibited Solid Cement from "selling, distributing, delivering and disposing of Island Cement or any brand manufactured by the Solid Cement plant in Antipolo, Rizal to customers, dealers, and distributors, including batching plants and hardware stores."
Trade Undersecretary Adrian S. Cristobal, Jr. had said Island Cement failed several mechanical and chemical tests of the Bureau of Product Standards and the Department of Public Works and Highways’ Bureau of Research and Standards, particularly minimum comprehensive strength and insoluble residue and loss of ignition - indicators of the presence of "impurities."
Both parties agreed to a new round of tests that began last August 28. A special audit team was supposed to report after seven days or last September 4, but results have yet to be released by Trade officials.
Last week, Mr. Cristobal said the ban would be lifted if the tests showed Island Cement complied with legal standards. Cemex is estimated to be losing P9.75 million a day in revenues, given average sales of 3,000 tons or 75,000 40-kilogram bags of cement a day at P130 each. Since August 12, losses should have totaled P273 million. Cemex has placed its market share in Metro Manila at 40%.
Solid Cement earlier said its closure was averted by the Trade department’s decision to exclude its "Palitada King" brand of masonry cement from the ban. Solid Cement, however, sells only 500 tons of Palitada King daily, which was not enough to keep it afloat. The company has said the ban was exerting "heavy pressure" on inventory levels considering that the Antipolo plant did not stop production since the cease and desist order went in effect. With warehouses quickly filling up, Solid Cement only had room left for less than 10 days of production and "beyond that, no more," said Jaime Ruiz de Haro, Cemex Philippines president and CEO.