Plant problems lead to cement price surge

Plant problems lead to cement price surge
Published: 03 June 2004

A 20 per cent drop in production by Union Cement Corp as well as the shutdown of Northern Cement Corp has caused a surge in cement prices in northern and central Luzon, the Department of Trade and Industry (DTI) said.

DTI assistant secretary Norman R Hocson cited defective kilns and a shortage in the supply of coal for cement prices of P170 per bag.

"Union Cement is undergoing repairs in some of its kilns, causing a 20 per cent drop in production. For the meantime, supply for all four regions is coming from their Bulacan Plant," Mr Hocson said.

Aside from Bulacan, Union Cement has a plant in Bacnotan, La Union, and bulk terminals in Subic, Zambales and Calaca, Batangas.

The official said DTI monitoring teams reported price surges in Regions I (Ilocos), II (Cagayan Valley), III (Central Luzon) and the Cordillera Autonomous Region or CAR. Mr Hocson added there is a "long queue" of cement delivery trucks in the area.

He likewise noted that the price of imported coal has tripled since last year. A report said China has cut coal export volumes, contributing to the global rise in prices to about US$44/t from only US$35/t in 2003.

Mr Hocson, however, said the shortage will "temporary."

"The DTI is coordinating with the cement industry in order stem the price increases as quickly as possible. In fact, a Union Cement official has coordinated with the DTI’s Region II office promising a P155 pick-up price per bag of cement," he said.

The DTI said some retailers have complied with government regulations and are still selling at P160 per bag.

Felix Enrico R Alfiler, president of the Cement Manufacturers Association of the Philippines, said producers have pledged to deliver to areas with shortages.