Government plan to import cement bucked, Philippines

Government plan to import cement bucked, Philippines
15 December 2008

A public administration expert and political analyst at the University of the Philippines cast doubt yesterday on the sustainability of a government plan to import Japanese cement, then sell it in the Philippines at an extremely low price.

"To be candid about it, I personally believe this could not be done on a long-term basis because selling your goods at a loss is no way to run your business," Dr. Prospero de Vera said.

De Vera was reacting to news reports quoting Trade Undersecretary Elmer Hernandez as saying the government would buy cement from Japan through the Philippine International Trading Corp. (PITC), and then sell it in the domestic market at P145 to P150 per 40-kilo bag.

He cited an official report by the Japan Cement Association in the Asia Cement Forum last Oct. 16 in Nanjing, China saying the equivalent of a 40-kg. bag of cement is sold at P303 in Japan. This is more than double the price at which the government intends to sell the same cement here.

De Vera said that taking into account the freight cost from Japan to Manila, as well as unloading cost, which amount to P40 per bag, this means that the cement will be bought in Japan at P105 a bag, only 1/3 of the retail price there. This does not even include increased transportation and marketing costs.
Published under Cement News