DTI probing high cement prices

DTI probing high cement prices
23 March 2005

The Philippine Department of Trade and Industry has launched an investigation to determine whether the continuous increase in the prices of cement is justified. The move followed calls by Senator Manuel Roxas II last week for DTI to explain the rising cost of cement and the possibility of removing safeguards on imported cement.   Roxas asked DTI to review the current cement safeguard of P15.60 per 40kg bag of imported cement in the wake of the 20 per cent rise in local cement prices.  

The DTI price monitoring report for the second week of the month showed that nationwide average of cement was at P157 per 40kg bag from P130 per bag a year ago.   The local cement industry, led by Cement Manufacturers Association of the Phils, has filed a petition to extend the safeguard measures until 2008. CeMAP stressed that cement dumping still exists and that there is need to maintain the safeguards.  

Newly installed Trade and Industry Secretary Juan Santos said consumer welfare remains a paramount concern of the DTI in making its decision on the cement safeguards.   "The promotion of the competitiveness of the domestic industries and producers goes hand in hand with ensuring that consumers get value for their money," Santos said.   However, DTI will take note of the information submitted by the cement industry relative to their petition for safeguard extension.  

Data provided by the cement industry to the DTI revealed that energy costs account for 80 percent of the variable cost to produce cement and therefore increases in prices of coal, fuel and electricity impacts on the overall production cost.  These increases are eventually passed on to consumers by way of higher prices, DTI said.  

The imposition of the P15.60 levy per bag of imported cement ended last December but according to the DTI, no one has imported cement.  CeMAP president Felix Enrico Alfiler warned that the entry of cement imports would hurt the manufacturers and consequently consumers.   "Only dealers and middle men benefit from importation," Alfiler said.  CeMAP said safeguard measures were necessary to protect cement workers and their families, as well as employees in allied industries.  

Meanwhile, Santos said the DTI is still awaiting the decision of both the Supreme Court pertaining to the case filed by the Japanese importer Southern Cement Cross Corp. and the Tariff Commission pertaining to the extension of the imposition of safeguard duties on imported cement.  Santos attributed the price increase since January to the increase in the cost of transportation resulting from the series of fuel increases affected since the start of the year.  He added that the DTI would closely coordinate with its regional and provincial offices nationwide in monitoring the trends in cement prices to appropriately respond to any unusual price increases.  

Meanwhile, Cemex retail marketing head for Cebu Jose Tan said the company has decided to relaunch the masonry cement known as the Cemex "Palitada King." A bag of masonry cement covers 43 square feet while portland cement only covers 33 square feet.   Tan said a study conducted showed that about 51 percent of a housing unit is composed of masonry cement while 34 per cent and 15 per cent are portland cement used for structure and foundation. Masonry cement is P3 to P5 per bag cheaper than portland cement.

Published under Cement News