Economic Indicators Cement consumption, sales down last year

Economic Indicators Cement consumption, sales down last year
21 June 2004

Aggregate cement consumption edged down last year on the back of a slump in importation. Figures from the Cement Manufacturers’ Association of the Philippines (CeMAP) show cement consumption down 3.82 per cent to 302.99m 40kg bags in 2003, reversing the 7.57 per cent YoY uptick the previous year.

Consumption refers to the sum of local cement sales and cement imports.

Cement consumption in Luzon relatively remained unchanged compared to the year-ago level of 194.40m bags, equivalent to 7.78Mt. Total cement sales in Luzon, meanwhile, rose 3.98 per cent to 194.16m bags, up 3.9 per cent as the region accounted for all imports.

Manufacturers in Northern Luzon posted a 7.78 per cent dip in cement sales to 42.42m bags. Limay Grinding Mill Corp., which ceased production in September, sold its remaining 346,918 bags of cement in October and November. For the year, the company’s sales slid 54 per cent to 2.77m bags.

Sales of Metro Manila-based producers were 127.43m cement bags in 2003, up by 5.37 per cent than the prior year. Top gainers were Republic Cement Corp. and Continental Cement Corp., which posted sales growths of 16.63 per cent to 24.05m bags and 15.56 per cent to 15.13m bags, respectively. The Bulacan plant of Union Cement Corp. registered the highest sales of 36.12m bags.

Cebu-based cement producers recorded an 18.31 per cent sales drop to 46.34m bags. Both Apo Cement Corp. and Taiheiyo experienced lower sales while Lloyds-Richfield Industrial Corp. ceased operations in 2001 on account of low domestic demand.

Similarly, sales of cement manufacturers in Northern Mindanao slipped by about 5.71 per cent to 42.29m bags in 2003. The former Alsons Cement Corp. plant in Lugait, Misamis Oriental saw its sales shrink by 12.95 per cent to 21.78m cement bags. Holcim, the European cement conglomerate, now controls the firm under the Union Cement family.

Based on CeMAP records, it was only in August when member firms imported 242,500 bags of cement, down 97 per cent. Importation of cement of local cement manufacturers was almost nil since the Department of Trade and Industry (DTI) imposed an additional duty in June last year on top of the then 5-7 per cent import tariff on cement.

Local cement manufacturers had lobbied the Trade department, saying they are gradually losing to importers due to the lower-priced imports.

The additional duty was to be imposed for three years, enough time for Philippine cement manufacturers to prepare for eventual liberalisation. However, cement prices skyrocketed after the import levy was imposed, with each bag selling for as much as P125 to P137 in some provinces, from just P109 in January 2003.

Given the failure of local cement firms to keep cement prices steady, the DTI deemed it necessary to slash cement import tariffs.

Published under Cement News