Plant expansion of cement companies opens up opportunity for exports

Published March 13, 2018, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

The country’s cement producers are pouring in additional investments to expand their capacity with demand expected to further grow this year until 2020, opening an opportunity for exports in the future.

A press statement cited of several industry players announcing plans to boost capacity on the back of the Duterte administration’s infrastructure program. These are CEMEX Philippines Group of Companies, Eagle Cement, Northern Cement Corp., Pacific Cement Corp., San Miguel Corp. and Taiheiyo Cement Philippines.

The latest cement investment is the P12 billion cement manufacturing plant expansion of San Miguel Corp. in Pagbilao, Quezon. The new plant has production capacity of 2 million tons and is expected to start commercial operation in May 2021.

If supply exceeds capacity, there could even be an opportunity to export the additional supply, industry players said, the statement noted. New players are likewise laying the groundwork for their respective investments.

Phinma for instance, registered its cement company in September 2017, aiming to produce approximately three million metric tons (MT) of cement per year.  In one of its disclosures, the company bared plans to  “engage in processing, marketing, importing, trading, selling, and distributing cement, cement products, and other by-products.”

Recently, Phinma imported 50,000 MT of cement or approximately two million sacks of cement from Vietnam.

It plans to import the same amount per quarter for a total of 200,000 MT a year.

Phinma is headed by Eduardo Sahagun, a retired officer of Holcim Philippines, Inc. who joined Phinma less than a year after retiring.

Another new player, Big Boss Cement Inc. which is headed by Henry “Big Boy” Sy, Jr., also joined the growing number of domestic cement players.

Big Boss is positioning itself as the “most environment-friendly cement in the world today.”  It will use lahar materials as main component of their brand. Small players are also importing more cement in an effort to meet the growing cement demand.

Although the Philippines still has the lowest per-capita cement consumption compared to its regional counterparts, demand has grown from 12 MT in 2000 to 24.4 million MT in 2015.

Moreover, cement demand and consumption in the country is expected to grow with the Philippine economy, which grew at a compounded rate of 5.1 percent.

Indeed, cement and steel industries are at the forefront of the so-called Golden Age of Infrastructure in the country, with the Duterte administration rolling out more than P3.6 trillion for its Build, Build, Build program from 2018 to 2020.

Cement sales have been increasing since 2014 when the industry capacity was still at 5.2 million tons, according to data from Cement Manufacturers Association of the Philippines (CeMAP).