Republic Cement boosts capacity by 25%

Published November 10, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Republic Cement, one of the country’s major cement producers, will boost capacity by 25 percent next year and help augment domestic supply as robust demand has paved the way for the entry of large volume of imported cement.

Nabil Francis, Republic Cement president, said that its current capacity is hovering around 7.5 million tons. “We will increase it by close to 25 percent by next year,” he said.

At present, Republic Cement has six cement manufacturing plants, four of which are located in Luzon and one each in Visayas and Mindanao.

Out of the six plants, Francis said they have revamped five. “The only one that will not change is the one in Visayas,” he said. He added that projects have been “capital intensive” requiring “quite significant amount” without divulging the total cost of the efficiency measures that started since 2008.

Republic Cement’s additional capacity would also boost local industry supply amid a growing demand. He said that the local cement market is around 33.5 million MT but the industry’s grinding capacity is higher than that.

“It means, technically, the local industry could supply the demand,” he said noting that domestic cement companies are investing to raise their capacities.

“It is the essence of this safeguard measure of this custom duty. The main philosophy behind this is that the local industry needs to continue to invest and to modernize the plant in order to be in the position to fulfill the domestic demands,” he explained.

The imposition of the ₱10 safeguard duty per 40-kilogram bag of imported cement is expected to discourage imports, which have carved a significant part of the market already.

“There is a change, but it is not huge change,” he said noting of impact of the safeguard measure. Majority of cement importation come from Vietnam, Thailand and China.

According to Francis, imported cement had accounted for 17 percent of total supply but could climb as high as 40 percent share in some provinces in Visayas and Mindanao.

With higher capacity next year, Francis said they would also augment their supply to the provinces.

“We believe that the future of the Philippines should be built by locally manufactured cement and that’s why we have invested in growing our capacity,” he said.

Some areas especially in the Visayas and Mindanao are more exposed to imported cement due to different reasons such as port infrastructure and geographic limitation.