Local cement companies shut down due to cheap imports

Several local cement companies have temporarily shut down their plants due to full stocks and the flood of imported cement.

According to the Philippine Cement Manufacturers Corp. (Philcemcor), the umbrella organization of local cement manufacturers, Davao Union Cement, FR Cement at Teresa, Rizal, Apo Cement in Cebu, Solid Cement in Antipolo, Continental Operating Corp. and Republic Cement at Norzagaray, Bulacan and Solid Cement have shut down in the face of full stocks.

Philcemcor complained that imported cement has already accounted for over 35 percent of the market, or 320,000 tons alone in July.

Korea, Philcemcor claims, has jumped into the fray starting in June this year as Asian neighbors look for vulnerable markets to dump their stocks. The region, Philcemcor said, is currently experiencing a 10-million ton glut.

Based on data gathered from the monitoring of the Philippine Ports Authority (PPA) and from private ports, cement imports recorded an average increase of five percent per month.

Philcemcor analysts, thus, estimate that it will take only 14 months before all local cement companies close down.

Philcemcor spokesperson and Union Cement senior executive vice president Francisco L. Viray Jr. wanted that "it is like a countdown to the end of the Philippine cement industry."

Local cement companies, the Philcemcor claims, now only control 65 percent of the market and most are being forced to temporarily shut down their plants if not altogether cease operations.

Local cement companies have been urging the government, through the Department of Trade and Industry to give them relief through the Safeguards Measures Act.

The DTI, however, is still weighing the arguments of both the local cement manufacturers and cement importers before taking any action.

Meanwhile Sen. Juan M. Flavier has filed a resolution directing the Senate Committee on Trade and Industry to inquire, in aid of legislation, into the reported emerging cartel within the cement industry.

In his resolution, Flavier observed that with the advent of the Asian financial crisis, a new group of players has emerged within the cement industry.

The new group of players, Flavier said, now controls approximately 92 percent of the local industry.

He pointed out that immediately after these new players consolidated ownership of local cement plants, cement prices skyrocketed 115 percent in 1999 from P46 per bag to P97 per bag.

Flavier further noted that while the new players are currently selling cement at P145 per bag locally, they are allegedly exporting the same cement at only P35 to P40 per bag.

Flavier said that the continued increase in the price of cement remains unabated despite the excess supply and over-capacity in the industry to the detriment of the Filipino consumer.

Flavier is referring to ownership of four big foreign cement firms of several local cement firms.

The four foreign cement manufacturers are La Farge, Blue Circle, Cemex and Holderbank.

The four have taken majority stake in several local cement companies after the industry nearly collapsed in 1997.