2 cement firms agree to hold off price increases until June

Two cement firms have agreed to hold off any price increase until June, the Department of Trade and Industry (DTI) disclosed yesterday.

In a press conference, DTI Undersecretary for Consumer Welfare Zenaida Cuison-Maglaya said two of the three major players in the cement industry, Holcim and LaFarge, have already committed to not increase their prices until after summer.

The remaining firm, Cemex, has yet to make a similar commitment. However, Maglaya said Cemex will likely follow the example of the other two after DTI has spoken to the company.

At the two-day Philippine Development Forum (PDF) held at Cebu last week, World Bank (WB) country director Joachim Von Amsberg said the price of cement in the country is too high.

DTI Secretary Peter B. Favila said Von Amsberg suggested opening up the industry in order to make the prices more competitive because the cement industry is dominated by three major players — Holcim, LaFarge and Cemex. Combined, the three firms account for 90 percent of installed clinker capacity, while four independent producers account for the remaining 10 percent.

The multilateral agency noted that cement prices in the Philippines are among the highest in Asia. As of last year, cement per ton was pegged $72 compared with $35 in China, $50 in Thailand and $65 in Vietnam.

The WB said the government should allow more imports to have price increases and fast track required clearances for setting up a cement manufacturing plant. "Given the strategic importance of cement, it could be important to put in place a permanent mechanism to monitor demand and supply, price trends and industry practices with a view to maintaining competitive conditions," Von Amsberg said.

At the same conference, Von Amsberg asked the government to take further steps to boost its revenue base as new revenue measures were needed to deliver more social services and the infrastructure required for higher economic growth. He said the government should phase out redundant tax incentives and attack smuggling.

Von Amsberg likewise voiced the bank’s concern over corruption and governance issues especially in government owned and controlled corporations (GOCCs).