Holcim to raise cement prices by 2-4% next week

MANILA, Philippines - Holcim Philippines Inc. said it will increase cement prices by two percent to four percent in Metro Manila and Southern Luzon next week as power costs in Mindanao continue to rise.

In a telephone interview, Holcim vice president Ed Sahagun said they have written the Department of Trade and Industry (DTI) to inform them the price of cement will go up by P5 to P8 per bag on June 21.

This will bring cement prices in Metro Manila to P217 per bag. Early this year, Holcim increased the price by P5 to P8 per bag in Mindanao and Northern Luzon.

However, Trade Undersecretary Zenaida C. Maglaya said they do not see any reason for Holcim to raise their price because the power crisis in Mindanao should have a minimal effect on them. Maglaya said that although they allowed Republic Cement to adjust their prices, it does not mean that they will allow all manufacturers to do the same. “It’s a case to case basis.”

Sahagun said the Mindanao power crisis has raised the cost of power by 42 percent in the region. Likewise, since January, Sahagun said fuel cost went up by 20 percent. Holcim has two plants in Mindanao, one in Davao and the other in Misamis Oriental.

In a separate interview, Trade Undersecretary Elmer C. Hernandez said cement manufacturers should learn to cut costs by transferring manufacturing in their plants outside Mindanao. “I’ve just been in Davao and cement prices there is cheap. It is only P200 per bag.”

“Businessmen are just using the power crisis as an excuse to raise their prices,” he said.

Despite this, Sahagun insisted they are already operating at full capacity for their Bulacan and La Union plants.

Data from the Cement Manufacturers Association of the Philippines (CeMAP) Inc. showed that as of January 2010, Holcim has 3.18 million in idle capacity. Last year, the industry only used 52 percent of their grinding capacity and 59.2 percent of their clinker capacity.

Even with the spare capacity, Sahagun disclosed they are importing clinker from Japan. Likewise, the Mindanao power crisis has resulted in the closing of one of their lines in their Lugait plant in Misamis.