Cement sales down 6.7% in 1st quarter

MANILA, Philippines - Cement sales went down 6.7 percent for the first quarter as demand tapered off, the Cement Manufacturers Association of the Philippines (CEMAP) reported.

CEMAP president Ernesto M. Ordonez said sales for the first three months of the year stood at 3.8 million metric ton, lower than the 4.076 million metric ton recorded during the same period a year ago.

Ordonez said there was a decline because the buying behavior of consumers normalized. He reasoned that the first quarter of 2010 was abnormally strong given the devastation brought by typhoon Ondoy and Pepeng during the last quarter of 2009.

Total sales for 2010 were at 15.5 million metric tons an improvement from 2009 sales of 14.5 million metric tons.

Last year was a banner year for the cement industry given that the previous high for the industry was at 1997when sales stood at 15.2 million metric tons.

For this year, Ordonez said their sales target is four.

He said the capacity utilization for plants is still at 60 to 65 percent.

Meanwhile, an industry source who spoke on the condition of anonymity said companies are reporting losses because of high coal prices and fuel costs. The source said prices went up due to the flooding in Australia coupled with unusually high fuel costs.

Even with the high production costs, cement firms are not increasing their price because the demand is low and there is stiff competition.

In fact, the source said they dropped their prices from P215 to P220 per bag in November 2010 to below P200.