Cement manufacturers may put up more plants

MANILA, Philippines - Cement manufacturers are lining up to set up plants in the Philippines to capitalize on the country’s “golden age of infrastructure.”

Trade Secretary Ramon Lopez said aside from existing players looking to expand their production plants, several new players are also looking to put up cement manufacturing facilities in the country.

“They are all looking at expansion. Some of them said they have plans and have clearances already. You can see more vibrant participation from producers,” Lopez said.

Lopez said two new greenfield projects in the sector could also be expected—one from an entirely new local player and the other will be from an existing importer.

“Our demand is bigger than our supply which is why we import. So obviously, there is a market, especially with the golden age of infrastructure in the country,” he said.

The Duterte administration is ushering in the era of the golden age of infrastructure for the country with a national infrastructure budget of around P8 trillion until 2022.

In 2016, the local cement industry was able to finish with higher sales despite a slowdown in the fourth quarter due to unfavorable weather conditions.

Cement sales rose 6.6 percent to 25.96 million tons last year from the previous year’s 24.36 million tons.

An industry official said the country’s booming cement industry first broke past the 20-million ton sales barrier in 2014 and continued with its growth the succeeding years.

Despite this, the Philippines still has a lot of catching up to do with the other countries in the region in terms of cement sales as they are already in the 30 million tons mark.

The local cement industry, however, is currently facing a possible probe from the Philippine Competition Commission (PCC) for alleged violations of competitive practices as claimed by Victorio Dimagiba, a former trade undersecretary who now serves as president of consumer advocacy group Laban Konsyumer Inc.

The PCC said it conducted a preliminary inquiry on Dimagiba’s affidavit-complaint and found reasonable grounds to proceed to a full administrative investigation on the cement industry for possible violations of Sections 14 and 15 of the Philippine Competition Act.

In his affidavit–complaint, Dimagiba said the Cement Manufacturers Association of the Philippines, led by its president Ernesto Ordonez, LaFarge Holcim Philippines Inc. and Republic Cement and Building Materials Inc. violated the provisions of the Philippine Competition Act by engaging in anti-competitive agreements.

Such anti-competitive agreements include “restricting competition as to price or components thereof or other terms of trade, abusing their dominant position by engaging in conduct that substantially prevent, restrict, or lessen competition, imposing barriers to entry, or committing acts that prevent competitors from growing within the market.”

Lopez said DTI welcomes the investigation to be conducted by the country’s antitrust body.