Alsons Cement may shut down one kiln

The prevailing slump in the construction industry and the continued influx of cheap imported cement may force publicly listed Alsons Cement Corp. to shut down one of its two kilns to cut losses.

Despite its efforts to avoid shutting down any of its manufacturing facilities, Alsons said the market has become so tight that the company is evaluating its position almost on a monthly basis.

Alsons chief operating officer Thomas Clough said that Alsons had already reduced its manpower significantly as it increased production efficiency to cope with the decline in the domestic demand for cement.

Clough said Alsons’ kilns could produce up to 1.8 million tons of cement a year but only 40 percent of this would go to the local market.

Last year, Clough said the domestic demand dropped by roughly 13.5 percent forcing local companies to seek other markets abroad to enable them to unload excess inventory and avoid shutting down their facilities.

This year, however, Clough said the market is still touch-and-go, despite the improvement in the confidence level of most investors on the economic outlook under the Arroyo administration.

"It is getting harder and harder to see into the future," Clough said. "Right not, we have orders up to March and we can be sure that our kilns would be in operation to meet these orders. The danger is if we can not find a market after the first quarter."

"Although the company is committed to keep them running, it is a distinct possibility that we might have to shut down Line 1, which at the moment employees about a hundred people," he added.

Alsons’ Line 1 is the older of its two kilns.

According to Clough, local cement manufacturers are facing stiff competition from imports coming mainly from Taiwan and Japan, as well as Indonesia and even mainland China.

"While there had been a net decline in domestic demand in 2000, imports grew sharply by something like 140 percent in the same year," he said. "This could only mean that imports are dislocating local cement from the market."

The Philippines had been ranked as the country’s most vulnerable to dumping as the whole Asian region struggles to cope with extreme supply glut conditions that have compelled some countries to dump cement into offshore markets.