Republic Cement vows to keep prices steady

Despite incurring huge losses due to the unabated flooding of dumped imports, Republic Cement Co. pledged yesterday not to increase its average cement prices should the government impose a temporary 200 day safety net for the industry against imports.

Republic Cement is the holding company of Fortune Cement Corp., Iligan Cement Corp. and Mindanao Portland Cement Corp. It also maintains its own facilities in Bulacan. Republic’s pledge follows that of another major cement producer, Union Cement, which also committed to stable prices while the safeguard measure is in place.

Republic Cement president Juan Miguel Montinola said the group of companies would hold its net "ex-plant" cement prices at P126 per bag this year for all its products, including bulk and pozzolan, and would be adjusted only to reflect significant peso-dollar fluctuations.

According to Montinola, Republic and its subsidiaries made this pledge to assure the government and the public that it would act responsibly.

Montinola said "DTI’s decision on the local industry’s safeguard application will dictate the industry’s survival or collapse. Its grant will not lead to any increase in the Republic group’s net ex-plant cement prices but will instead assure the survival of the local industry."

The Republic group has also committed to do other measures to assure stable prices. One initiative to insure stable prices throughout the third-party distribution chain in Republic group’s issuance to dealers of a recommended retail price list by region.

Montinola said Republic would also "continue to encourage the use of pozzolan cement for general construction purposes, where applicable to contractors and consumers." It is a superior product when properly applied, environmentally friendlier to produce and, best of all for the consumer, is at least P5 per bag cheaper than type 1 Portland cement," he said.

Montinola also said that with regard to government infrastructure projects, the Republic group would maintain its policy of offering long-term contracts for cement supply at locked in and competitive prices.

"We continue to work hard on the areas that we control such as the ongoing manufacturing programs," Montinola said. "This is evident in the numerous awards that the group has achieved in quality, environment, employee health and safety, and energy conservation."

"With imports growing at more than 10 percent since June, however, these efforts will clearly not be enough at this critical stage, hence our urgent request for safeguard measures," Montinola added. The market share of imports rose from 24 percent in June to an alarming 35 percent in July, confirming industry fears of more cutbacks in production and layoffs. The current reduction in sales has already resulted in the company laying off as many as 192 workers.

"These measures are intended to control but not eliminate imports and are in accordance with a World Trade Organization provision to allow countries temporary reprieve from injurious surges in imports," he said.

Montinola said that "import dependence would be detrimental to consumers and the country in the long term because stable prices and steady supply would not be achieved. If there is no viable local industry, imports will then be free to dictate exorbitant prices. Also, excess capacities can flow to other areas of opportunity, whether in the foreign producers’ home market or elsewhere, rendering the Philippines helpless and in a bind."