Cement sales went up by 14 percent from January to April this year as demand from the construction industry continued to rise.
The Cement Manufacturers Association of the Philippines (CeMAP) said sales from January to April reached 4.3 million metric tons from 3.779 million metric tons during the same period last year.
CeMAP president Ernesto Ordoñez said the increase in cement sales could be attributed to the growth in the construction sector “fuelled largely by overseas Filipino remittances and renewed business confidence.”
At the same time, CeMAP assured the public there will be enough supply of cement despite the projected increase in demand.
“As it is, the cement industry is still grappling with problems of overcapacity. For the past five years, cement demand has been stagnant and capacity utilization has averaged only 60 percent. Local cement manufactures can adequately meet the demand, at least in the next six years,” CeMAP said.
When asked if cement prices will go down, CeMAP said the cement industry is in fact just starting to recover after piling up more than P9 billion in losses from 2002 to 2003. The group said due to soft demand and stiff industry competition, cement makers are still hard pressed to recover their input costs.
The cement manufacturers are blaming the high cost of power as the main reason why the cost of cement in the Philippines is deemed highest in the region.
The World Bank has noted that cement prices in the Philippines are among the highest in Asia. As of last year, cement per ton was pegged $72 compared with $35 in China, $50 in Thailand and $65 in Vietnam.
The association said one of the major determinants of cement prices in the Philippines is power cost, which accounts for approximately 25 percent of the total cost. Therefore, to bring down cement prices efforts should continue to bring down the cost of power and control overpricing at the retail level where the manufacturers have no control.
The Department of Trade and Industry (DTI) have asked the cement companies to submit their costs to determine if cement is indeed overpriced. Although the companies have already complied months back, the government agency has not yet ruled on the issue. Trade Secretary Peter B. Favila said they are still studying the matter.