Cement prices remain stable

MANILA, Philippines - There will be no price movement for cement despite of the decrease in prices of other construction materials, an industry player said yesterday.

At the sidelines of yesterday’s stockholders’ meeting, Holcim chief operating officer Ian Thackwray said they do not see any price increases for cement. Likewise, he said there will be no downward adjustment just because the price of other construction inputs went down.

Thackwray explained that the prices of other construction materials like steel went up significantly last year. As a result, he said there is much room for these products to lower their price.

On the other hand, Thackwray said they have only raised their price twice last year. The last was in October 2008. On the upside, there will be no price increase because he said they have already managed the cost of their coal import.

Also, Thackwray said the competitive situation will not allow for any upward adjustment in prices. He said the move of the government to remove the tariff duty on imported cement has not put a dent on their market share. However, it has ensured that the prices will not go up.

The cement is still operating under excess capacity as they produced only 4.6 million tons last year. Total capacity is 6.5 million tons. For this year, Thackwray said they are confident their production will be better than last year.

“The first half was strong. The second half depends on the infrastructure projects of the government,” he noted. “For 2009, anything better than zero is good news.”

For the first four months of the year, volume went up by six percent to eight percent. He said there is a strong possibility that they will be able to sustain this growth until the end of the year.

Thackwray said that they have three lines that are currently not running. He said there are no plans to operate these lines this year despite of the six percent growth in cement demand for the first quarter.