Cement makers want to keep perks

MANILA, Philippines - Cement manufacturers appealed yesterday to the Board of Investments (BOI) to not limit the incentives under the Investment Priorities Plan (IPP) to new players saying that it will penalize the existing players who have spare capacity.

In an interview at the BOI office, Cement Manufacturers Association of the Philippines (CEMAP) president Ernesto Ordoñez said that the incentives will be given to new players but not to the existing players who can do exactly the same thing with their underutilized capacity.

“Today, only about 52 percent of our existing grinding or finish milling capacity is used. BOI incentives that encourage adding to the unused capacity mean effectively wasting resources at a time when we face a huge government deficit,” Ordoñez said.

Likewise, he warned that the unfair advantage given to new players may eventually result in the reduction or closure of local clinker production. He estimated that the added value of this is 70 percent to 80 percent of the cement production.

He explained that local clinker production may lose its viability if the new grinding mills can import clinker. Also he noted that the incentives will change the rules of the game midstream.

“Once the cement industry becomes grinding mill oriented and predominantly dependent on imported clinker as raw material, the market becomes exposed to the vagaries of imported products,” Ordoñez said.