Cement industry growth ‘to continue’-A A +A
Tuesday, March 4, 2014
CEMENT manufacturer Cemex Philippines remains optimistic that growth in the cement industry will continue to grow stronger this year on the back of the robust construction industry and high government spending.
“We expect the growth to continue this year,” said Paul Arcenas, Cemex Philippines vice president for strategic planning at the sidelines of yesterday’s Build Unity launching rebuilding program of Cemex Philippines Foundation for the communities in northern Cebu.
Arcenas said the industry logged six percent to seven percent growth per year over the last three years.
According to industry reports, cement sales in 2013 grew 5.9 percent to 19.445 million tons from 18.356 million tons in 2012. The last quarter of 2013 added 4.503 million metric tons (MT) in sales or 2.1 percent higher than the 4.409 MT in the same quarter of 2012.
In 2012, the local industry posted a 17.5 percent growth, its highest in 15 years, having sold 18.4 million tons of cement from 15.6 million tons in 2011.
Cement firms attributed the growth to accelerated government and private sector projects. They predicted growth will be sustained in 2014 with the growing list of infrastructure projects under the private-public-partnership program and the increase in budget of the Department of Public Works and Highways for infrastructure and housing programs.
In anticipation of the huge demand, Arcenas told Sun.Star Cebu that the company is allocating $80 million to finance the additional 1.5 million metric tons capacity in its Naga plant this year as well as the expansion of terminals and improvement of distribution facilities.
According to Arcenas, it will add 40 percent to the total Cemex Philippines capacity.
The Naga plant expansion will come on stream by the second or third quarter this year.
Cemex Philippines has two production plants in Antipolo, Rizal and Naga, Cebu.
Asked about the company’s preparation for the Asean single market, Arcenas said they have been tracking the progress of the integration and they see the opening of the single economy both as a threat and as an opportunity.
Although cement production in the country and in other Asean countries is meant to fulfill the domestic demand, the opening of the single market will mean they will have to constantly upgrade products to remain competitive in the market.
On the other hand, Arcenas also said the integration will mean more market accessibility and that the flow of capital will translate to more projects that would spur more construction activities.
But even without tapping Asean neighbors yet, Arcenas said the Philippines is already a huge market for cement with other key provincial cities growing faster in Western Visayas, Mindanao and Northern part Luzon.
“We are hopeful that construction will continue to grow because this is the key to nation’s growth,” he said.
Amid the growth and opportunities, Arcenas identified energy price and availability as one of the challenges faced by the industry.
“The high cost of power and its limited availability is affecting the production and distribution of this energy-intensive venture,” he said.
Published in the Sun.Star Cebu newspaper on March 05, 2014.