Bizman denies cement shortage claim in Metro Manila

MANILA--There is no indication at all of a supposed shortage of cement, a construction retailer/property developer in Rizal province said Friday.

“Shortage? As far as the current supply of cement in the National Capital Region, I don’t think so,” Wilson Gaw, owner of Durawood Lumber and Construction Supply in Antipolo, Rizal, said in an interview.

Gaw, whose businesses cover the whole of Rizal province and nearby areas, is knowledgeable in the construction business as Durawood has partnered with its sister company Duraville Realty and Development Corporation in the development of middle-scale townhouse projects in and around Metro Manila.

Earlier, property consulting firm Pronove Tai claimed there is a cement shortage and warned of delays in the completion of buildings undergoing construction in 2019.

“On the contrary, I think there is a surplus of cement supply. In fact, for the first month of the year, we have experienced a drop of about 10 to 20 percent in our sales of cement compared to the previous year,” Gaw said, noting they have adequate stocks of the product.

He said the drop in the demand could be attributed to the pending signing of the 2019 national budget that is necessary to fund the ongoing infrastructure projects of the government.

Price remains stable

Another major indicator that debunks the claim of cement shortage is that the price of cement has remained stable, Gaw said.

The wholesale price of a 40-kg. bag of cement is sold at around PHP222, while, for retail, each bag costs between PHP230 to PHP235.

“That price has been prevailing for about four months,” he pointed out.

In January this year, the Department of Trade and Industry (DTI) Regional Consumer Protection Division and Provincial Offices reported that retail price per bag of cement ranged from PHP220 to PHP230 in Bulacan, PHP220 to PHP250 in Nueva Ecija, PHP227 to PHP240 in Bataan, PHP230 to PHp245 in Pampanga, PHP230 to PHP250 in Zambales, PHP240 to PHP255 in Tarlac, and PHP242 to PHP255 in Aurora.

In other regions, the DTI said the price per bag of cement ranges from a low of PHP205 to a high of PHP380.

Even if the demand perks up by the second quarter and toward the end of the year, Gaw said he does not expect any shortage in the supply of cement.

“Let’s assume that the budget would be signed around the time of the Holy Week, but after that, what do you have? Rain,” he said.

Gaw noted that the onset of the rainy season normally dampens construction activities, as well as the demand for cement.

He said an uptick in construction activities would likely occur during the last quarter of 2019, but even this would not likely cause any shortage in cement.

Growing local production meets demand

Pronove Tai claimed the local cement industry is not producing enough to meet the annual demand of 32 million metric tons (MT).

However, the DTI has earlier allayed fears of a cement shortage as a result of the safeguard measures it slapped against the unbridled importation of cement.

The DTI said the present domestic capacity of 35 million MT a year is enough to meet the growing local demand with various capacity expansion projects going operational this year and in the next three to five years.

Holcim, which is being blamed as the cause of possible shortage, announced that it had complied with all environmental rules and expects to resume operation of its Batangas plant soon.

On Feb. 22, 2019, Holcim also announced it had completed an upgrade at its cement plant in Bacnotan, La Union, increasing the unit’s production capacity to 1.8 million MT per year from the previous 1 million MT.

According to Holcim, it plans to increase its national production capacity by 30 percent to 13 million MT/yr by 2020. The second phase of the project involves installing new kilns, mills and a waste-recovery system at its plants in Bulacan and Misamis Oriental provinces. The Board of Investment has already given the green light for Holcim’s Bulacan plant.

Another local cement manufacturer, Cemex Holdings Philippines Corp. (CHP) announced it would spend PHP7.5 billion in capital expenditures this year, mainly to support the expansion of its Antipolo cement plant.

The CHP earlier committed to spend a total of US$235 million to boost Solid Cement plant’s capacity by 1.5 million MT from the current 1.9 million MT. The expansion will also increase the firm’s overall capacity by 26 percent.

Local cement industry injured

The DTI has imposed the safeguard measures after finding evidence that unmitigated cement importation is causing injury to the local cement industry. It has submitted its findings to the Tariff Commission to aid the body in determining the need to make the safeguards permanent.

Based on DTI’s findings, cement imports surged in the past five years from just 3,558 metric tons in 2013 to more than 3,000,000 metric tons in 2017 and reaching almost 5,000,000 metric tons in 2018. By allowing the entry of loose cement imports with zero tariff, pure importers’ share of the market jumped from a measly 0.02 percent to 15 percent from 2013 to 2017.

Various consumer groups are for the safeguard measures to sustain the growth of the cement industry, which employs 42,000 workers and contributes PHP21 billion in tax revenues to the government.

The safeguard measures also check the entry into the Philippines of substandard imported cement following reports that such products from Vietnam are made using old technology that results in low quality cement often sold at cheap prices.

There was also the case when cement from Vietnam that was exposed to seawater while being shipped to the Philippines was still repacked and sold locally after it was unloaded in Subic, Zambales. (PR)