MANILA, Philippines – Cement sales dropped 6.7 percent in the first quarter of the year after huge election spending fueled an abnormally high growth in cement sales in the same period in 2010.
Cement Manufacturers Association of the Philippines president Ernesto M. Ordoñez told reporters that sales dropped to 3.8 million metric tons in the January-March period this year from 4.076 MMT in the same period in 2010. Total sales in 2010 stood at 15.5 MMT.
Ordoñez explained that election spending in May 2010 has fueled growth in cement sales in the first quarter of that year.
“2010 was driven by elections spending and Ondoy repairs,” he said. Capacity utilization of cement plants is expected to remain at 60 to 65 percent while demand at 15 MMT to 16 MMT.
With the lower first quarter growth, Ordoñez said, the industry may revise its four percent growth projection for the year.
Meanwhile, an industry source said that CeMAP is planning to ask the Department of Trade and Industry to intervene as some companies are incurring losses due to the high cost of coal and fuel cost. Cement plants are using coal imported from Australia.
According to industry players, Australia has raised prices following the huge flooding.
On the other hand, cement manufacturers cannot increase prices because of low demand and stiff competition.
Some players have attempted tor raise prices early this year only to revert back to their old prices.
In fact, prices of cement have dropped from P215 to P220 per bag in November last year to below P200 now.
New player Eagle Cement has started selling last year but is using imported clinker. The firm hopes to start operating its kiln this year. (BCM)
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