Cement makers see brighter market prospects

Local cement manufacturers are optimistic of sustaining a bullish run this year, with expectations of a strong double-digit growth in sales, according to the Cement Manufacturers Association of the Philippines (Cemap).

This expectation assumed that the government would continue to ramp up its investments in public infrastructure spending and private sector confidence would be sustained, Cemap president Ernesto Ordoñez told the Inquirer.

The last figures released by the group showed that sales of local cement manufacturers grew by 13.6 percent in the first nine months of 2015 to 18.28 million tons on the back of continued brisk construction activities.

In the third quarter of 2015, cement sales saw a faster growth of 18.6 percent to 6.37 million tons from 5.37 million tons in the previous year, boosted by sustained business confidence, and faster rollout of funds by the government.

“We see an increase in (the rollout of) public infrastructure projects this year and likely, cement sales will be better than the rolling average (of sales in the last five years). If we are able to grow by double digit in 2015, there is a chance that this will continue (in 2016) on the back of a strong public works budget and continued confidence from the private sector…. Cement sales will see increases provided there will be no hiccups or scandals,” Ordoñez explained.

The private sector remained the biggest customer of cement manufacturers as about two thirds of the cement being sold in the country are usually taken up by companies for their construction projects, while the remaining one third is usually taken up by government agencies for public works.

Ordoñez declined to cite a specific forecast but noted that over the past five years (excluding 2015 when sales had been exceptionally strong), the rolling average of cement sales has been around roughly 8 percent.

“It depends on (a number of factors) but there are indications that sales in 2016 would be stronger than the rolling average of five years,” he said.
For 2016, cement manufacturers are also expected to continue facing a number of challenges that include mitigating impact of climate change and ensuring quality, particularly in cement imports.

Philippine cement manufacturers, he said, have been doing their fair share in helping curb the greenhouse gas emissions from their facilities by adopting new technologies, and have even been cited by some award giving bodies for their efforts.