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By Katrina Mennen A. Valdez, Researcher
Cement consumption picked up in
the first quarter brought on by the strengthening economy, growth in
consumer spending and low interest rates, the Cement Manufacturers
of the Philippines announced Monday.
In a briefing, CEMAP president
Ernesto Ordoñez said total cement sales surged by 14 percent, or
3.285 million metric tons from 2.883 MT in the first quarter of
2007. The total consumption of cement last year reached 12, 449
million M.T.
“This positive development was
brought about by the strengthening economic activities, growth in
consumer spending and low interest rates,” Ordoñez said.
Besides positive growths in
economic activities and consumer spending propelled largely by low
interest rates, Ordoñez said strong remittances and the immediate
need for infrastructure facilities have also boosted the demand for
cement.
Despite the government’s
admonition to open up the market for imported cement, which is
slapped only 3 percent tariff duty for every 40 kilo, Ordoñez said
only “few contractors have availed themselves of imported cement
due to the high business risk.”
“Contractors prefer local
cement producers because [to do so] is more cost efficient as they
do not have to worry about inventory, availability, on-time
deliveries and quality,” he said.
In a related matter, Ordoñez
pointed out that in Taiwan, a dumping safeguard of 43-percent tariff
is imposed on Philippine cement manufacturers. In Malaysia, tariff
stands at 50 percent and Vietnam at 20 percent.
“Though we only ship a minimum
volume of cement [abroad] it would be better if it is lower,
especially if you compare that to our tariff here,” he suggested.
“Forty percent of road building
cost and 8 percent of building cost are cement, so why do
contractors take the risk of importing cement without legal
guarantee that if their product fails it would be replaced for
free?” Ordoñez explained.
Furthermore, he said that from 56
percent of log capacity, cement manufacturers are now disposing 60
percent a month of the total production a month.
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