Cement company’s sales decline

Sun.Star Cebu <> Thursday, June 12, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

APART from the rising cost of raw materials, power and fuel, a cement manufacturing company is also worried over the decline of the demand for its product this year compared to last year.

Although lawyer Darwin Mariano, Cemex Philippines public affairs director, declined to provide figures on the demand for their products in the market, he admitted that it is “lower” this year and it is not as much as last year.

One of the possible factors for the slowdown, he said, was the delay in the signing of the national budget, which also resulted to delay in national spending, especially for infrastructure.

President Arroyo signed last March the P1.227 trillion national budget for this year. It includes a P20 billion increase in the funds for roads and bridges and an additional P2 billion for school building projects.

Infrastructure

“The biggest driver for the demand is public infrastructure spending, such as (for the building of) dams, roads and bridges.

Residential (units), on the other hand, do not contribute much to the demand,” Mariano told reporters during the mine and plant tour in Apo Cement Corp. in the City of Naga yesterday.

The tour was organized by the Department of Environment and Natural Resources’ Mines and Geosciences Bureau as one of the activities in observance of the Philippine Environment Month.

Mariano also attributed the decrease in the demand to unpredictable weather and erratic rainfall as well as a slowdown in political activities since this is not an election year.

“There was much spending on infrastructure during the election last year,” he said.

To cope with rising operation expenses, with 60 percent to 70 percent of its production cost dependent on electricity, Cemex Philippines continues to manage its operation “efficiently” by being “environmentally compliant.”

One example is the promotion of a “blended” type of cement that contains only 68 percent clinker.

Clinker is mixed with other components such as gypsum, pyrite and Pozzolan.

Apo Premium, which can be utilized for one to four story structures, is an example of blended cement.

Clinker or solid nodules is the cement’s main ingredient produced by a cement plant from limestone using very high temperature. The production of clinker is the “most energy-extensive.”

However, Mariano said that with less clinker in their products, energy consumption is reduced and lesser carbon dioxide is emitted.

Prices rise

“It can even perform better. Because it will be using less power, it doesn’t necessarily mean the end-products will be cheaper. The prices of products will still be (more or less) the same due to the high prices of fuel and other materials,” he said.

Prices for gypsum, for instance, “shot through the roof” from “several hundred pesos per ton to over a thousand per ton.” With only one supplier of gypsum in the country, Apo Cement Corp. is “forced” to adjust their prices.

8990 Housing Development Corp. president JJ Atencio earlier commented, though, that unlike steel, cement is the most stable building material in the construction market today.

While the company is currently absorbing the bulk of the input costs for production, Cemex is asking the Department of Trade and Industry for help to discuss how they can cope up with these surging prices.

“The philosophy of the company has always been that if we will not be environmentally-compliant, then we will be wasteful. If we will be wasteful, we will not be efficient. If we will not be efficient, we will not be making money, and there will be no business,” Mariano said.

Apo Cement Corp., which sits on a 90-hectare area and produces around 200,000 bags daily, also maintains six electrostatic precipitators for its coal mill, cooler and kiln in order to capture dust emissions and use them for their products.

The plant, with its 231 employees, also maintains a closed water system to prevent its wastes from going out of the plant.

Last April, Cemex cements bagged the Green Choice Seal Award. It is given by the National Eco-labeling Board of the Philippines to companies whose products are considered to be eco-friendly.

Filed under: Uncategorized