Displaying items by tag: Philippines
Taiheiyo Cement Philippines to more than double capacity of San Fernando cement plant
17 August 2023Philippines: Taiheiyo Cement Philippines plans to install a second production line at its 0.8Mt/yr San Fernando cement plant in Cebu. The Philippines Department of Trade and industry says that the new line will more than double the plant’s capacity to 3Mt/yr. It will also entail an upgrade to reduce its total energy-related CO2 emissions by 10%. The Philippine Daily Enquirer newspaper has reported that the producer will additionally build a 700,000t/yr terminal at Calaca in Batangas. The facility will cost US$68.4m. Altogether, the company expects its growth plans to generate 2000 new jobs in the Philippines. The Philippines government has committed 6% of gross domestic product (GDP) to infrastructure investments annually.
Taiheiyo Cement Philippines previously indicated in August 2022 that the San Fernando cement plant might eventually expand to a capacity of 5Mt/yr. At that time, it expected to commission the new Line 2 in May 2024.
Special trade representative to the Philippine Trade and Investment Centre in Tokyo, Dita Angara-Mathay, said "The company's latest announcement materialises its plans to expand to Luzon from its long-time base in the Visayan region."
The close of the first half of 2023 brought the latest crop of seasonal cement data from the Vietnam National Cement Association (VNCA). Vietnam sold 61.4Mt of cement and clinker during the first half of 2023, up by 2.7% year-on-year.1 Graph 1 (below) tracks the progress of full-year Vietnamese cement and clinker sales over the six years up to 2022, as well as the most recent half-year.
Graph 1 - Vietnamese annual cement production, January 2017 – June 2023
The first half of 2023 marks the first half-year in which lockdown restrictions have been absent in both Vietnam and its main export market, China, since the start of the Covid-19 outbreak.2 Vietnam was especially hard-hit: it implemented the first lockdown outside of China in March 2020, and has recorded the 13th most Covid-19 cases of any country up to July 2023. Then, the Russian invasion of Ukraine in 2022 caused uncertainties for cement producers and importers all around the world. Yet the price of imported coal across Southeast Asia had returned to pre-war levels by the end of June 2023.3 This indicates that the first half of 2023 may represent a ‘typical’ first half for the Vietnamese cement industry, for the first time this decade. During the 2010s, this meant growth margins of over 10% year-on-year.
During the first half of 2023, Vietnam’s sales volumes grew by 30% from pre-Covid-19 levels of 47.1Mt in the first half of 2019, confirming the industry trend of rapid capacity expansion. Just in the course of the half year, Vietnam’s integrated cement capacity rose by 7.9% to 123Mt/yr.4 It previously rose by 6.9% year-on-year to 114Mt/yr in 2022. That year, first-half cement sales also grew by 6.9% year-on-year, to 59.8Mt from 55.9Mt. In the first half of 2023, capacity growth has outstripped the country’s sales growth, of 2.7% year-on-year.
Meanwhile, Vietnam exported 15.7Mt of cement and clinker in the first half of 2023, 26% of its total despatches.5 This corresponds to a decline of 31% year-on-year from 22.7Mt (38% of despatches) in the first half of 2022 and a rise of 0.5% from pre-Covid-19 levels of 15.6Mt (33%) in the first half of 2019.
Chinese construction is the lynchpin in the Vietnamese cement industry’s current growth model. Over successive Five-Year Plans, it has consumed increasing volumes of clinker from Vietnam, as well as cement, at diminishing prices. This strategy overreached itself in the first quarter of 2023, more than a year into an on-going Chinese property market slump, when the value of Vietnam’s cement and clinker exports to the country fell by 95% year-on-year, to US$11.4m.6
By lowering prices, Vietnam’s cement sector charts a careful course within the contested waters of global trade rules, but it has run aground before. Most recently, from the start of 2023, the Philippines attached tariffs of up to 28% (and up to 55% for blended cement) to Vietnamese cement from 11 different producers.7 The Philippines Tariff Commission had found that ‘dumped’ cement from Vietnam – constituting over 50% of cement imports over the 18 months up to the end of 2020 – threatened the domestic industry. The failure to diversify its markets is a further sign that Vietnam’s current positioning in the cement and clinker trade is, at best, medium-term.
From October 2023, cement entering the European Union (EU) will become subject to extra taxes under the carbon border adjustment mechanism (CBAM).8 The EU is a relatively small trade partner for Vietnam, but the longer-term effect of this policy will be to replicate itself in the statute books of other nations and trade blocs, beginning in the Global North. With forecast lignite imports of 70 – 75Mt to Vietnam in 2023 – 2026, opportunities for cement exports from Vietnam, and countries like it, are diminishing.
The best situation for Vietnam would be accelerated growth in its domestic consumption base. The government is attempting to trigger a construction boom with its 2023 budget, which includes US$5bn in residential construction funding. Meanwhile, full-year infrastructure spending will rise by 25% year-on-year.9 To this end, it also needs to keep the cement price low. From 1 January 2023, Vietnamese exporters paid a tax of 10% of value on shipments of cement and clinker, instead of the previous 5% rate. If successful, this will nourish booming consumption with booming, and cheap, supply. Vietnam is grafting its Chinese model back onto the domestic market.
Producers will keep exporting. In May 2023, Nghi Son Cement Corporation despatched a first shipment of 31,500t of cement to the US. Nghi Son Cement Corporation’s cement, produced with fly ash, is clearly considered by the company and its owners to have some long-term marketability in the US. Said owners include Japan-based Taiheiyo Cement, which produces cement in the US via its CalPortland subsidiary.
In Vietnam, the cement industry has undergone a period of unparalleled growth, fuelled by exports. It can now reinvest the proceeds in establishing a self-sufficient construction sector around an ever more sustainable cement industry, ready to become the first choice across new markets as they arise in Southeast Asia and beyond.
1. Global Cement, 'Vietnam's first-half cement production declines in 2023,' 29 June 2023, https://www.globalcement.com/news/item/15941-vietnam-s-first-half-cement-production-declines-in-2023
2. The Observer, ‘‘It was all for nothing’: Chinese count cost of Xi’s snap decision to let Covid rip,’ 29 January 2023, https://www.theguardian.com/world/2023/jan/29/chinese-cost-covid-xi-lockdowns-china
3. Reuters, ‘Column: Asia thermal coal prices get the blues from Europe and LNG,’ 20 June 2023, https://www.reuters.com/markets/commodities/asia-thermal-coal-prices-get-blues-europe-lng-russell-2023-06-20/
4. Việt Nam News, ‘Record input costs thwart cement groups,’ 12 July 2023, https://global.factiva.com/ha/default.aspx?mod=SavedSearch_SelectSearch&page_driver=SavedSearch_SelectSearch#./!?&_suid=168119771197707004455190223307
5. Việt Nam News, ‘Industry: Vietnam’s Cement, Clinker Exports +82.2% y/y to $116M in Jun: GSO,’ 4 July 2023, https://global.factiva.com/ha/default.aspx?page_driver=searchBuilder_Search#./!?&_suid=168908188871006418595282713178
6. Vietnam Investment Review, ‘A strenuous year ahead in cement,’ 9 May 2023, https://vir.com.vn/a-strenuous-year-ahead-in-cement-101707.html
7. Global Cement, 'Philippines Department of Trade and Industry to impose anti-dumping duties on cement from Vietnam,' 22 December 2022, https://www.globalcement.com/news/item/15084-philippines-department-of-trade-and-industry-to-impose-anti-dumping-duties-on-cement-from-vietnam
8. Global Cement, 'Too taxing? How the CBAM affects cement exporters to the EU,’ 29 June 2022, https://www.globalcement.com/news/item/14316-too-taxing-how-the-cbam-affects-cement-exporters-to-the-eu
9. Customs News, ‘Cement enterprises expect a "brighter" second half of 2023
https://english.haiquanonline.com.vn/cement-enterprises-expect-a-brighter-second-half-of-2023-25368.html
Philippines: Holcim Philippines and Sungshin Cement have signed a memorandum of understanding whereby Holcim Philippines will be priority supplier of cement for use in Sungshin Cement's ready-mix concrete operations in the Philippines, InPR News has reported. South Korea-based Sungshin is anticipating growing demand from infrastructure projects, partly due to a US$3bn development loan agreement between the government of the Philippines and South Korea.
Philippines: Metal and ores producer Global Ferronickel Holdings (FNI) plans to invest in clinker production operations. The company has indicated that it will also begin producing limestone to supply any clinker plants that it builds. The Manila Bulletin newspaper has reported that FNI's plans also include new ventures into value-added processing, including through the establishment of a ferronickel processing plant and nickel matte processing facility.
Philippines: Holcim Philippines introduced Holcim Optima, a blended Portland limestone cement (PLC), on the Philippine market on 8 June 2023. The Business Mirror newspaper has reported that Holcim Optima cement offers 10% reduced CO2 emissions compared to ordinary Portland cement (OPC).
President and CEO Horia Adrian said that Holcim Optima cement 'delivers the same strength, workability and durability as OPC and remains compatible with other cement additives such as slag and fly ash. The new product is best used in large building projects and available in bulk.' Adrian added "It is a timely product for the Philippines, as infrastructure building accelerates and green demand grows."
Philippines: San Miguel Corporation’s cement sales more than tripled year-on-year to US$183m during the first quarter of 2023, from US$57.1m during the first quarter of 2022. The group’s cement business contributed 3% of consolidated sales, compared to 1% in the first quarter of 2022. Overall, group sales rose by 9% to US$6.17bn, the Philippine Daily Inquirer newspaper has reported.
San Miguel Corporation completed its acquisition of Eagle Cement in December 2022.
Cemex Philippines halves CO2 emissions since 1990
18 April 2023Philippines: Cemex Philippines (CHP) says it has reduced the CO2 emissions from its subsidiaries, Solid Cement Corporation and APO Cement Corporation, by 50% between 1990 and 2022. From 2020 to 2022 CHP reduced its net CO2 emissions by 18%. The company claims this is the highest CO2 emissions reduction in the sector based on publicly released information.
Luis Franco, the president and chief executive officer of CHP, said "This milestone CO2 reduction was possible because of our team's high commitment to achieve net zero. We are on track to meet our ambition of less than 430kg of net CO2 per tonne of cement by 2030 and deliver net-zero CO2 concrete by 2050." He added that the company is confident it can reach a 67% reduction by 2030 through the continued used of alternative fuels and decarbonated raw materials.
Holcim Philippines' sales fall slightly in 2022
27 March 2023Philippines: Holcim Philippines recorded sales of US$490m during 2022, down by 1% year-on-year from US$499m. Sales rose by 9% year-on-year to US$266m during the second half of the year, 53% of the full-year figure. Throughout the year, the producer increased its alternative fuel (AF) substitution rate by 20% year-on-year and processed 1Mt of waste from industrial partners and local government bodies. Digitisation initiatives and alternative raw materials substitution helped the producer to reduce its specific CO2 emissions by 7%. The Business Mirror newspaper has reported that the year also brought 'surging' energy and fuel costs for the producer.
President and CEO Horia Adrian said "In the face of extraordinary challenges, our company and people displayed tremendous resilience that enabled us to deliver positive financial performance and contribute to building progress in the country. Alongside a strong sales rebound in the second half and expansion of our customer base, we accelerated the decarbonisation of our operations."
Philippines: Knauf Gypsum Philippines has petitioned the Philippines Tariff Commission to reduce the import duty on imports of Omani gypsum to 0% of value. Currently, Oman’s gypsum enjoys a most favoured nation (MFN) reduced tariff rate of 3%. The Oman Daily Observer newspaper has reported that high gypsum wallboard demand has created short supply of gypsum in the Philippines, according to Knauf Gypsum Philippines. Beside the company’s wallboard operations, the raw material is also critical to cement production in the country.
The Philippines receives a minor share of Oman’s 8.74Mt/yr of natural gypsum exports. The Southeast Asian country has a housing backlog of 6m units.
Philippines: Germany-based TÜV Nord has awarded three ISO certificates to Philcement Corporation's Bataan cement bagging plant and distribution centre in Mariveles. The facility achieved an ISO 9001:2015 for quality management, an ISO 45001:2018 for occupational health and safety management and an ISO 14001:2015 for environmental management.
Chair Ramon del Rosario Junior said “As we continue to provide a reliable and consistent supply of cement products of good quality, these ISO certifications attest to PHINMA, Philcement and our partners’ expertise in this industry. These give us even greater confidence in our operations and especially in the products that we offer our customers."