Displaying items by tag: Philippines
There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.
The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).
One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.
Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.
Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.
Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.
Philippines: Holcim Philippines has announced that it may delay the construction of a proposed US$550m 2.5Mt/yr capacity cement plant in Bulacan province that was due for commissioning in 2016.
The announcement was made due to the impending economic integration of the Association of Southeast Asian Nations in 2015. Southeast Asian countries, including the Philippines, will eliminate tariff rates on goods to facilitate free flow of commodities under the Asean Free Trade Area.
"We have to plan as a region because the region is consolidating," said Eduardo Sahagun, Holcim Philippines chief executive, adding that Vietnam and Indonesia both possess excess capacity. Holcim Philippines made several investments in 2013 to boost supply, including plant upgrades in La Union and Misamis Oriental provinces and the revival of a grinding facility in Mabini, Batangas, which will be operational by the third quarter of 2014.
Sahagun said that the company's outlook on cement demand in the country remained positive. "The growth scenario is the same but where the supply will come from will change," Sahagun said.
Philippines: Lafarge Republic plans to build a 0.85Mt/yr grinding plant for its Norzagaray cement plant to meet increased cement demand. The grinding plant will be commissioned in the second quarter of 2015.
The new grinding plant is intended to supplement the output of a new mill at its Teresa cement plant in Rizal province, which due to be commissioned in the first quarter of 2015. The Teresa mill is expected to have an investment of at least Euro25m and will have a production capacity of 0.85Mt/yr.
The two mills will increase Lafarge Republic's cement production capacity to 6Mt/yr. Lafarge manufactures the cement brands Portland, Pozzolan and Type 1P. It sells its products in 40kg bags or in bulk at 800kg and 1000kg per load in bulk carriers.
Philippines: Lafarge Republic signed a contract with Fives FCB for a new cement grinding plant for the Teresa plant located in Rizal province. The proposed plant will add 850,000t/yr production capacity to the Teresa plant's capacity in 2015. No financial information for the contract has been released.
The contract includes raw material feeding, with clinker and pulverised coal fed through the existing circuit and other additives, such as a limestone, gypsum, fly ash, fed by truck dump. A cement grinding workshop will be fitted with one Horomill® 3800 and one TSV™ 4500 classifier, associated with a dryer-aerodecantor and a TGT™ filter (under Fives Solios licence). A Fives Pillard vertical hot gas generator (12 MW) for the pouzzolana (25% moisture) drying will also be fitted.
The plant's cement silo will have a capacity of 5000t. A new cement transport system will connect the new silo, the site's existing silos and the packing plant. The contract also includes the control and supervision system and an electrical sub-station for the new build.
Sweden: Following the devastating hurricane in the Philippines, Sweden's Cementa AB has announced that it will donate its annual Christmas gift of Euro22,400 to Médicins sans Frontières (MSF) (Doctors Without Borders), which is operating in the worst-affected regions.
The move makes a break with Cementa's traditional method of splitting its Christmas gift to several organisations. The company said that the need was so great in selected regions that it had decided instead to support only one organisation in 2013.
"We see this as a chance to actively do something for the affected areas in the Philippines," said Fredrik Jansson, Vice President Sales and Marketing at Cementa AB. "Hopefully others in the construction industry (will support) the same initiatives in support of the affected areas."
Philippines: Thailand-based Siam Cement Group seeks to put up a manufacturing facility for fibre cement boards, smart boards and ceramic tiles, The Nation reports. These planned projects would cater to not only the domestic market but also SGC's markets across the Asean nations.
"If the products are marketable here, we plan to produce those products here. Investments would depend on market size. For example, for fibre cement board, we need (to be able to sell at least) 5Mm2 to (justify the cost of putting up a facility). The current local demand is 30Mm2," said Surasak Kraiwitchai-charoen, international business director of SCG Building Materials Group in Thailand.
Philippines: Cement sales in the second quarter of 2013 have increased by 8.8% to 5.35Mt from 4.92Mt in the same period in 2012, according to data from the Cement Manufacturers Association of the Philippines (CeMAP). CeMAP commented that it expects the industry to grow as there is an increase in building construction, infrastructure projects and farm-to- market roads, which will now be built using cement.
The increase in sales marks a return to the growth seen in the fourth quarter of 2012 when sales rose by 8.5%. In the first quarter of 2013 sales growth fell to 3%.
Filipino infrastructure spending is expected to grow in 2013. The government has budgeted around US$6.9bn, around 2.5% of the country's gross domestic product, for projects. CeMAP has not yet forecast how much sales will grow by the end of 2013.
Philippines: The Cement Manufacturers' Association of the Philippines (CeMAP) is supporting major cement players in the Philippines to tap rainwater in a move that supports national and global water conservation efforts. CeMAP said that local cement producers have decided that the use of rainwater sits well with their water-management concepts. Water is mainly used to cool cement kilns and the hot gas streams used in cement production. Production of a tonne of clinker in modern cement plants consumes an average of about 100-200L of water. The cement plants use an average of 3.2BnL/yr of water.
"Sustainability has always been a major advocacy of all cement companies. A critical strategy for sustainable development includes implementation of effective water management systems in cement plants," said CeMAP president Ernesto Ordoñez. He added that the scheme reduces the dependence of cement plants on water coming from traditional sources such as waterways and commercial suppliers. Cement producers in the Philippines are also considering installing waterless urinals at their plants, which can save an average of 180,000L/yr of water.
Philippines: Cemex Philippines has announced that it will undertake a US$60m expansion at its APO Cement Plant in Cebu to increase its production capacity by 1.5Mt/yr. The plant currently has a production capacity of 2.9Mt/yr. It wants to keep pace with the rapid growth of the Philippines market. It is also expanding its Antipolo plant, which currently has a mixture of dry and wet process kilns.
Cemex Philippines has supplied cement to numerous road paving projects in the country, which is rapidly developing. Its president Pedro Palomino said, "All industries, all sectors of an economy, rely on a country's infrastructure to support their economic activities. Factors such as reliable transportation and communication networks ensure smooth business operations, that products and services are delivered efficiently, on time and at competitive costs."
Three stories this week from the Philippines build a complex picture of a booming cement industry. San Miguel purchased a 25% stake in Northern Cement, Lafarge Republic announced its capital expenditure budget for 2013 and the country's on-going price probe reported on its progress.
San Miguel's entry into the market should raise the most interest since its president stated that the company intends to spend US$750m on the construction of three cement plants. Each plant will have a cement production capacity of 2Mt/yr with construction timed to start in 2013 and finish by the end of 2015.
This level of investment, if it happens, surpasses the last major build announcement in the Philippines. In May 2013 Holcim released details of a US$550m plant in Bulacan with a capacity of 2.5Mt/yr. Some indication of the viability of San Miguel's plans may be gleaned from the comparative costs of the projects. San Miguel's plans will cost US$125/t of installed capacity, less than half of Holcim's US$220/t. Possible reasons for this difference may lie in San Miguel releasing the wrong figures or a reliance on lower build quality. However San Miguel's sheer size - its net income was US$2.25bn in 2011 - may itself herald the start of a major player in the domestic cement industry.
Meanwhile the Department of Trade and Industry (DTI) has continued to investigate why the price of cement has risen since 2012. Currently prices are about 5% above the suggested retail price for cement. Cement producers blamed the increases on a higher cost of coal.
The Philippines is currently experiencing massive cement sales increases. In 2012 sales rose by 17.5% to 18.4Mt from 15.6Mt in 2011. With a total capacity of 21Mt/yr and a capacity utilisation rate of 85% in 2012, this growth looks set to continue in 2013, as confirmed by more rises in sales in the first quarter.