Cement price in RP lower than in 4 Asian countries .

PUBLISHED international news reports show that the price of cement in the Philippines is actually only just about average among 11 Asian countries.

This was pointed out by Rafael de la Torre, advocate from the Center for Organizational Studies and Advocacy (Cosa), placing in a different perspective an earlier government report that looked at only seven countries that listed the Philippines as having the second highest cement price in Asia.

The figures de la Torre disclosed were culled from reports in a meeting of the Asian cement producers conference in Taiwan held recently. The data also appeared in a number of publications citing cement prices in Asia.

The price of cement in the Philippines is higher than prices of cement only in countries with lower energy costs.

“The good news is the Philippine cement price is only 17-percent higher than Malaysia. We have actually not covered the costs of power and coal as much as Malaysia did. But we have to cover these costs. If the pricing does not cover the cost of power and coal, the industry will incur losses, collapse and will be unable to supply local demand,” de la Torre stressed.

“We will then be dependent on imports and subjected to higher prices, substandard quality cement and uncertain delivery schedules.  This will adversely affect the country’s infrastructure development program so vital to our economy,” de la Torre said.

He emphasized that the government must be very clear about its priorities and must decide whether it should support a strategic industry like cement, or allow it to lose competitiveness and suffer the same fate of other ailing industries.

Energy cost represents about 40 percent of the total cement production cost. The $0.14/kiloWatt hour (kWh), power cost in the Philippines is 56 percent more than Thailand’s $0.09/kWh, 75 percent more than South Korea’s $0.08/kWh, 100 percent more than Malaysia’s $0.07/kWh, and 180 percent more than Taiwan’s $0.05/kWh. Coal is also an imported product in the Philippines, and its cost is at least 30-percent higher than coal produced in other countries.

This year, the power cost in the Philippines became the highest in Asia, even surpassing that of Japan. And yet, because of efficient operations, the cement price in the Philippines is still only the fifth highest in a survey of eleven countries in Asia, de la Torre said.

The 11 countries, ranked from the highest to lowest priced cement are:  Japan, India, Brunei, Indonesia, Philippines, Malaysia, Taiwan, Korea, Thailand, Vietnam and China.

Cement sold in bags in Japan have an equivalent price of P411 per bag or double the price in the Philippines, after calculating the cement retail price with an assumed standard 12-percent value-added tax and packaged in 40 kilogram bags.

India has the second highest-equivalent price at P252 per bag.  The third highest price is Brunei at  P233 per bag.  These prices were computed from figures disclosed by Salman Siddiqui of  The News in Karachi and Bandar Seri Begawan of Brunei News.  Indonesia’s cement price is the fourth highest at P222 per 40 kg. bag based on figures reported at the Asian cement producers meeting in Taiwan.

The price of cement in the Philippines, recently reported at P211 per 40 kg. bag, came out midway among cement prices in Asia.

Next to the Philippines is Malaysia. The energy cost of producing cement in the Philippines, with 100-percent higher power cost and at least 30-percent higher coal cost than Malaysia, could have pushed Philippine cement prices higher than Malaysia by 30 percent because energy cost is 40 percent of production cost.


Source : Business Mirror