Republic Cement and Building Materials Inc. is planning to hike its manufacturing capacity by 25 percent next year to address the increasing demand for the construction material amid the current infrastructure boom.
Republic Cement, the joint venture between Aboitiz and European cement firm CRH, said it expects total domestic cement production to hit an estimated 33.5 million tons by the end of the year.
The Cement Manufacturers Association of the Philippines to which Republic Cement is a member, earlier said its members have total annual installed and operating capacity of 34.5 million tons.
“If we assume this year the market is hovering around 33.5 million tons, the industry cement grinding capacity is exceeding this. It means, technically, the local industry could supply the demand,” Francis told reporters at a briefing in Makati on 6 November, Wednesday last week.
“Then of course, the local industry is investing in order to follow up the increase of the demand, and it’s the essence of the safeguard… the main philosophy behind this is that the local industry needs to continue to invest and to modernize the plant in order to be in the position to fulfill the domestic demands,” he added.
Francis is referring to the final general safeguard measure of P10 per 40-kilogram bag of imported cement imposed by the Department of Trade and Industry after proving that the surge of cement imports has threatened the local cement-making industry.
The duty is seen lessening the country’s dependence on cement imports, which were priced lower than domestic cement, while also pushing for manufacturers to ramp up volume capacity to address increasing demand.
Francis said Republic Cement alone has a capacity of around 7.5 million metric tons, which he said the company “will increase by close to 25 percent by next year.” Republic Cement has revamped five out of its six cement plants across the country and has spent a “significant amount” to optimize its production.
Aboitiz Equity Ventures chief financial officer Manuel Lozano previously said Republic Cement will add a net of 1.3 million metric tons after it concludes its debottlenecking activities in the first quarter of 2020, after which the company can start considering building additional production lines. The debottlenecking started in 2017 with an investment of about $250 million to $300 million.