Philippine cement firms slowing down operations

Philippine cement business slowdown due to the global financial crisis and the expected adverse impact of the recent removal of the tariff on cement have prompted local cement firms to rethink expansion and investment plans, and implement downsizing of their workforce.

An industry source who requested anonymity said one of the big three cement firms operating in the country had already laid off 45 employees in its Mindanao operation and 20 others in its Luzon plant. This company, the same source said, is also shutting down for six months one of its plants in Luzon.

He said local cement companies were having difficulties due to a drastic slowdown in demand and the unfair competition posed by imported cement that were being brought into the country without tariff.

Cemex Philippines was also reported to have reduced its workforce by three percent last month to cope with a depressed market. The firm is also shutting down kiln operations in its plants in Antipolo City and Naga, Cebu, until market conditions improve. Reports say, however, that the supply of cement will not be disrupted as both plants keep sufficient inventory levels, and kiln operations will restart once inventories are depleted.

In a related development, the Cement Manufacturers Association of the Philippines said in a report that while construction activities increased last year, cement firms expect uncertain growth of 2009 sales as the financial crisis hits the construction industry. This situation is made worse by the adverse effects of the removal of cement import tariffs.