Cement Demand Expected to Rise Next Year
With infrastructure-building activities picking up pace now in spite of the pandemic, Philippine demand for cement is seen to rise next year, similar to how it performed in 2019.
According to Nabil Francis, president and chief executive officer of Republic Cement & Building Materials, a joint venture between Aboitiz Equity Ventures (AEV) and CRH plc. “When it comes to market demand, our forecast is that in 2021 we will get back to 35 million tons for the Philippine market, which is more or less the level in 2019.”
He said that this year, however, he expected local cement demand to contract by 15 per cent, as opposed to a 9-per cent growth before the pandemic hit. While COVID has pushed back the industry for three years, Francis sees the cement industry being pushed back for a year, saying that there might be a V-shaped recovery.
In the third quarter, he noted that the industry was already starting to rebound with an estimate of a 7-per cent year-on-year growth after builders replenished their cement stocks. In the case of Republic Cement, he said that all of his six plans are already running but with the standard safety protocols.
Francis that the next year’s demand on infrastructure would be bullish while other sectors such as the individual house-building may lag.
In the first nine months of 2019, Republic Cement had an income of P 400 million to AEV, which is 37 per cent lower year-on-year as COVID-19 dramatically put a halt to construction activities, especially during the quarantine measures.
He said that their company was just commissioning new equipment when the pandemic hit but is positive that its production will grow to close to 9.7 million tons due also to the government’s Build-Build-Build program. He added, though, that local cement was threatened by imported cement.
Francis said, “Our vision remains intact for the future: to be the best-managed company of the industry and ramp up new equipment. We are remaining optimistic for next year.”