The Trade Department said it supports the recent acquisition of assets of Holcim Philippines by San Miguel Corp. as it will lead to stronger local cement production.
Holcim recently divested all of its Southeast Asia assets in Malaysia, Singapore, Indonesia and the Philippines as a part of its Strategy 2022 to “deleverage and strengthen its balance sheet” after the global cement company cited Southeast Asia as a hyper-competitive region.
Trade Secretary and Board of Investments chairman Ramon Lopez said that “such development is good for the industry since the exit of Holcim did not lead to a closure of a cement plant, but rather a continuation of operation by another company.”
“This is important as we do not want a reduction in the domestic capacity of any industry. Especially for a critical industry such as cement, we even want greater domestic capacities so that we can grow the supply together with the robust growth in demand brought about mainly by our fast-growing economy and the government’s aggressive program on infrastructure development ‘Build, Build, Build’,” Lopez said.
San Miguel is known in the industry as a price player or one whose brands have relatively lower price points. The purchase of Holcim’s production assets can provide a further push for lower cement where consumers can expect more competitive pricing in the industry, Lopez said.
The Trade Department identified cement production as a priority area for industrial promotion involving a comprehensive approach that included listing investments in modern, integrated cement plants as part of the current 2017-2019 Investment Priorities Plan.
The department early this year imposed a temporary safeguard measure amounting to P210 per metric ton or P8.40 percent bag on imported cement”•equivalent to a duty of about 4 percent.
Trade Undersecretary and BoI managing head Ceferino Rodolfo said the measure was in response to a surge in cement imports by non-manufacturers, from only about 3,500 metric tons in 2013 reaching over 3 million MT in 2017. The Tariff Commission is currently conducting public hearings for the final determination of the safeguard measure.