Philippine producers seek incentives on expansion

Philippine cement manufacturers are seeking incentives with the Board of Investments for new capacity projects, as local producers seek to meet expected increases in cement demand.

The Cement Manufacturers Association of the Philippines (CeMAP) has petitioned the BOI for the inclusion of the industry in the 2013 Investment Priorities Plan (IPP) to be eligible for government perks, particularly the income tax holiday which could exempt them from paying income tax for a maximum of eight years.

'The reason the industry is seeking incentives is because we are reaching capacity and we are planning to invest in new plant because cement is critical to infrastructure projects. We are hoping that government when they look at industry they should not look at the near term but look at it long-term or 15 to 20 years because we need additional capacity to help the country in keeping with the demand of cement,' Eduardo Sahagun, CEO of Holcim Philippines Inc. told the Manilla Bulletin

“The cement industry, which had been growing at a normal rate of between 5-8 per cent annually, grew an extraordinary 18 per cent last year,' Sahagun pointed out. Such growth, he noted, was largely fuelled by private and public construction projects only.

“There was no single PPP project yet, what if these huge infrastructure projects come on stream, then there would be high growth in demand,” he said.

Sahagun, however, said that the 18 per cent growth rate incurred last year may not be sustainable at that level, but the industry is still projecting a high single-digit to low double-digit growth in the next couple of years.