The Philippines welcomed a new cement producer to its market this week as Century Peak Cement Manufacturing Corp (CPCMC), a subsidiary of Century Peak Holdings Corp, received a licence to sell cement in the archipelago of Visayas. The new player's entry comes just as the government's affordable housing programme and road transport projects are expected to increase cement demand.

The new PHP10.9bn (US$198.8m) Pinamungajan cement plant in Cebu has 1Mta cement capacity. The factory is situated 2km from Century Peak Mineral Development Corp's quarry site, which will supply the plant with limestone. The first kiln firing took place on 1 October 2022. CPCMC will produce cement under the Pro (blended hydraulic cement) and Prime (OPC) brands.

In terms of markets, the company has targeted cement distribution in central Visayas (Cebu, Bohol, Negros Oriental and Siquijor) and parts of Mindanao. "We are looking at the markets where we can make an impact and the Visayas region, particularly in Cebu, Palawan, Mindoro, Bohol and Dumaguete, are included in our initial phase of distribution," said CPCMC Vice President for Finance, Katrina Keng.

"With our own pier located near the plant, we can easily transport our cement products throughout the country in a more cost-efficient manner.

"We are also targeting underserved localities that may not have much option in terms of cement brands and, by doing so, create for consumers a choice," she added.

Cebu's production base
Competing brands located in Cebu include Mabuhay Filcement Inc, which operates one of the San Fernando production units, CEMEX Philippines' Apo Cement Co, which owns the Naga cement plant, and the CRH-owned Republic Cement & Building Materials' works in Danao city.

Imminent arrival of new production 
There is a small window of opportunity for CPCMC to establish a foothold in the Cebu market before South Western Cement Corp (SWCC) begins its operations later this year. SWCC (Eagle Cement Corp) is a 2Mta greenfield plant, representing an investment of PHP12.5bn. The integrated facility will be located in Malabuyoc, in the south of Visayas. In addition to a 5500tpd kiln, the plant will be equipped with a 450tph vertical roller mill (VRM) for raw material grinding and a 36-45tph coal mill. Cement grinding will be performed by two 175tph VRMs. Commercial operation is scheduled to begin in the summer of 2023.

A further new kiln line is Taiheiyo Cement Corp's (TCC) brownfield San Fernando project. The PHP15bn investment will establish a 3Mta integrated cement plant, 38km south of Cebu. The project is scheduled to be completed in April 2024. TCC's Vice President, Yuichi Kitbayashi, said the company aims to expand the plant to reach 5Mta production when the market is ready and achieve a market share of 10 per cent.

New plant activity has been encouraged by the Philippines Board of Investments (BOI), which in 2019 anticipated domestic cement demand to reach 40Mt in 2020, while local cement capacity was reported at 34.5Mta by the Cement Manufacturers'  Association of the Philippines (CEMAP). Capex projects have been stimulated by the government's 'Build, Build, Build' infrastructure programme and the post-pandemic construction recovery plans. 

Better equipped to meet local cement demand
The new capacity coming on-stream this year is expected to put downward pressure on cement prices and is likely to affect imports, although the Philippines' Department of Trade and Industry (DTI) has already imposed duties on Vietnamese cement imports since 16 December 2022. The Tariff Commission reported that 3.5Mt of cement imports were received by the Philippines in the 1H22. As local production ramps up, the Philippine cement producers will be in a better position to meet domestic cement demand and cement supply will be more sustainable with lower transportation costs.