CEMENT INDUSTRY PROFILE

(As of 24 March 2011)

I. Coverage/Features

The cement sector covers the manufacture of clinker, portland cement, pozzolan cement
and other types of cement. Portland cement is a mixture of around 96% clinker and 4%
gypsum, while pozzolan cement is a mixture of around 77% clinker, 3% gypsum and 20%
pozzolan.

The demand for portland is about 73% while pozzolan is around 27%. Other types of
cement, e.g., hydraulic cement are produced per specification of customer. Pozzolan,
although cheaper than portland and has been in the market since the early eighties, has not
gained significant popularity to be considered as a substitute product for portland. This may
be attributed to the fact that compared to portland, pozzolan has a lower compressive
strength as specified by the Philippine Standard (Table 1):

Table 1. Compressive Strengths of Cement

PNS STANDARD
Type of Cement Strength (Kg./sq. cm.) Curing Time (Days)
Portland (Type I) 281 28
Pozzolan (Type P) 211 28

II. Current Status

A. Cement Industry Players

To date, there are currently 17 cement manufacturing plants operating in the country, 10 of
which are located in Luzon, 3 are in Visayas and 4 are in Mindanao. The Cement
Manufacturers Association of the Philippines (CEMAP), Inc, represents cement producers in
the Philippines. The following are the existing manufacturers of cement in the country:

1. Holcim Philippines, Inc. (4)

2. Lafarge Cement Services Phils. Companies (6)
3. Cemex Companies (2)
4. Northern Cement Corporation
5. Goodfound Cement Corporation
6. Pacific Cement Phils., Inc.
7. Taiheiyo Cement Phils., Inc.
8. Eagle Cement

Prepared by: Other Industries Division – Special Programs Department 1

B. Location of Existing Cement Plants

Figure 1 shows the location of the existing cement plants in the country.

Figure 1. Location of Existing Cement Plants

Prepared by: Other Industries Division – Special Programs Department 2

III. Industry Performance

A. Demand Supply Forecast

The demand forecast as shown in Table 2 is projected by the average of 12% growth rate of
construction industry per Medium-Term Philippine Development Plan (MTPDP) 2004 – 2010
based on the actual demand (consumption) of 14.5 million MT or 362 million bags of cement
by the end of 2009.

The supply forecast on the other hand, is based on the total kiln capacity of 19.8 million MT
or 495 million bags as of 2009.

Table 2. Supply – Demand Forecast (2009-2015)

Supply Demand* Surplus (Deficit)

In million MT
2009 19.8** 14.5 5.3
2010 19.8 16.2 3.6
2011*** 21.2 18.1 3.1
2012 21.2 20.3 0.9
2013 21.2 22.8 (1.6)
2014 21.2 25.5 (4.3)
2015 21.2 28.5 (7.3)
Note:
*Demand is projected by average of 12% growth rate of construction industry per MTPDP 2004-2010
** Based on Cement Industry Kiln Capacity 19.8 million MT as of 2009
***In 2010, Eagle Cement Corp. commenced operation thus adding 27 million bags of supply in 2011 based on its
registered capacity.

B. Production Share of Cement Firms

Based on the 2010 operating capacities of the cement industry, Lafarge contributes 38% to
the total production of the cement industry followed by Holcim with 25%.

Figure 2. Production Share in Cement Industry

Prepared by: Other Industries Division – Special Programs Department 3

 C. Cement Production and Sales

The cement industry’s installed clinker capacity is pegged at 20,747,000 MT as of January

2010. However, only 59.20% of said capacity is being utilized for market demand based on
the data/information submitted by CeMAP. Table 3 and figure 3 show that domestic
production of cement products has variably increased annually, reaching its peak in 2009
with 14,865,000 MT. Domestic sales at 14,271,355MT and total demand at 14,469,000 MT
also reached their highest in 2009. The export and import performance, on the other hand,
experienced an all-time low during the same year with 196,645 MT and 1,000 MT,
respectively.

Table 3. Philippine Cement Production and Sales (in MT)

SALES TOTAL TOTAL %

YEAR PRODUCTION IMPORTS
Domestic Exports SALES DEMAND Change
2001 11,378,329 9,481,246 1,863,986 11,345,232 2,233,180 11,714,426 -2.80%
2002 13,396,618 12,263,386 1,034,641 13,298,027 337,600 12,600,986 7.60%
2003 13,066,831 12,109,992 980,433 13,090,425 9,700 12,119,692 -3.80%
2004 13,056,920 12,171,208 819,574 12,990,782 12,705 12,183,913 0.50%
2005 12,367,614 11,468,626 1,053,984 12,522,610 116,302 11,584,928 -4.90%
2006 12,070,822 11,470,291 724,551 12,194,842 243,695 11,713,986 1.10%
2007 13,047,583 12,709,330 356,571 13,065,901 302,003 13,011,333 11.10%
2008 13,369,261 13,103,715 1,570,312 14,674,027 113,301 13,217,016 1.60%
2009 14,865,000 14,271,355 196,645 14,468,000 1,000 14,469,000 9.50%
Source: Cement Manufacturers Association of the Philippines (CEMAP), Inc.

The following graph shows the volume of production of cement from 2001 to 2009.

Figure 3. Production of Cement from 2000 to 2009

(in '000 MT)
Thousand MT
16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0
2001 2002 2003 2004 2005 2006 2007 2008 2009
Year

Prepared by: Other Industries Division – Special Programs Department 4

D. Industry Performance

Tables 4 and 5 show the exportation and importation of clinker and cement products from
2008 to 2010 based on the data provided by the National Statistics Office (NSO).

In 2010, cement clinker (HS Code 2523.10.90) comprises 45% of the total value of clinker
and cement product export of the country as shown in table 4.

Table 4. Exports of Cement Clinker and Various Types of Cement (2008 to 2010)

Year Volume (in MT) FOB Value (in US$)

2008 767,218 33,378,628
2009 310,083 13,150,444
2010 375,215 13,359,092
Source: National Statistics Office (NSO)

Table 5 shows that the volume and value of imported clinker and cement products in 2010
increased by 240% from 2009. Cement clinker comprises 64% of the total value of
importation followed by portland cement with 16%. The remaining 20% includes white
cement, coloured cement, aluminous cement, other hydraulic cement and clinker used in the
manufacture of white cement.

Table 5. Imports of Cement Clinker and Various Types of Cement (2008 to 2010)

Year Volume (in MT) FOB Value (in US$)

2008 48,523 3,678,526
2009 69,645 5,527,673
2010 236,678 17,920,866
Source: National Statistics Office (NSO)

III. Competitive Advantage

A. Raw Materials

The Philippines has an abundant supply of cement raw materials such as limestone,
shale/sandstone, siliceous sand, lime, diorite, calcite, and probably gypsum. The availability
of limestone for cement production, per record of the Mines and Geosciences Bureau
(MGB) is estimated in 1992 at around 4 billion metric tons (Table 6). The expected life is
around 260 years.
Table 6. Limestone Deposits in the Philippines
(For the Cement Industry)

Estimated Deposit Estimated Deposit

Region Region
(Million MT) (Million MT)
I 1,082 VI 80
II 21 VII 529
III 333 X 81
IV 499 XI 56
V 688 XII 507
TOTAL 3,876

Prepared by: Other Industries Division – Special Programs Department 5

B. Preferred Location

The sites of existing and proposed cement plants are Regions 1, 3, 4, 5, 6, 7, 8, 9, 10, 11,
and 12. The project must locate in an area where there is available power, and accessibility
to the source of raw materials and port facility. The abundance of raw materials, availability
of skilled manpower and the existence of a growing domestic market make the Philippines a
suitable site to base a cement manufacturing operation.

Contact Details

Board of Investments (BOI)

Address: 2F 385 Sen. Gil Puyat Avenue, Makati City

Tel No.: 890-9329
Fax No.: 890-3080
Contact Persons: Rudy B. Cana, Director, Special Programs Department
Angelita F. Arcellana, Division Chief, Other Industries Division
E-Mail Address: rbcana@boi.gov.ph, afarcellana@boi.gov.ph

Cement Manufacturers Association of the Philippines (CeMAP)

Address: 01 Corporal Cruz St. corner E. Rodriguez Jr. Avenue,

Bagong Ilog, Pasig City
Telefax Nos.: 671-7585, 671-7586
Contact Person: Ernesto M. Ordoñez, President
E-Mail Address: cementinfo@cemap.org.ph
Website: www.cemap.org.ph

BOI/SPD/OID

Prepared by: Other Industries Division – Special Programs Department 6