Cement may retain slot in this year’s IPP

By Ayen Infante

03/24/2008

The Board of Investments (BoI) is intent on including cement projects anew under the Investment Priorities Plan (IPP) for this year to bring in new manufacturers and encourage competition that may result to cheaper cement prices in the local market.

A government source said the cement sector represented by the Cement Manufacturers of the Philippines (Cemap) has welcomed the BoI’s decision to remove the industry under the draft 2008 IPP because it discourages new players to engage in new projects due to the absence of fiscal incentives.

This means, the official said, existing players have no reason to be threatened with the possible entry of new investors, and therefore, continue to enjoy control of the market.

Cemap members include Holcim Philippines, APO Cement Corp., Continental Operating Corp., Republic Cement, Taiheiyo Cement Philippines, Iligan Cement Corp., Lloyds Richfield Industrial Corp., Mindanao Portland cement Corp., Northern Cement, Pacific Cement Philippines Inc., and Solid Cement Corp.

The BoI has yet to further study the impact of relisting the cement industry as one of the strategic industries that may be granted fiscal incentives under the IPP.

The BoI said if the move will result to lower prices of cement products in the market, the government may still grant incentives to welcome the entry of new investors.

Cement was one of the industries that was dropped in the 2008 IPP among other industries from the original listings of 11 priority sectors.

The BoI earlier reasoned out that the cement industry may no longer need subsidy from the government since any cement project could become viable without the incentives.

In 2007, cement was included for incentives but should include exploration activities.

Cement prices remained high in the local market at P175 to P180 per bag as against P110 to P115 per bag in 2004 to 2005.

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