Holcim Philippines, one of the country’s leading cement producers, has notified for a P5 to P8 price increase per bag of cement in Metro Manila and south Luzon effective June 21 this year due to high cost of power in Mindanao and fuel cost but the Department of Trade and Industry (DTI) sees no reason for the price hike.

Eduardo Sahagun, Senior Vice President for Sales, Marketing, Distribution and Technical Services, said its suggested retail prices of cement in Metro Manila and south Luzon by June 21 would be P217 per 40-kilogram bag. Prevailing retail cement prices range from P213 to P216 per bag.

Sahagun said that power cost in Mindanao has increased by 42 percent due to the power problem in the area while fuel cost has gone up by 20 percent since January this year.

The price adjustment is to recover general inflationary increases of cost inputs plus higher logistics cost to augment supply in the said areas.

Earlier, the DTI has granted the request of Republic Cement (Lafarge Cement) for price adjustment because of the higher cost to produce cement from its Mindanao plants.

Holcim operates in 4 major plants – one in La Union, another in Bulacan, a third in Davao City and the Lugait Plant in Misamis Oriental.

The plants account for a total installed clinker production capacity per year of 7.2 million metric tons and annual cement production capacity of 8.7 million metric tons.

Sahagun said that DTI is going to give its feedback in two weeks, but said they really do not need the blessing from the DTI for its decision to raise prices as long as they have properly informed or notified DTI of its decision.

Sahagun said this is the first time in 20 months that they raised prices in Metro Manila and south Luzon and perhaps, the only this year. The company though had increased prices of cement for Mindanao early this year.

Sahagun further said that cement demand in the past five months this year has increased 14 percent and the growth is expected to be sustained even if the peak of the construction season is already ever.

DTI undersecretary for consumer welfare Zenaida C. Maglaya said that one of the factors that may affect its decision to grant the request of Holcim for price adjustment is that construction activities are going to taper off with the onset of the rainy season.