By Jenina P. Ibañez, Reporter

The pandemic has delayed the plans of domestic cement companies to improve operations as part of their measures to compete with imports while safeguard duties are being applied.

In a public hearing held by the Tariff Commission on Friday, Cemex Holdings Philippines Enterprise Risk Manager Jose Mauro Gallardo Valdes said two out of six projects have been delayed and will be completed in 2021.

“The delays are related to the COVID-19 pandemic,” he said.

The trade department last year imposed safeguard duties on imported cement for three years to prevent injury to domestic producers. As these safeguard measures are applied, the domestic industry is required to submit to the government their plans to adjust to import competition.

Representatives from Cemex, Holcim Philippines, Taiheiyo Cement Philippines Inc., and Republic Cement Services Inc spoke at the hearing.

Zoe Verna Sibala, Vice President and Head of Strategy at Holcim Philippines, said that many of the company’s adjustment initiatives have been completed, which helped improve the company’s competitiveness.

“But if you look at the projects with the most impact in terms of improving our efficiency and productivity, these are around 30% completion and this is mainly because of the operational disruptions brought about by the pandemic,” she said.

The cement industry representatives said that their companies saw opportunity costs from projects that have not been completed because of pandemic-related delays, along with additional costs from testing and housing construction workers on-site.

Overall demand, Mr. Gallardo said, has been “impacted severely,” noting that market conditions are not ideal.

“I cannot divulge the reasons why we decided to invest in these projects given that this is part of our strategy, but what I can assure you is that without safeguards, it would be difficult for our company to implement those investments.”

Republic Cement Services Inc. Vice President of Strategy and Business Development Reinier Dizon said that the company is seeing some benefits from the initial phases of investments this year.

“But it’s such a complex year… all our Luzon plants did not operate during the (stricter lockdown) period while still incurring overhead cost and while not having the revenues,” he said.

Cement Manufacturers Association of the Philippines appealed to the Trade department to postpone the lowering of safeguard duties, which had been set to decrease each year.

The Tariff Commission during the hearing asked the companies to submit data on costs from the project delays.

“The commission is really interested regarding the cement industry’s plan to continue its adjustment plans given this COVID-19 pandemic, so we will appreciate it if you can submit to us your compliance costs, additional or relative opportunity costs for not realizing the project,” Tariff Commissioner Marissa Maricosa A. Paderon said.

San Miguel Corporation (SMC), which expressed interest in operating the country’s main gateway, has denied it wants a share of revenues generated by the Ninoy Aquino International Airport (NAIA).

SMC has submitted an unsolicited operation and maintenance proposal for the NAIA after the Manila International Airport Authority (MIAA) revoked the original proponent status given to the tandem of Megawide Construction Corp. and India-based GMR Infrastructure Ltd. (Megawide-GMR).

“Our interest in NAIA does not intend to replicate what Megawide had in mind for NAIA. Our proposal is brought on only by the need to have it running effectively and safely for the Filipino people, until our Bulacan airport project is up. And until our airport is ready, that task needs to be done,” SMC President and Chief Operating Officer Ramon S. Ang said in a press release on Friday.

All revenues, Mr. Ang said, would go to MIAA.

“Unlike all the proposals that required a share in the revenues of the NAIA -including passenger fees and lease rentals — we are not interested in the revenues. We want to improve NAIA for the passengers,” Mr. Ang added.

Mr. Ang said the company’s proposed 10-year concession will allow the government more flexibility on what it wants with the NAIA, once the Bulacan Airport is up and running.

He suggested the government will benefit more from the sale or development of the NAIA property, potentially earning as much as P2 trillion from the sale of the 646-hectare complex.

Meanwhile, Megawide said that it would still appeal for its proposal to rehabilitate NAIA after the government revoked its original proponent status.

The company in a statement said that it has complied with all requirements with the government, adding that it has submitted additional documents to prove its financial capability for the project.

SMC plans to begin construction for its Manila International Airport project in Bulacan by the first quarter of 2021. The project has an annual capacity target of 100 million travelers to help decongest NAIA. — J.P. Ibañez

SBS Philippines Corp. expects to gain over P500 million after associate Cleon Philippines Holdings Corporation (CPHC) sold an investment property.

Listed company SBS Philippines Corp., which owns 37.25% of CPCH, said in a disclosure on Friday that it expects a one-time gain for financial year 2020 after disposal of the property.

SBS is a chemical trader and distributor, offering chemical products to the food, industrial, pharmaceutical, and personal care industries.

SBS in efforts to improve its distribution capabilities in 2018 took over a warehouse facility then owned by Coca-Cola Corp. for P520 million, through its subsidiary Lence Holdings Corporation.

Lence Holdings is 65% owned by SBS, while SBS Holdings and Enterprises Corp. holds 25% and the Sytengco family controls the remaining 10%.

Cleon Phils. in 2017 acquired a Mandaluyong property for investment purposes.

Shares in SBS went up 35 centavos or 5.65% to P6.55 each on Friday. — Jenina P. Ibanez