A cement company which has expanded its production capacity in Mindanao is projecting that the demand of the island will eventually equal or even surpass the demand of the Visayas.
According William C. Sumalinog, Holcim Philippines senior vice president for sales, at present, Luzon is about 65% of the total market demand while the Visayas and Mindanao divide the remainder although the Visayas, before President Rodrigo R. Duterte took over the presidency, was the bigger market.
However, Sumalinog said during the weekly Wednesdays@ Habi at Kape – Abreeza that between 2017 and 2018, Mindanao’s market share was higher than that of the Visayas. This year, however, Mindanao will have a slowdown because of the delay in the approval of the national budget which would also result in the delay of government infrastructure spending.
Although the growth in Mindanao has also been attributed mainly to private construction, Sumalinog believes government sending will eventually result in higher demand as projects in both the primary and secondary cities are expected to take off.
Based on the report of the Philippine Statistics Authority, construction growth in the four regions in Mindanao between 2017 and 2018 was up at 18.1% for Davao Region, 16.4% for what used to be the Autonomous Region in Muslim Mindanao, 16.3% in Northern Mindanao and 13.6% in the South and North Cotabato-Sultan Kudarat-Sarangani-General Santos City. The national performance during the period was at 14.9%.
The Mindanao construction industry is also expected to be boosted by government spending as the national government alone has allocated between 2017-2022 P761 billion for infrastructure, said Assistant Secretary Romeo Montenegro, deputy executive director of the Mindanao Economic Development Authority.
The figure, Montenegro explained, was lower than the P1.047 trillion for Luzon, but was much higher than the P292 billion for the Visayas. “With these figures alone, we can expect the extent of the market share (in cement demand) of Mindanao vis-à-vis Visayas by public spending alone,” he added.
Sumalinog said the rule of thumb is that between 10-12% of the cost of construction goes to cement, or out of the government budget for Mindanao infrastructure during the period, the cement industry will get about P80 billion.
Because of the confidence of the company on the growth of Mindanao construction, it has expanded both its plant here and in Lugait, Misamis Oriental.
Its expanded plant here has started operating, while expansion works for the other plant will start next year and is set to be completed by 2022.
Because of the expansion, the plant here has now a production capacity of 2.4 million metric tons annually from 1.5 million metric tons.
“This is because of the commitment of the company on how support the industry to the growth and development in Mindanao,” Sumalinog said. With CQF