Cement makers caution on rising production costs

Santo Domingo.- The cement-making process is among the most expensive and difficult manufacturing activity, as from the quarry where the raw material is extracted until bagging is long and uninterrupted, 24 hours per day year-round.

The cement makers grouped in Adocem said the costs of consumables to make that product have more than doubled lately, mainly in aspects like electrical energy, fuels and local transport, which represent around a 60% of the total cost to produce on bag of cement.

Just the fuel for the furnace (coke) has tripled in price from US$40 per ton to US$140, which is what the cement makers must pay for that fuel.

Meanwhile demand for the product has been falling around 24% in a nearly uninterrupted manner compared with 2006, when 3.7 million tons were marketed, for which the industry estimates it would be slightly more than 2.8 million tons for yearend 2011.

ADOCEM president Osvaldo Oller said the country consumed around 1.8 million tons of cement to August. “Despite these conditions this hasn’t meant changes neither in the numerous investments which this productive process requires, in the accumulation of costs of the different consumables, nor a reduction of the funds that our industry invests within the national industrial sector.”

According to Adocem the cement makers have been exploring all possible measures to cut costs and remain competitive regarding the perspective of production costs continuing to increase.

In a statement, ADOCEM said as in other countries, Dominican Republic’s cement industry is intensive in capital and with a business structure of high dimensions to deal with the strong investments required to install and put into operation a cement factory. “ADOCEM is the organization which represents the cement producing sector in the country in a manner such that it becomes the facilitator for sustained development of construction, motoring the general interests for this productive activity.”