Apo Cement Corp., a subsidiary of Cemex Philippines, said Wednesday it is shutting down its Davao cement terminal and suspending indefinitely the operation of one of its two kilns in Cebu province, following the suspension of its quarrying operations.
The closure would also force the company to lay off 30 percent of its workforce and cut the services of 40 percent of its contractors.
The cement company, controlled by Mexico’s Cemex Holdings, earlier complained of high production expenses and escalating cost of raw materials that impacted on its operations despite the implementation of additional measures to look for new sources of raw materials.
Company officials said the continued suspension of the quarry operations of Apo Land & Quarry Corp., a principal raw material provider of Apo Cement, was the deciding factor for the closure of the facilities.
The Environment Department earlier suspended quarrying activities in Central Visayas after dozens of people died from a landslide in September in Naga City, Cebu where Apo Land had mining rights.
For a cement company, the kiln is the heart of cement manufacturing process because it is the main equipment used to produce clinker, the primary component for cement.
The Davao terminal holds and dispatches 25,000 bags on a daily basis. Apo Cement said that while it was committed to support the government’s massive infrastructure program, it had no choice but to also indefinitely suspend the operation of one of its kilns in Cebu.
It said it was also constrained to engage with its suppliers in Cebu and neighboring provinces and is required to take actions in order to further reduce cost and extend payment terms.
Apo Cement said with the anticipated depressed output of the plant, it would “implement a reduced workweek to decrease its fixed costs and expenses”.
This is in addition to the temporary suspensions earlier announced, affecting at least 30 percent of its workforce and reducing around 40 percent of its contractors.
Apo Cement said that to partially recover the increase in its production costs, it would implement a price increase of its cement products by P20/bag.
The company acknowledged the need to take “remedial measures to reduce the adverse impact of the current situation in this period of uncertainty brought about by the disruption in Apo Cement’s source of raw materials and to pursue the best interest of the organization’s various stakeholders.”
Technical experts from the Environment Department said in an official report on Oct. 22 that the Sept. 20 landslide in Naga, Cebu was due to natural causes and not due to quarrying.
This was the same conclusion by private geology experts from the US, Mexico, and the Philippines.
