Cemex turns to small-scale quarry as production costs rise

THE Apo Land and Quarry Corp. (ALQC) and its partner, Cemex Philippines, anticipate more problems with production if the suspension of their quarry operations in the City of Naga will not be lifted within the year.

Officials of the cement manufacturing and mining firm hope that ALQC can continue quarrying for raw materials in Naga soon.

Though Cemex continues to manufacture cement in the city, Chito Maniago, ALQC and Cemex Philippines spokesperson, said they now rely heavily on sources outside the City of Naga.

Maniago said raw materials are now sourced from small scale mining firms particularly from Bohol and other parts of Cebu.

“We really need to explore other suppliers. Before, we don’t really tap these suppliers (small scale miners). Now, we try to reach out to them. But we are choosing them on the consideration that they are legal, espousing sustainable operations and they are compliant with government policies,” Maniago said.

Before the September 20, 2018 landslide, Maniago said Cemex sourced 90 to 100 percent of their raw materials from ALQC’s quarry site in Naga.

He said Cemex was able to cover losses as a result of higher production cost since ALQC’s operation was suspended, but they expect problems to arise next year if the Department of Environment and Natural Resources (DENR) does not lift the suspension.

In a disclosure to the Philippine Stock Exchange this month, Cemex Holdings Philippines (CHP) said its financial performance was affected following the landslide in Barangay Tina-an.

Officials from CHP said its earnings before interest, tax, depreciation and amortization for the fourth quarter of 2018 dropped to seven percent from 12 percent after its mining and quarrying operations in the City of Naga were suspended.

Because of the suspension, Apo Cement had to get materials from farther sources, leading to an increase in cost of sales.

Cemex and ALQC are complying with the National Government's order for them to remove hazardous materials within the landslide area in Barangay Tina-an.

As of Thursday, Feb. 21, the two firms have spent some P50 million for hazard reduction activities in Tina-an and the construction of a retaining wall within the affected landslide areas.

Maniago assured they are compliant with the requirements of DENR to conduct the clearing in a safe manner, and have tapped experts from the Cemex headquarters in Mexico for it.


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