By IRMA ISIP

The entry of the world’s cement giants consolidated the industry a couple of years ago.

This time, the government dismayed by high cement prices, is encouraging new entrants.

An association of 10 cement companies from China is being encouraged to invest at least $400 million in at least two cement ventures, one of which is a possible partnership with businessman Ramon Ang, a close associate of tycoon Eduardo Cojuangco Jr., according to Francis Chua, special envoy for trade and investments.

At the same time, a government source said Eagle Cement Corp. which is believed to be owned by Cojuangco, is at the height of the construction of its P6.731-billion 1.88 million metric ton (25-million bags) per year Portland cement factory in San Ildefonso, Bulacan.

Chua said a delegation of 25 officials from the Long Dongyan Cement Association recently met with Trade Secretary Peter B. Favila discussing setting up of two plants with combined capacity of 3 million metric tons (MT) annually.

Chua said Favila supports the competition to be offered by the new capacities as this would bring down the prices of cement.

Chua said the price of cement in that region in China is just half the price of the cement sold here.

But Chua said Favila rejected a proposal by these firms to first engage in trading here to test the market, saying it would pose unfair competitor to local producers.

Chua said the association would put up at least two factories as a group either as stand-alone or with a local partner.

He said one facility is estimated to cost about $200 million.

Chua said the partnership with Ang is eyeing a site either in Bulacan or Batangas.

He added that the group is also talking with businessman Donald Dee, who owns a quarrying business in Montalban, Rizal for a separate factory.

Chua said the group is also eyeing export to Asian markets from the Philippine operations.

"The delegation was here to assess the situation. They met with Secretary Favila and asked a lot of questions, including incentives. They also have concerns on how they will stand against the big three cement companies operating here," Chua said, referring to global cement giants Holcim, Lafarge and Cemex.

The association produces 30 million metric ton annually of cement in Dongyan.

The visit serves as a follow-up of the officials’ discussions with the Philippine government last August when they met with President Arroyo during her visit to China.

President Arroyo is poised to return to China on October 23 to visit the cities of Wuhan, Hangzhou and Beijing.

According to a government source, Eagle Cement’s importation activities for machinery and equipment for its plant are proceeding smoothly.

The brand new plant is expected to commence operation in August 2009.