Cement History

1957 to 1971: Cementing the Foundations

In the aftermath of World War II, a steady influx of cement manufacturing firms addressed the sudden increase in demand for the basic construction material needed in rebuilding Manila and the rest of the Philippines.

As the Japanese government started issuing war reparations in kind – many of which were equipment for cement production – the country saw the emergence of several plants that would usher in the establishment of the Philippine cement industry.

Known Filipino industrialists naturally invested in the capital-intensive business of cement manufacture. Many of them – the Madrigals, Montinolas, Alcantaras and Aranetas – succeeded in their ventures and further boosted their stock as among the Philippines’ economically powerful.

First privatization

Paving the way for these investments was a policy enunciated in 1956 by President Ramon Magsaysay, which called for the privatization of government-owned and operated industries to make them more efficient and responsive to the needs of the times.

Around that time, the second plant put up by the government-controlled CEPOC (later to be known as Apo Cement) was put on the auction block after almost three years of continuously losing money.

Immediately taking notice of the government offering was a group of industrialists newly organized at the time into an outfit called Philippine Investments Management Consultants, Inc. (PHINMA). It was organized by Filemon C. Rodriguez (chairman), Ramon V. del Rosario Sr. (president) and Ernesto O. Escaler as one of the incorporators.

Not long after, PHINMA – whose formation was inspired by del Rosario’s vision of an industrialized Philippines – was soon able to bag its first business project: the Bacnotan plant. In January 1957, the group posted a bid and won over La Suerte Tobacco Corp. and the Maglaya-Chan family, who were the biggest tobacco merchants in La Union. It marked the first privatization ever in the Philippines.

When the PHINMA group took over on May 11, 1957, they renamed the company to Bacnotan Cement Industries, Inc. (BCI). [Much later, in 1993, it was renamed again to Bacnotan Cement Corp. or BCC because of additional stockholders]

A book entitled “Ramon V. del Rosario: The Making of an Entrepreneur” recalls that a team of PHINMA consultants, many of whom were eager to apply what they learned in graduate school, had earlier concluded that the Bacnotan plant could be operated profitably – noting a growing market in central and northern Luzon. The team strongly recommended better controls on purchase of fuel, raw materials and spare parts and to keep accounts receivables to a minimum.

Del Rosario – whose business acumen and innovation shone during “the golden age of Philippine manufacturing” in the ‘50s – remembers Escaler was helpful in inviting the Jesuits, who subsequently put up capital for Bacnotan Cement. Escaler was an Ateneo law graduate and scion of the landed Escaler family of Pampanga,

During the initial years, the PHINMA group introduced extensive improvements to increase plant production and operating efficiency. Years later, the Bacnotan plant shifted from the traditional wet process to coal-firing as a fuel economy measure – a first in the industry.

Also in 1957, Don Aurelio Montinola Sr. – a former finance secretary – established Republic Cement at a time when the only other cement plant in Luzon apart from the one in Bacnotan was Rizal Cement. Republic operated with an initial capacity of three million bags per year, which it expanded later due to higher demand for cement.

Tracing the post-war years, Magdaleno Albarracin – currently the vice chairman of PHINMA – noted at least three cement plants that were put up with the help of Japanese war reparations. One was Filipinas Cement, which was organized by contractors in cooperation with the government. The other two were Universal Cement – put up in Cebu by the Durano family – and Luzon Cement, which was renamed later to Central Cement and became part of PHINMA’s Luzon group.

Cement institute

With more cement companies in the fold, the industry was ready to take on a more active role in the country’s economic development as an organized force. At the initiative of Don Aurelio Montinola, the Cement Institute of the Philippines was organized in 1957.

The six initial members of the institute were –

  • Cebu Portland Cement Corp. – government-owned and headed by general manager Eduardo Taylor
  • Rizal Cement Corp. – owned by the Madrigals
  • Bacnotan Cement Corp. – owned by PHINMA
  • Republic Cement Corp. – owned by the Montinolas
  • Panay Cement Corp. – formerly Philippine Portland Cement and owned by the Lopezes
  • Universal Cement Corp. – owned by the Duranos

The initial incorporators were Aurelio Montinola and Gerard Wilkinson (Republic), Ramon del Rosario (Bacnotan), Simon Paterno (Rizal), Eduardo Taylor (CEPOC). Taylor was also an adviser to Republic Cement. The first executive director of the cement institute was Eduardo Romualdez Jr., whose father chaired the Development Bank of the Philippines at the time.

Recognized by the government for its importance in pushing the economy forward, the cement institute sought to harness the industry’s resources in joint undertakings that would enhance collective growth and boost the industry’s share in the nation’s recovery from the ravages of war.

Among the notable projects built of cement during the reconstruction period, the most massive was Ambuklao Dam which – as Ramon del Rosario recounts – was publicized as the biggest earth moving job in Asia.

More cement plants

The apparent profitability of the cement plants inspired other investors to sink their money in the business. As both del Rosario and Albarracin noted, more cement companies were put up in the 1960s out of “gaya-gaya” (follow the leader) system. Because the industry was making money, more people simply wanted to go into it and make money themselves.

Between 1960 and 1968, new plants were set up and existing plants went into expansion. In 1963, Universal boosted its capacity to three million bags a year while Filipinas Cement in Tanay, Rizal increased from three million in 1964 to 14.4 million in 1967.

In 1965, Mindanao Cement established its plant in Iligan. Two years later, in 1967, Marinduque Mining and Industrial Corp. (Island Cement) put up its plant in Antipolo, Rizal while Pacific Cement set up its own in Surigao del Norte.

Also in 1965, the Cement Institute of the Philippines changed its name to Cement Association of the Philippines while retaining its mission and vision.

In 1968, three more cement plants went on stream – Hi-Cement in Norzagaray, Bulacan; Luzon Cement in Ildefonso, Bulacan; and Bacnotan Cement opened another plant in Davao.

Even the Lirag family – who were already well known in the textile industry – also got into cement manufacturing with a plant in Tanay, Rizal called Midland Cement (later to be known as Titan Cement).

New architectural styles

The availability of cement somehow redefined architecture in the Philippines. Architects suddenly found an opportunity to highlight their design skills, using cement in building residential and other projects in lieu of the more traditional lumber.

It was a period of design creativity for Filipino architects who slowly graduated to cement-based architecture and drew the best out of contemporary architectural movements such as art deco. Many of the middle-class aspired to build their American-inspired bungalow, using more cement than wood in erecting it.

In the 1960s, lumber was still popular and very much in demand especially in Japan which imported bulk of its lumber from the Philippines. The subsequent increase in price and the dwindling supply of lumber made cement a popular and practical substitute.

In the field of institutional buildings, a young architect named Leandro Locsin (later to be proclaimed National Artist) used cement to build the dome structure of the Chapel (now Church) of the Holy Sacrifice at the University of the Philippines in Diliman.

The design and construction of the hemispherical place of worship was a groundbreaking collaboration with other artists and highlighted the many possibilities of concrete construction.

Following these developments, cement became the 10th biggest industry in the Philippines.

Oversupply, price controls

With the sudden influx of cement companies, the market was faced with an oversupply of cement. As a result, cement prices went down. In 1968, Albarracin recalls, a bag of cement at P1.70 was less expensive than a pack of imported cigarettes.

In 1969, production excess was about 1.2 million bags. Some estimates put the inventory of cement and clinker in various cement plants throughout the country at four million bags. Such figures indicated that the industry grew too big for its own good.

Many cement plants nearly closed down because of the excessive competition. They were saved at the last minute by price regulations. But this government ploy merely delayed the exit of uncompetitive firms.

For PHINMA and the few eventual survivors, it was a combination of good fortune and business agility that saw them through. Del Rosario – who later became ambassador to Canada, Germany and Japan – described the situation as “matira ang matibay” or survival of the fittest.

“Maybe it was good luck or we were, at the time, relying on steel roofing as a sideline which served as our safety belt and the one that lifted Bacnotan up ahead of its competitors who did not have any sideline business,” he said.

Despite these developments, six more cement plants started operations in various parts of the country – Northern Cement (1968), Alsons (1968), Fortune Cement (1970), Iligan Cement (1970), Floro Cement (1971) and Continental Cement (1971).

At the close of the decade, several cement plants were either shutting down operations or about to fold up as a result of overcrowding in an industry that was barely settling down in the complex process of economic development and nation-building. <back to top of first page>

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