DMCI Holdings recently announced that its cement subsidiary, Concreat Holdings Philippines Inc. (Formerly Cemex Philippines Holdings), has officially launched a phased price increase mechanism to cope with rising fuel cost pressures. Herbert Kang Songji, executive vice president and chief financial officer of the company, said that the price adjustment was not a simple one-time price increase, but a direct linkage mechanism with the fluctuation of energy prices. The fuel surcharge was listed separately through the "split pricing" model, which not only ensured the transparency of cost transmission, but also reserved flexibility for the cancellation of the surcharge when fuel prices fell in the future.
The specific implementation plan has been clearly divided into three steps. The first round of price adjustment was launched on March 15, with an increase of 10 pesos per bag of cement; the second round was implemented at the end of March, with an increase of 10 pesos; the third round is expected to be implemented on April 6 or the first week, with an increase of 10 pesos. The cumulative increase in the three rounds is about 30 pesos per bag. Kang Songji stressed that this "ladder transfer" mechanism means that for every 2 pesos increase in fuel costs, the price of cement will rise by 1 peso, which fully reflects the core cost position of fuel in cement production and logistics. The impact of
fuel cost on cement business is reflected in the two dimensions of production and transportation. On the production side, the "calcination" process of cement kilns consumes a lot of energy; on the logistics side, truck distribution relies on gasoline, and oil price fluctuations directly erode profit margins. The uncertainty created by the current global fuel price increases and supply tensions, particularly the conflict in the Middle East, has forced DMCI to recalibrate its operational strategy. Despite the cost pressure, Kang Songji made it clear that even if he had the money to buy fuel, he also faced the challenge of supply availability, which was a more serious problem than price.
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