Following its exit from China last year, Taiheiyo Cement is ramping up production in Southeast Asia to boost export sales to the United States by up to 1 million tonnes of cement annually, according to the Japanese cement giant.
The company’s Philippines unit recently inaugurated a new $222.5 million production facility in the central province of Cebu and expanded export storage at its Indonesian plant. Additionally, Taiheiyo plans to build a pier in Indonesia to support the efficient loading of cement onto export ships.
The Indonesian facility is expected to serve as a key export hub for both the United States and Oceania, while the upgraded Cebu plant will allow Taiheiyo to produce up to 3 million tonnes of cement annually.
Exports to the U.S. are currently very strong. In a sense, we are putting all our eggs in one basket. Nevertheless, we are increasing the export destinations by assessing the market environment.
Shinji Fukami, Senior General Manager of the International Business Division at Taiheiyo Cement
As part of its aggressive regional expansion, Taiheiyo is also strengthening its position in the Philippines and is targeting a market share of over 10%. To support this goal, the company is building a new terminal for shipment in the capital Manila, also the country’s largest local market for cement.
Taiheiyo’s shift towards the United States and Southeast Asia comes in response to declining demand in China, where the company saw a drop of 1.41 million tonnes between 2017 and 2021. Its exit from China was driven by a slowing economy and stringent environmental regulations, particularly regarding the mining of limestone, a key component of cement.
The business environment in Japan has also been challenging for Taiheiyo. According to the Japan Cement Association, domestic cement demand has been shrinking for the past five years. In 2023, demand was 34 million tonnes, or 7% lower than in 2022.
The decline in demand is expected to continue due to labor shortages, rising raw material costs, and inflated transportation expenses, all of which are slowing construction projects and increasing project timelines.
In response to these hurdles, many Japanese companies, including Taiheiyo, are diversifying into international markets to mitigate risks.
“Exports to the U.S. are currently very strong. In a sense, we are putting all our eggs in one basket. Nevertheless, we are increasing the export destinations by assessing the market environment,” said Shinji Fukami, senior general manager of the international business division.
Teiheiyo Cement isn’t the only player seeking growth abroad. Competitors like Sumitomo Osaka Cement are expanding in Australia through a partnership with a local firm to open a cement terminal. Meanwhile, Mitsubishi UBE Cement has launched several production facilities in the United States over the past few years.
