Holcim to build new PH plant

Rappler.com

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The new $550-M plant is expected to a have a capacity of 2.5 million metric tons annually

 NEW PLANT. Holcim Philippines secures first pass approval to build a $550 million-worth plant in Bulacan from its Zurich-based parent firm, Holcim Ltd. on the back of an expected surge in cement demand. Photo provided by Holcim

MANILA, Philippines – Due to the expected surge in cement demand with the launch of Public-Private Partnership (PPP) projects, publicly listed Holcim Philippines Inc. said it will construct a $550-million plant in Bulacan. 

In a press conference on Wednesday, May 8, Holcim Philippines Ed Sahagun said they have secured first phase approval from parent company, Zurich-based Holcim Ltd., to build a new plant that will have a capacity of 2.5 million metric tons annually. 

Sahagun said a first phase approval means Holcim Philippines may obtain quotations, organize project team and proceed with securing permit requirements. The final approval may be secured by September. 

“The timing of the construction of new plant is perfect because the country is doing well in a lot of aspects,” Sahagun said. He a

Sahagun added that the recent investment grade ratings obtained by the Philippines from Fitch Ratings and Standard & Poor’s will also boost activity in the construction sector. The country’s credit rating upgrades are expected to lower interest payments on government debts. 

This will free up public funds for various infrastructure projects. The investment grade ratings that the country obtained are also expected to drive foreign investor interest in the country. 

Fitch Ratings and S&P both upgraded the country’s ratings to BBB-, the lowest wrung in investment grade credit ratings. 

Higher Q1 net income

The surge in cement demand increased Holcim Philippines’ net income after tax by 77.2% to P1.43 billion in the first quarter of 2013 from P807 million posted in the same period of 2012.          

The company’s revenues went up slightly to P7.1 billion versus P6.8 billion. 

Sahagun said the company’s first-quarter sales were affected by the heavy rains experienced in Mindanao in January and February. But cement sales were buoyed by steady demand in Luzon, particularly the National Capital Region.

Bulk of the company’s cement volumes have also been gradually rising, which points to the sustained pace of large construction projects.

The company said it is on track to revive its grinding facility in Mabini, Batangas which is expected to be completed by the third quarter. This will help in its efforts to ensure steady supply as demand rises.

This despite industry figures showing cement price averaged P218 per bag, an increase of 11% from 2012.

“Our positive financial performance in the first quarter shows the continued demand growth felt by the industry, albeit at a slower pace, and the recovery of prices. Aside from this, the improved efficiency of our plants and the organization’s commitment to keep costs in check were also factors in our good performance,” Sahagun said.

“With construction ongoing all over the country, ensuring supply is critical. Our presence in Mabini will help us ensure that our products are readily accessible to our customers in that area,” he said. – Rappler.com

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