Aboitiz group to pour $300 million into cement business

MANILA, Philippines – The Aboitiz group is pouring $250 million to $300 million into its cement business over the next 5 years, as it rides on the national government's aggressive infrastructure spending of about P8 trillion until 2022.

Republic Cement & Building Materials Incorporated (RCBM) is undertaking various debottlenecking projects across its plants and construction of a new terminal. 

"We have agreed to increase capacity of our cement business in the Philippines to about a million tons a year by debottlenecking and eventually building a new terminal," said Sabin Aboitiz, member of Republic Cement's board of directors and president of Aboitiz InfraCapital Incorporated.

The Aboitiz group held its annual stockholders' meeting in Makati City on Monday, May 15.

Republic Cement has expanded its plant in Norzagaray in Bulacan, boosting capacity by an additional 850,000 metric tons annually. 

"We will debottleneck. We are going to expand to produce more, which we have already started. Today, for example, I came from Norzagaray plant, we’ve debottlenecked one plant already so a lot of investments are in already," Aboitiz said in a press conference.

Aboitiz said Republic Cement produces about 7 million tons annually. (READ: AboitizPower explores Myanmar, Indonesia amid PH power oversupply)

"We are already producing more. For example, we didn't actually import any clinker this year. That is starting to happen," he added.

Some of the projects it services include 300-meter steel cable bridge in Butuan City, Subic Bay Port in Zambales, 200-meter tall San Roque Dam, One Serendra development of Ayala Land Incorporated, and the 7.5-kilometer Candelaria Bypass Road in Quezon Province.

Aboitiz Equity Ventures press con starts @rapplerdotcom pic.twitter.com/UR6xiiXW9I — Chrisee V. Dela Paz (@chriseedelapaz) May 15, 2017

Optimistic

"First quarter was weak basically because of weather, but we've started to see pickup," Aboitiz said.

The company is riding on President Rodrigo Duterte's pledge to spend about P8 trillion until 2022 to restore the country's crumbling roads and bridges, glitch-ridden trains, as well as airports that seem to be behind the times.

The government's rolling infrastructure plan will include the country's first subway, Mindanao's first mass transit railway, the development of Clark Green City, and another commuter railway linking Tutuban, Manila, to Clark, Pampanga. 

"First, the government infra spending is a big part. It will start kicking in the 3rd quarter. That will help a lot," Aboitiz said.

The Department of Budget and Management (DBM) reported that infrastructure spending grew about 12.2% in the first quarter of 2017, mainly due to the road projects by the public works department.

For its first full-year operations as part of the Aboitiz group, Republic Cement recorded an income contribution of P1.6 billion, a 700% rise from 2015 principally because of the full-year effect.

Republic Cement is the country’s second largest local cement manufacturing and distribution company. It operates 6 cement facilities that produce over 25% of the Philippines’ cement requirements. 

Republic Cement is backed by the global expertise of CRH, a leading building materials company with main headquarters in Dublin, Ireland, and Aboitiz, a diversified Filipino business group recognized as one of the best managed organizations in the country and in Asia.

Founded in 1955, the company has been associated with some of the world’s best performing organizations, such as Blue Circle and Lafarge. Recently, Republic became part of the CRH-Aboitiz team in the Philippines. – Rappler.com