Holcim Philippines gets nod from Zurich to build 2.5M MT cement factory

Holcim Philippines Inc. on Wednesday said it received the first approval from its Zurich-based parent to build a $550 million cement factory in Bulacan to head off an expected surged in demand as the economy continues to grow. The new factory will have a boilerplate capacity of 2.5 million tons a year and is expected to be on stream by 2016., CEO Ed Sahagun told reporters in a briefing. “The timing of the construction of new plant is perfect because the country is doing well in a lot of aspects,” Sahagun said. The cement executive noted efforts to fully revive the Holcim grinding facility in Mabini, Batangas by the third quarter will help the company ensure steady supply as demand rises. Demand for cement is seen surging as more infrastructure projects under public-private partnership program go on stream, the Holcim official noted. On top of that, the company said the recent investment grade ratings obtained by the Philippines from debt-watchers Fitch Ratings and Standard & Poor's will further drive the construction sector as more funds are channeled toward infrastructure development. “The investment grade rating is also expected to encourage more foreign direct investments in the Philippines, thus helping spur construction and fuel cement demand even more,” he added. Despite the heavy rains in Mindanao last January and February, the strong demand from Luzon—particularly in the National Capital Region—buoyed the company's bottom line, said Sahagun. Net income in the first quarter surged by 77.2 percent to P1.43 billion from P807 million, largely fueled by strong demand and higher cement prices. Meanwhile Holcim Philippines also reported that its first quarter net income grew by 77.2 percent to P1.43 billion from P807 million posted in the same period last year on surge in demand and higher cement prices. Industry figures showed cement price at P218 per bag on average, or 11 percent higher that a year earlier. Revenues were up slightly to P7.1 billion from P6.8 billion in the first three months year-on-year. Sahagun cited the first quarter results as primary reflections of demand and 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,” he added. — VS, GMA News