CEMEX Holdings Philippines Corp. (CHP) looks to spend P7.5 billion in capital expenditures (capex) this year, mainly to support the expansion of its Antipolo cement plant.
In a presentation posted on its website, the listed cement manufacturer said about P6.775 billion of the allocation for the year will go to the expansion of Solid Cement Plant.
CHP earlier committed to spend a total of $235 million to boost Solid Cement plant’s capacity by 1.5 million metric tons (MT) from the current 1.9 million MT. The expansion will also increase the firm’s overall capacity by 26%.
Of this budget, CHP said it has already invested $64 million, $39 million of which are advances that will be capitalized in 2019 and 2020.
The new production line is seen to start operations by the fourth quarter of 2020, with its products to be sold in the National Capital Region and Southern Luzon.
The remaining P975 million from this year’s capex will fund maintenance requirements.
CHP also set a guidance of 8-10% growth in cement volumes. This is higher than the seven percent increase in cement volume it posted in 2018 versus 2017, driven by the infrastructure and residential sectors.
The company recently said that it plans to raise $250 million through a potential stock rights offering, in a bid to improve its capital structure as well as to support the Solid Cement expansion.
CHP swung to a net loss of P930 million in 2018, against a net income of P659 million in 2017. The company was affected by the landslide in Naga, Cebu which affected the operations of its supplier of raw materials. It also attributed the decline to higher foreign exchange losses and higher income tax expenses.
CHP is the local unit of Mexican cement and construction materials company Cemex S.A.B. de C.V. Its cement products are sold under three brands, namely Island and Rizal for Luzon, and APO for the Visayas and Mindanao. — Arra B. Francia