EAGLE CEMENT Corp. is keeping a bullish outlook for the local cement industry in 2018, as the company says it will further increase cement capacity this year.
The Ramon S. Ang-led cement firm is nearing the completion of its third cement line in Bulacan, which is slated to bring its annual capacity to 7.1 million metric tons (MT) from the current level of 5.1 million MT.
“Our outlook for the local cement sector remains bullish in 2018, as evident in our expansion strategy. We are currently increasing capacity to serve the growing local demand coming from the strong private consumption and government’s national infrastructure push,” the company said in an e-mail.
The Bulacan facility is expected to increase the company’s sales by 35% in 2018, or a total of 130 million bags, bringing Eagle’s market share to around 25%.
For this year, Eagle Cement targets to book a net income of at least P6.5 billion.
Aside from the Bulacan plant, Eagle Cement has also started construction on its fourth cement facility in Cebu, allowing the company to service the needs of the Visayas and Mindanao market.
“We will be completing the third integrated production line in Bulacan by 2018. We have started construction on our fourth integrated production line in Cebu, including its support facilities,” Eagle Cement said.
The Cebu plant will add another 2 million MT to Eagle Cement’s capacity, for an overall capacity of 9.1 million MT once it is completed.
Asked what challenges it sees would affect operations in 2018, the listed firm cited competition, and operational, financial, and economic risks, among others.
“We have business strategies and operating systems in place to help manage them and at the same time, we continuously innovate to mitigate them,” the company said.
Eagle Cement further noted that it prepared for any effects the Tax Reform for Acceleration and Inclusion program, which would increase taxes on fuel and oil, and sugar-sweetened beverages, among others, thereby prompting a rise in the cost of some commodities.
“There will be some impact to the company, but the cost structure we have in place gives us the ability to manage its effects,” the company said.
Eagle Cement generated a 7% increase in earnings for the first nine months of 2017 to P3.3 billion, following an 11% uptick in revenues to P11.2 billion. The company is targeting a full year income of P4.3 billion to P4.5 billion in 2017, on the back of a P15-billion revenue. — Arra B. Francia
