Eagle Cement’s 3rd facility to operate at full capacity by Q3

EAGLE Cement Corp. (ECC) expects its third cement facility in Bulacan to start contributing to earnings by the second half of the year, after partially commencing operations last April.
The listed cement manufacturer said its third cement line in San lldefonso, Bulacan will add two million metric tons (MT) to its current capacity of 5.1 million MT per year. The plant will start operating at full capacity by the third quarter of this year.
“We’re expecting some volume growth compared to previous year’s second half… impact financially will be second half,” ECC President and Chief Executive Officer John Paul L. Ang said in a press briefing after the company’s annual shareholders’ meeting in Mandaluyong City yesterday.
The capacity expansion will allow the company to expand its market range to areas in Region 1, Mimaropa, Bicol, and Western Visayas.
The Bureau of Investments granted an income tax holiday to ECC as an expanding producer of cement. The company said this will give them P530 million in savings over the next three years.
Once the third line operates at full capacity, Mr. Ang said this will make ECC the largest cement firm in the company in terms of size.
ECC is also currently constructing its fourth cement line in Cebu, which will expand the company’s market to the Visayas and Mindanao regions. The plant in Malabuyoc, Cebu will have a capacity of two million MT, with target completion by 2020. Asked whether the company will start exporting cement given its expanded capacity, Mr. Ang said the surplus for cement in Southeast Asia is keeping them from doing so.
“The line 4 in Cebu has a pier of which we can receive massive amounts of raw materials and at the same time, export cement of at least four million ton[s]. The pier is built to handle two lines, so there’s a possibility of export. But currently the ASEAN — Vietnam, Indonesia, Malaysia, there’s a surplus of cement capacity. It only makes sense to export in nearby areas,” Mr. Ang explained.
The company said the rising foreign exchange rates will have a minimal effect on its operations, since it does not import cement products.
“May tama samin (We will see an effect) because all these inputs are dollar denominated. There’s some effect, but since we make our own clinker, some effect but minimal. We don’t import clinker, we don’t import cement so we are less vulnerable to exchange rate,” Mr. Ang said.
With this, Mr. Ang said there is no need to increase prices to improve profitability.
This year, ECC targets to grow its net income to P6.5 billion, from the P4.26 billion it generated in 2017. Revenues are also seen to grow to around P23 billion for the year.
Shares in ECC went down by 0.13% or two centavos to P15.88 each at the stock exchange on Thursday. — Arra B. Francia