CEMEX Holdings Philippines, Inc. (CHP) has suspended operations of its cement terminal in Davao, after a landslide in Cebu triggered the shutdown of quarry activities of its raw materials provider.
In a disclosure to the stock exchange on Wednesday, the listed cement manufacturer said the Davao terminal operated by its Cebu-based subsidiary APO Cement Corp. has been incurring higher costs due to the outsource of raw materials from different regions of the country, as well as outside the Philippines.
According to APO Cement, its Davao terminal holds and dispatches 25,000 bags daily.
APO Land & Quarry Corp. (ALQC), APO’s principal raw material provider, has been suspended from operating for two months now after a landslide in Brgy. Tinaan, Naga City, Cebu last Sept. 20 left at least 78 people dead.
CHP, APO, ALQC, and other related government units are now facing a P4.33-billion environmental class suit in relation to the quarry operations.
“As a consequence of the above, the organization has been constrained to take measures to reduce the impact of the current situation on its results of operations, business, liquidity, and financial condition,” the company said.
CHP has also suspended operations of one out of two kilns in Cebu. Meanwhile, APO will be laying off 30% of its regular employees and 38% of its contractual employees. The company will further reduce its workweek to bring down costs and expenses.
“APO Cement Corporation decided to implement additional measures to deal with the continuing challenges of having to source raw materials from different regions of the Philippines and from outside of the Philippines in order to produce cement,” APO Cement Spokesperson Chito S. Maniago said in a statement.
Shares in CHP fell 3.55% or seven centavos to close at P1.90 each at the stock exchange on Wednesday. — Arra B. Francia