Holcim expects sustained growth in Mindanao cement demand

DAVAO CITY — Holcim Philippines, Inc., which has just completed the expansion of its plant here, is preparing to start similar improvements in its Lugait Cement Plant in Misamis Oriental as it expects continued growth in Mindanao demand.

William C. Sumalinog, Holcim Philippines senior vice-president for sales, said the demand growth comes from both private sector and the government’s Build, Build, Build program.

“For so long, Visayas demand has always been bigger than Mindanao’s. But for the last three years, we are now bigger than Visayas,” Mr. Sumalinog said at the Habi at Kape media forum Wednesday.

“We (Mindanao) are now… maybe one million (cement bags) higher per month or 12 million bags more in annual consumption than Visayas,” he said.

Nationwide, Luzon accounts for about 65% of the company’s sales while the remaining 35% comes from the Visayas and Mindanao combined.

Mr. Sumalinog said the higher demand in Mindanao comes not just from the two primary cities of Davao and Cagayan de Oro, but also from Zamboanga, Dipolog, Butuan, and other secondary cities.

Philippine Statistics Authority data show that construction growth in the four regions in Mindanao from 2017 to 2018 at 18.1% in Davao, 16.4% for what is now the Bangsamoro Autonomous Region in Muslim Mindanao, 16.3% in Northern Mindanao, and 13.6% in Soccsksargen (SouthCotabato-Cotabato-Sultan Kudarat-Sarangani-General Santos City).

Assistant Secretary Romeo Montenegro, deputy executive director of the Mindanao Development Authority, said the national government has allocated P761 billion for infrastructure projects in the southern islands for 2017-2022.

“With these figures alone, we can expect the extent of (cement demand in) Mindanao,” Mr. Montenegro said at the same forum.

Mr. Sumalinog said the rule of thumb is that between 10%-12% of the cost of construction goes to cement.

“So that’s about P80 billion (of cement demand for government projects alone),” he said, adding that Holcim hopes to avoid running out of inventory in Mindanao.

The listed cement maker spent P1.5 billion on its Davao plant expansion and has budgeted a combined $300 million for the expansion of the plants in Misamis Oriental and Bulacan. — Carmelito Q. Francisco & Maya M. Padillo