Holcim expects to miss sales target after plant closure

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Holcim Philippines, Inc. (Holcim) is expecting to miss its production and sales targets this year with the closing of its factory in Davao for two weeks.

In a disclosure to the stock exchange on Monday, the cement manufacturer said it is shutting its Davao City Holcim plant from April 4 to 19 to comply with government orders in light of the coronavirus disease 2019 (COVID-19) pandemic.

The company had previously announced it also closed its cement factories in Bacnotan and Norzagaray, terminals in Calaca, Mabini and Manila, and dry mix factory in Parañaque due to the Luzon-wide quarantine.

“While our Lugait Plant in Misamis Oriental will continue to operate and serve the requirements of our business partners and customers in Northern Mindanao and the Visayas, the suspension of our operations of our Luzon and Davao plants will result in the company’s inability to meet our production and sales targets which may have material financial impact to the business,” it said.

To cushion the possible financial impact while complying with government directives, the company said it had started implementing cost control measures.

Some P30.89 billion of the company’s total P33.49 billion revenues in 2019 came from sales of cement and cementitious materials. 

Holcim operates cement plants in Luzon and Mindanao: two integrated cement plants, one cement grinding plant and one dry mix plant in Luzon; and two integrated cement plants in Mindanao. 

Of these, only the Lugait plant in Misamis Oriental remains operational, as all the rest are closed due to COVID-19 mitigation efforts.

The company recorded a 41% earnings growth in 2019 to P3.59 billion, driven by reduced costs due to enhanced efficiencies. Its shares at the stock exchange added 32 centavos or 2.67% to P12.30 each on Monday. — Denise A. Valdez