Holcim PHL to spend nearly $300M on capacity expansion

By Arra B. Francia, Reporter
HOLCIM PHILIPPINES, Inc. is allocating almost $300 million to hike capacity by a third by 2020, banking on the rollout of the government’s infrastructure program.
The listed cement manufacturer said in a statement on Monday that the investment will be used to upgrade its facilities in Bulacan and Misamis Oriental. This includes the installation of new kilns, mills, and waste heat recovery systems.
“Our capacity expansion ensures that we can provide a steady supply of quality building materials to support the government’s infrastructure program and the resulting construction activity from the economy’s sustained rise,” Holcim President and Chief Executive Officer John W. Stull said in a statement.
This investment comes on top of Holcim’s $54-million capital infusion to expand its cement production in La Union and Davao, which is expected to bring its capacity to 12 million metric tons by 2019. In 2016, the firm also conducted debottlenecking activities across all its sites, raising cement capacity to 10 million metric tons from 8.5 million.
Holcim expects its annual capacity to reach 13 million metric tons by the end of its expansion efforts.
“This investment is proof of our confidence in the country and our commitment to be a strong partner for progress. With this, Holcim Philippines will continue being a reliable partner in building a better future for the country,” Holcim Chairman Tomas I. Alcantara said in a statement.
Holcim reported a 47.58% drop in net profit to P176.88 million in the third quarter of 2018, as heavy rains in September dampened overall demand for cement products. Sales for the period stood at P8.52 billion, 3.15% higher year-on-year.
On a nine-month basis, Holcim’s net profit fell by 24.35% to P1.74 billion, tempered by price pressures due to the rise in costs of fuel, power, and distribution. The company’s performance was further hit by the weaker peso that affected imported production inputs.
Meanwhile, net sales went up by six percent to P27.3 billion in the same period, which the company attributed to successful commercial initiatives.
Holcim mirrored the lackluster performance of other listed cement manufacturers during the third quarter, as the industry was hit by higher input costs and the weaker peso.
Incorporated in 1964, Holcim is part of the LafargeHolcim Group, which is involved in building materials present in about 80 countries. The local firm has manufacturing facilities in La Union, Bulacan, Misamis Oriental, and Davao. Its cement products include Holcim Premium, Holcim 4X, Holcim Excel, and Holcim WallRight Cement.
Shares in Holcim gained 1.38% or eight centavos to close at P5.88 each at the stock exchange on Monday.