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Slowing demand affects 2011 revenues for Holcim Philippines

World Cement,

Holcim Philippines has announced FY11 sales revenues of PHp21.62 billion, nearly 9% less than 2010 figures. The company has cited rising coal and electricity prices as contributing factors to the drop in revenues, with energy costs rising by 14%/t. Holcim also felt the effects of delayed public spending, which led to a slowdown in local cement demand.

However, the company did achieve a profit of PHp2.03 billion and saw improved performance from its Ready Mix Concrete and Geocycle businesses.

Roland van Wijnen, Chief Operating Officer, stated: “The environment in 2011 was certainly tough, but I believe we were able to demonstrate our resilience as an organisation by responding early to market challenges and focusing on areas within our control. We managed to keep our market share within our target range and put in place various initiatives that have helped us improve operational efficiencies and effectively manage our costs. All these help us to position ourselves well for future growth.”

Holcim remain cautiously optimistic about the company’s 2012 performance following the government’s renewed commitment to investment in infrastructure and increased construction in the private sector in Q411. Van Wijnen indicated that Holcim would bring down costs through operational means and through greater use of alternative fuels and raw materials.

He went on to add: “To ensure profitability levels that would enable us to make further significant investments to supply the market, cement prices will unavoidably have to be adjusted. For a sustainable operation, we need to return to 2010 price levels and recover the cost increases of 2011 and 2012.”

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