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Holcim Philippines considers a new plant on the back of strong 3Q12 sales

World Cement,

Though traditionally a weak season for the construction industry because of the monsoon rains, cement demand remained high on account of sustained government infrastructure spending and the country’s growing portfolio of residential and commercial projects. The Cement Manufacturers Association of the Philippines (CeMAP) reported year-to-date growth of 20%, and Holcim Philippines kept pace, reporting a very similar level of growth.

The company’s revenues for the past nine months reached ?20.2 billion, up 22.5% on those of a year ago. However, with several of its facilities under preventative maintenance, the company’s efforts to keep its markets supplied came at higher cost, importing clinker to maintain production levels.

Roland van Wijnen, the company’s Chief Operating Officer explained, “We usually use the slowdown in the rainy season as time for maintenance and repair.  But, as demand exceeded expectations this year, we were confronted with the possibility of insufficient supply.  Given our commitment to ensure reliable supply, we chose to go for more expensive clinker imports.”

Van Wijnen also stated that the company expects to achieve double-digit volume growth this year. He expects better performance in the months ahead, as the plants begin to return to full efficiency following the completion of their maintenance and repair initiatives.

Holcim Philippines continues to have an optimistic outlook on the industry, and is confident that growth will carry over to 2013 given the positive economic climate and as the impact of the company’s private-public partnership projects begins to be felt. 

“The challenge for us is to meet increasing demand over the longer term,” said van Wijnen. “We have begun reactivating our idle facilities, beginning with our terminal in Calaca, Batangas last year. Our grinding plant in Mabini will be operational by the third quarter of next year.”

“What follows would be to build a new cement plant, and we hope to be able to take the first important step next year,” he explained. “We are now in the midst of preparing a proposal for a new cement plant to be submitted for Board approval in the first half of 2013.”

Van Wijnen shared that the company is looking at a brown field project, which would take less than three years to complete.

Adapted from press release by Jack Davidson.

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