Despite challenging market conditions, Holcim Philippines is continuing its capacity expansion in the southeast Asian country. According to its latest quarterly report, groundbreaking at the company’s Davao plant expansion project occurred in October, attended by key government and company officials.
The PHP2.7 billion project will expand cement production capacity at the Davao plant to 2.7 million tpy. The Davao plant is located in Davao, the largest city on the island of Mindanao in the south of the Philippines.
When complete, the project will raise the company’s capacity to 12 million tpy from the current 10 million tpy.
“We remain steadfast in our support for Philippine growth and in the many opportunities in the market,” said Holcim Philippines President and CEO, Sapna Sood.
In addition to the Davao project, the company also said it was taking measures to adapt the business to the current challenging market environment in the Philippines. Cement demand has been weaker than expected in the country, while rising competition has had a negative impact on prices.
In response, Holcim Philippines was “further strengthening its cost management efforts through logistics excellence, renegotiation of energy and procurement contracts to improve variable costs, and fixed cost management,” the company said in a press release.
The company’s continuing commitment to the Davao expansion project reflects its belief that government infrastructure spending will underpin growth in demand for building materials in the country.
“Holcim Philippines firmly believes in the government’s commitment on infrastructure growth that would spur the economy and improve the lives of the people,” Sood said at the Davao project groundbreaking ceremony. “The government needs the support to make that happen and that is where we come in.”
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