Displaying items by tag: Philippines

Philippines: The Department of Trade and Industry (DTI) is enforcing stricter measures against non-compliant cement importers to protect the local market from substandard products. The DTI Bureau of Philippine Standards recently made a suspension after it conducted a market surveillance in Iloilo as part of its intensified monitoring of cement imports entering the country. The Cement Manufacturers Association of the Philippines (CeMAP) praised the recent actions of the DTI against cement importers, arguing that there has been ‘excessive’ and ‘unfairly priced’ volume of imported cement in the country to the detriment of local manufacturers, according to The Philippine Star.

CeMAP said “This recent action of the DTI-BPS sends a resounding message that non-compliance and unfair trade practices will not be tolerated. The impact of the DTI’s actions extend beyond the cement industry itself. A strong and competitive local cement sector is vital in supporting the Philippines’ continued infrastructure development and economic growth.”

Philippines: PHINMA Corporation, through its subsidiary Philcement Corporation, is set to acquire 100% of Petra Cement for US$8.6m. The Share Purchase Agreement was signed on 21 May 2024, with the transaction expected to close by 31 December 2024, according to the Manila Bulletin. This acquisition from Petra is part of PHINMA's expansion in the Mindanao region. The Petra Plant, with a capacity of 500,000t/yr, is located in Zamboanga del Norte.

Additionally, PHINMA plans to construct a 1.5Mt/yr cement packaging plant in Davao, raising its total capacity to approximately 5Mt/yr upon completion of all projects.

Philippines: Phinma Corp is set to expand its cement business with new facilities in Mindanao, according to a spokesperson for the company. The producer will establish a cement plant in Davao, valued at US$34.7m, which will bring the company’s total capacity to 5Mt/yr once completed. The plant is currently awaiting its environmental clearance certificate.

Additionally, the Petra plant in Zamboanga del Norte has started operations, with a cement grinding capacity of 500,000t/yr.

Cemex announced this week that it is preparing to sells its operations in the Philippines to a consortium comprising Dacon, DMCI Holdings and Semirara Mining & Power. Rumours of the divestment first started to appear in the media in February 2024.

The main part of the deal covers Cemex’s cement subsidiaries, APO Cement and Solid Cement, which have been valued at an enterprise value of US$660m. However, this becomes confusing because the actual selling price is the enterprise value minus the net debt and adjusted for the minority shareholding of one of the parent companies, Cement Holdings Philippines (CHP). The deal also includes the sale of a 40% stake in APO Land & Quarry and Island Quarry and Aggregates. Based on a press release issued by CHP to the Philippine Stock Exchange, the actual cost of the divestment appears to be around US$305m. It is hoped that the divestment will complete by the end of 2024 subject to regulatory approval from the Philippines Competition Commission and other bodies.

Cemex entered the market in 1997 when it acquired a minority stake in Rizal Cement. It then built the business up to a cement production capacity of 5.7Mt/yr from its two main integrated plants, the Solid Cement plant in Antipolo City, Rizal and the APO Cement plant in Naga, Cebu. However, CHP has endured a hard time of late, with falling annual operating earnings before interest, taxation, depreciation and amortisation (EBITDA) since 2019 and falling net sales in 2022 and 2020. The bad news continued into 2023, with net sales falling by 17% year-on-year to US$300m in 2023 from US$356m in 2022. It reported a loss of US$35m in 2023, double that of 2022. The company blamed the fall in sales on lower volumes. It noted that prices were also down and energy costs had grown.

The three companies buying CHP are all controlled by the Consunji family so effectively DMCI Holdings is acquiring Cemex’s operations in the Philippines. The group focuses on construction, real state, energy, mining and water distribution. It previously announced in the late 2010s plans to build one integrated cement plant on Semirara and three cement grinding plants at Batangas, Iloilo and Zamboanga but these plans didn’t seem to go anywhere. Later it was linked to the proposed Holcim Philippines sale in 2019, although the subsidiary of Holcim eventually gave up on the idea.

This latest attempt to enter the cement business underlines DMCI Holdings’ intent and the group has immediately started saying what it plans to do next. In a statement chair and president Isidro A Consunji admitted that cement demand in the country was ‘soft’ but that it is expected to rebound due to the Build Better More national infrastructure program and an anticipated fall in internet rates. Consunji added, “We recognise CHP's operational and financial issues, but we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group.” He was also keen to play up that CHP is currently building a new 1.5Mt/yr production line at its Solid Cement plant with commissioning scheduled by September 2024. DMCI plans to reduce CHP’s costs through various synergies including supplying it coal, electricity and fly ash from Semirara Mining & Power.

The acquisition of CHP by DMCI Holdings is the biggest shake-up in the local cement sector in a while. DMCI has long harboured ambitions in heavy building materials and now it’s close to becoming a reality. As evidenced by its statements following the official announcement of the deal it is already thinking ahead publicly to soothe shareholder concerns. What will be interesting to watch here is whether it can actually pull it off and whether it will face trouble from imports. Readers may recall that the Philippines cement sector has long battled overseas imports, particularly from Vietnam. Despite anti-dumping tariffs though the Cement Manufacturers Association of the Philippines (CEMAP) warned in January 2024 that workers could be laid off due to continued competition from imports. Good luck to DMCI.

Philippines: DMCI Holdings is 'optimistic' that Cemex Philippines will swing back to profit in 2024. Cemex Philippines saw its net loss increase to US$34.6m in 2023 from US$17.3m in 2023, representing a year-on-year increase of 50%. This was mainly due to higher costs and lower sales volume, according to The Manila Times.

DMCI Chairman and President Isidro Consunji said "We recognise Cemex Philippines' operational and financial issues, and we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group."

DMCI expects Cemex Philippines to double its capacity in the Luzon region with the completion of a 1.5Mt/yr integrated cement production line, which is scheduled to commence operations by September 2024. The new production line, located at Cemex Philippines's plant in Antipolo, Rizal, will increase the company’s annual production capacity by 26%, to 7.2Mt/yr from 5.7Mt/yr.

Philippines: Cemex has agreed to sell its business in the Philippines to DACON Corporation, DMCI Holdings and Seminara Mining & Power Corporation. The buyers will acquire assets including Cemex Asian South East Corporation, which holds an 89% majority stake in Cemex Holdings Philippines. The parties will derive a purchase price for Cemex Holdings Philippines by deducting net debt and minority interests from an enterprise value of US$660m. Also included in the sale is a 40% indirect equity interest in both APO Land & Quarry Corporation and Island Quarry and Aggregates Corporation. Both mining companies have a combined enterprise value of US$140m.

Cemex says that it will complete the deal later in 2024, until which time its operations will continue in the ordinary course of attending to all clients, suppliers and other stakeholders. It plans to use the proceeds from the divestment to fund bolt-on acquisitions in key markets, to reduce debt and for other corporate purposes.

Philippines: Holcim Philippines will invest US$35m in sustainability initiatives at its four plants over the next three years. The investments will also include US$17.5m for its waste management arm, Geocycle, increasing capacity for local government unit waste processing.

Chief sustainability officer Samuel Manlosa Jr. said "There is also a side where, if we want to take in more volume, we need to increase our capacity to shred and prepare the materials. Our cement plants, even as sophisticated and technologically advanced as they are, were constructed 20 years ago when norms were different, so we had to make changes in the process to make sure that the plants were able to accept more."

The company will further invest between US$8.7m and US$17.5m in renewable energy and electrification of its vehicle fleet. President and CEO Horia Adrian said "We are purchasing electricity right now, but we have plans to put in place solar facilities and we are looking at the possibility of using electricity generated from biowaste here. By the end of 2024, some of them should be ready."

He concluded that investments at the Bulacan and La Union plants are set to start this year, with those in Davao and Lugait scheduled for 2025.

Philippines: Cemex Philippines has launched a new 1500m² warehouse in Barangay Pangao West, Batangas, to improve its supply chain capabilities and meet the growing demand for construction materials in the region. This opening coincides with the Philippine national government's allocation of US$17.7bn for infrastructure development in 2024. The facility will support major development projects in Batangas, Quezon, and provide nearby provinces with cement. The Ibaan Warehouse operates 24 hours a day, providing staging areas for the loading and dispatch for cement products.

Luis Franco, president and CEO of Cemex Philippines, said "This warehouse is a great complement to our Luzon distribution network as it gives us a better position to address increasing cement demand in the market."

Philippines: A recent study from Cebu, Philippines presents a method for reducing greenhouse emissions in the cement industry. The research, supported by the Department of Science & Technology (DOST) of the Philippines, focuses on partially substituting cement with coal fly ash (CFA). According to the University of San Carlos researchers, CFA's efficacy as a cement substitute depends on its source, with variations in quality, performance, and water requirements when used in paste and mortar formulations.

The study evaluated CFA from a Philippine power plant, examining its use as a partial cement substitute. Researchers designed paste and mortar mixtures with different CFA-to-binder ratios and water-to-binder ratios. The study revealed that increasing the amount of CFA in cement up to 20% by weight could enhance compressive strength, ‘outperforming’ pure cement mixtures.

The study concluded that substituting a portion of cement with CFA not only reduces greenhouse gas emissions but also improves the compressive strength of the resultant material.

Philippines: Holcim Philippines has renewed its supply agreement to provide cement for Megawide Construction’s projects across Luzon in 2024. The partnership, initiated in 2016, continues amid increasing cement demand from Megawide.

Markus Hennig, Megawide's executive vice president, said "With our renewed supply agreement with Holcim Philippines, Megawide has reinforced its linkage with a like-minded partner who supports our vision of a first-world Philippines.”

Holcim Philippines president and CEO Horia Adrian said “We look forward to providing Megawide’s cement supply needs in 2024 and continuing engagements on possible collaborations to advance innovative and sustainable building in the Philippines.”