Displaying items by tag: Philippines

Philippines: Holcim Philippines has plans to invest US$350m to US$450m on building a new 2Mt/yr cement plant due to increased demand and sales in the third quarter. This quarter is normally a weak season for the construction industry because of monsoon rains.

Holcim Philippines' chief operating officer Roland van Wijnen said that cement demand remained robust on account of sustained government infrastructure spending and steady rollout of residential and commercial projects. The Cement Manufacturers Association of the Philippines (CEMAP) has reported a growth rate of 20% since October 2011.

Holcim Philippines reported a 22.5% growth in its net income to US$61.5m in the first nine months of 2012 from US$50.3m in the same period of 2011. Revenues for the past nine months reached US$491m, an increase of 22.5% year on year. However, third quarter earnings in 2012 declined to US$12.5m from US$15.2m in 2011. The company attributed this to having to import clinker to augment production given that several of its facilities were under preventive maintenance.

"The challenge for us is to meet increasing demand over the longer term. We have begun reactivating our idle facilities, beginning with our terminal in Calaca, Batangas in 2011. Our grinding plant in Mabini will be operational by the third quarter of 2011," said van Wijnen. Holcim Philippines is now preparing a proposal for a new cement plant to be submitted for board approval in the first half of 2013. If built this will boost the firm's cement capacity to about 9.5Mt/yr with a completion date of 2016.

Philippines: Cemex has announced that it is planning to expand the cement production capacity of its APO plant in the Philippines by 1.5 Mt/yr. Through an investment of approximately US$65m, the company will increase production and strengthen its distribution network to better serve high-demand areas throughout the country. The increase is expected to be operational by the first quarter of 2014.

With this new investment, Cemex says that it will keep pace with the Filipino market's rapid growth. The country registered a GDP growth of 6.1% in the first half of 2012, according to its National Statistical Coordination Board. The Metropolitan Manila Development Authority has begun multiple infrastructure projects as the country recovers from damage caused by extreme weather conditions.

"Infrastructure development has been one of the constant needs of the country and it has to be addressed with urgency," said Pedro Palomino, president of Cemex in the Philippines. "We are proud to be a part of the development of the Philippines and wish to be a long-term partner on its path to a prosperous, sustainable future."

Coal ash seems to be in short supply in the Philippines. Lafarge Republic has signed a deal with a local energy producer to buy coal ash from a new 600MW coal plant.

Although the cost of the deal was not announced, the agreement will run from when the plant starts operation until 2019. This move follows a similar arrangement by Cemex Philippines in June 2012. In that instance Cemex agreed to purchase coal ash from the 200MW Kepco SPC Power Corp plant in Naga, Cebu for US$0.95/t.

Distinctively both arrangements were set up in conjunction with local government. For the Lafarge deal part of the agreement involved donating at least 10,000 bags of cement per month for use in various infrastructure projects of the province. Bataan governor Enrique Garcia put the value of the deal at US$1.19m/yr. For the Cemex deal the Cebu Provincial Government signed the agreement. In November 2009 Cebu Province and Kepco entered into an Ash Disposal Agreement, where Cebu Province was granted exclusive rights to the ash produced by the power plant.

Adding to the suspicion that the Philippines lacks sufficient coal ash, back in the autumn of 2011, the Cement Manufacturers' Association of the Philippines (CeMAP) asked the Department of Trade and Industry (DTI) to impose mandatory quality standards on raw materials, such as coal ash. This followed accusations by CeMAP that poor quality coal ash might be behind complaints from contractors working on infrastructure projects. In 2009 a DTI profile on the cement industry placed the demand for Portland cement at 73% and the demand for pozzolan cement at 27% of the total.

Cement sales in the Philippines have been steadily growing over the last decade. Lafarge Republic announced in August 2012 that it was increasing its capacity to just below 9Mt/yr in 2013. Around the same time CeMAP released data showing that sales were up 20% year-on-year for the first half of 2012. The local industry reported combined sales of 15.6Mt in 2011. Previous to this, Holcim Philippines announced the US$9.46m upgrade to a previously closed mill in Batangas.

Philippines: Lafarge Republic has signed a deal with the provincial government of Bataan and GNPower Mariveles Coal Plant to buy coal ash from the latter company's 600MW power plant.

Lafarge Republic, formerly Republic Cement, said the deal will start once the power plant begins producing coal ash. It will expire in November 2019. The company didn't provide financial details of the deal.

In a transaction announced in June 2012, Cemex Philippines said it will buy for around US$1 each ton of coal ash to be produced by the 200MW power plant of Korea Electric Power in the central province of Cebu.

Philippines: Lafarge Republic plans to increase its production capacity by roughly 1Mt/yr starting in 2013 to meet strong public and private sector demand for cement in the Philippines.

The firm, whose production capacity was reported at 7.7Mt/yr in early 2011, said it will be refurbishing its grinding plant in Danao, Cebu and the mill at its plant in Norzagaray, Bulacan, yielding a capacity of 650,000t/yr in Visayas, as well as another 200,000t/yr in Luzon and 100,000t/yr in Mindanao.

"Based upon the strong demand growth for building materials during the first half of 2012 and our understanding of the order backlog of construction projects for the leading construction companies, we expect another year of sales and earnings growth in 2013," said Dong H Lee, country chief executive of Lafarge in the Philippines.

Philippines: Ongoing construction demand from 2011 and new infrastructure projects have driven cement sales in the Philippines up by 20% in the first half of 2012, according to data from the Cement Manufacturers' Association of the Philippines (CEMAP). Cement sales from January to June in 2012 reached 9.55Mt, up by about 20% year-on-year.

CEMAP president Ernesto Ordoñez attributed the sales increase to higher infrastructure spending. In 2011 the government deferred the implementation of various projects for review. This resulted in a drop in demand for construction materials, including cement. The implementation of these projects, on top of infrastructure projects lined up for 2012, have increased demand for construction materials.

Cement sales, according to CEMAP, are expected to remain strong for the rest of 2012. The local industry reported combined sales of 15.6Mt in 2011. CEMAP includes cement producers Cemex Philippines, Holcim Philippines, Lafarge Cement Services, Northern Cement, Pacific Cement and Taiheiyo Cement Philippines.

Philippines: Holcim Philippines is preparing a US$9.46m upgrade of its formerly closed Batangas mill to meet an anticipated rise in demand in Southern Luzon.

Upon its reopening in 2013, the grinding plant in Mabini, Batangas with an existing capacity of 7.7Mt/yr will have an additional 500,000t capacity. The mill had been decommissioned in 2003 amid weak cement demand.

"South Luzon is one of the fastest-growing areas in the country and we expect this growth to continue, fuelled by both public and private construction. We want to be sure we have the facilities ready to deliver volumes when and where these are needed," said Roland van Wijnen, Holcim chief operating officer said in the statement.

Holcim's Mabini plant will be its second facility in Batangas after the company's Calaca terminal, which the company reopened in 2011 in a bid to serve the southern Luzon market and facilitate cement transfers from Mindanao to Luzon, where demand is highest.

"Having facilities across the country from north Luzon to Mindanao gives Holcim the strong advantage of being near its markets. Our Mabini facility will help further strengthen the capability and accessibility in bringing our products to where our customers are," van Wijnen said.

Philippines: Cement producers in the Philippines are raising their prices, as increases in fuel prices have not shown any sign of abating and the peak of the construction season is starting.

Trade and Industry Undersecretary for Consumer Welfare Zenaida C Maglaya said, that based on the Price Monitoring report released on Friday 23 March 2012, prices of two brands of cement Republic (Lafarge) and Rizal (Cemex) had increased. However, the price of Holcim Philippines Inc. dropped by 2.5% from February to March 2012. In June 2011 Holcim raised its prices by 6% in Luzon. The three global firms dominate the Philippine industry.

Cost of power and coal accounts for 40% of a cement company's total production expenses in the Philippines. Most of the cement firms source their coal supply from Semirara Coal Corp. Construction activities are higher during the summer months, normally starting early in the year and peaking in May.

Construction activity was fuelled by private sector spending in 2011, as the government did not spend much on infrastructure projects. However the Aquino administration has started accelerating investments and implementation of major infrastructure projects in 2012. Both infrastructure and private sector investments in property developments, including housing and commercial establishments, are expected to boost demand for construction materials, including cement.

Philippines: Holcim Philippines expects a modest growth rate of 5-6% in 2012 as it attempts to recover from a steep drop in net profit in 2011, according to its chief operations officer Roland van Wijen.

The Philippine subsidiary of Switzerland-based Holcim Ltd posted a net profit of US$47m in 2011, down by 47.1% from US$90m in 2010 because of weak demand and higher production costs. Sales revenues dropped 9% to US$496m due to a surge in prices of coal and electricity, the biggest cost components in cement production.

"Last year was a challenging year for us because reduced government spending meant that there was less structure built, which has a direct correlation to cement consumption. Also, the (operational cost) has been increasing which had a marked effect on our bottom line. Those are the elements we are recovering from," Van Wijnen said at the launch of Holcim's new CSR project. He added that the company is currently cutting production cost by stepping up the use of waste materials as an alternative to coal.

Holcim Philippines currently has a market share of one third of the cement industry and at present the company has no plans of expanding its market share. "We will go there when our customers want us to go. Right, now, the market has an over-capacity so significantly increasing our market share will not contribute to growth," Van Wijnen said.

Van Wijnen said the company's growth would be greatly driven by more projects that would be approved under the government's Public-Private Partnership (PPP) scheme. The company is pursuing opportunities for supplying winning bidders in the PPP projects. Van Wijnen said the company is optimistic that both the government and the private sector would increase infrastructure spending this year.

With a workforce of over 1700, Holcim Philippines operates four plants in La Union, Bulacan, Misamis Oriental and Davao. In January 2012 Holcim reopened its cement plant in Calaca, Batangas, to take advantage of an anticipated surge in demand for new buildings and infrastructure in Metro Luzon.

Philippines: Cement producers in the Philippines have asked the Department of Trade and Industry (DTI) to impose mandatory standards on the raw materials used to ensure that quality standards are being followed. These standards would also effect producers of finished products that make significant use of cement. DTI Undersecretary for consumer welfare, Zenaida C Maglaya, made the announcement following a recent meeting of Cement Manufacturers Association of the Philippines (CeMAP).

According to Maglaya, CeMAP would like raw materials such as fly ash and aggregates to be placed under mandatory standards following complaints from contractors working on infrastructure projects. CeMAP said it will take years to find out the impact of poor quality fly ash. "We are asking CeMAP to submit their study because this is a technical issue," Maglaya said.

Maglaya explained that the standards for raw materials for cement are voluntary under the Philippine law. Being voluntary, Maglaya said, the responsibility lies on the end manufacturer although this can still be raised before the DTI. The move to standardise raw materials of cement and end-products using cement has followed a crackdown by the Department of Public Works and Highways against contractors of government infrastructure projects.