Displaying items by tag: San MIguel

El Salvador: Holcim El Salvador has announced the opening of a new distribution centre in San Miguel to strengthen its presence in the eastern region. The centre will provide easier access to Holcim’s Fuerte and Maestro cement from the ECOPlanet range. It also means that customers no longer need to travel to Metapán to purchase cement. The site accommodates dredges and small trucks for fast dispatch, with a minimum order of 40 bags.

Philippines: San Miguel Corporation’s cement sales more than tripled year-on-year to US$183m during the first quarter of 2023, from US$57.1m during the first quarter of 2022. The group’s cement business contributed 3% of consolidated sales, compared to 1% in the first quarter of 2022. Overall, group sales rose by 9% to US$6.17bn, the Philippine Daily Inquirer newspaper has reported.

San Miguel Corporation completed its acquisition of Eagle Cement in December 2022.

Philippines: The board of directors of Eagle Cement has acknowledged the acquisition of 89% of the producer's issued shares by San Miguel Equity Investments (SMEI). SMEI has conducted a mandatory tender offer for the remainder of Eagle Cement's shares. The board adopted three resolutions, namely to extend its cooperation to SMEI, to voluntarily delist its shares on the Philippine Stock Exchange (subject to SMEI's acquisition of more than 90% of shares) and to hold a special meeting of its shareholders.

Philippines: John Stull, the chief executive officer (CEO) of Holcim Philippines, says that the subsidiary of LafargeHolcim is no longer being considered for divestment. He made the comments at the company’s annual shareholders meeting, according to the Philippine Daily Inquirer newspaper.

“Holcim Philippines will remain with the major shareholder of LafargeHolcim and we will grow with the company and with the country," he said. Still added that the cement producer was making long-term plans to boost the production capacity of its plants in Luzon and Mindanao. LafargeHolcim’s attempt to sell its majority stake in Holcim Philippines to San Miguel Corporation for US$2.15bn collapsed in May 2020 after the Philippines Competition Authority (PCC) failed to approve the deal within 12 months of its conclusion.

Philippines: LafargeHolcim’s sale of its 86% stake in Holcim Philippines to San Miguel Corporation for US$2.15bn has fallen through after the Philippines Competition Authority (PCC) failed to approve the deal within 12 months of its conclusion. Reuters News has reported that the agreement, dated 10 May 2020, covered the exchange of four integrated plants and one grinding plant. LafargeHolcim has been divesting assets to pay off debt. The sale of its Holcim Philippines stake would have completed its withdrawal from the South-East Asia market, where its operations across Indonesia, Malaysia, Singapore and the Philippines had been valued at US$4.90bn.

LafargeHolcim has said that three of its four integrated Philippines cement plants have been able to resume operations following the lockdown due to the coronavirus outbreak. It says that it will ‘focus on strengthening operations in the Philippines.’

Philippines: Samuel O Manlosa has been appointed as the manager of Holcim Philippines’ Davao plant. He succeeded Xavier Arul Kennedy Savarimuthu in the post, who has been reassigned by the LafargeHolcim Group to lead plant operations in Nigeria.

Previously, Manlosa led a project to improve systems and processes to yield efficiency gains for Holcim Philippines' manufacturing operations. He has worked as a process and automation expert for LafargeHolcim's operations in Southeast Asia supporting plants in seven countries. Manlosa has also been sent to Holcim Switzerland for training on advanced process engineering and cement manufacturing. A native of Dipolog City, Zamboanga del Norte, he is a graduate from the Mindanao State University in Marawi City.

LafargeHolcim signed an agreement with San Miguel Corporation in mid-2019 for the divestment of its entire 85.7% shareholding in Holcim Philippines. The process is still ongoing.

Construction firm DMCI Holdings announced plans this week to enter the Philippine cement market. The company intends to build one cement plant on Semirara and three cement grinding plants elsewhere – at Batangas, Iloilo and Zamboanga – to give it a national presence. DMCI’s managing director Victor Limlingan admitted to local press that his company was taking a gamble on spending US$368m in this way.

It has staked its money on the Duterte Infrastructure Plan, a scheme from the new administration that was elected in June 2016 to target US$165bn (!) towards infrastructure spending until the early 2020s. Even if a portion of this money makes it from political hyperbole to the diggers then it is likely to mean a sustained construction boom for an economy that is already growing at around 6%/yr. DCMI’s excitement was almost palpable in mid-November 2016 when it put out a press release calling for potential partners to help it benefit from the rush when it comes. Although the company did add that all the discussions were at the exploratory stage at this time because it was still awaiting bidding documents.

DMCI’s project joins six plants in various stages of planning and construction from San Miguel, Northern Cement, Eagle Cement and LafargeHolcim. In addition four existing plants are carrying out upgrades to increase their production capacity. Clearly, things are looking up for the local cement industry. DMCI follows San Miguel which announced that it was going to spend US$1bn on building five cement plants around the country in mid-2015.

In line with this kind of investment the Cement Manufacturers Association of the Philippines (CEMAP) said that cement sales had risen by 10.1% year-on-year to 20.1Mt in the first three quarters of 2016. This follows annual sales growth of 8.7% to 21.3Mt in 2014 and of 14.3% to 24Mt in 2015. CEMAP’s data for 2015 also shows that local demand overtook the country’s kiln capacity in 2014. Subsequently imports peaked to 314,000t in 2014, the highest level since 2002.

The country’s second largest producer Republic Cement, a joint venture between CRH and Aboitiz, reported sales growth similar to CEMAP’s one for the first three months of the year. LafargeHolcim, the largest producer, didn’t reveal any figures in its third quarter report but it marked the Philippines as one of its key contributors in the quarter. By contrast, Cemex noted lower growth in its third quarter report at 4% for the nine months to September 2016. It also said that the government transition following the election had slowed cement consumption, especially from infrastructure projects.

The Philippine cement industry is in the enviable position of being in a boom. The kind of problems it has to cope with includes provincial cement shortages, lobbying to increase usage of blended cements, scrutiny of prices by the government and a rise in technical smuggling. Once the new plants and upgrades start becoming operational the true nature of the market should become more apparent. At present it looks likely that DCMI gamble may turn out to be a wise one. The next question will be how many more companies want a piece of the piece too?

San Miguel Corporation has upped the pace of its capacity expansion this week to a US$1bn investment towards five new 2Mt/yr cement plants in the Philippines. The announcement builds on its previous plans to build two plants for US$800m. At that time construction had already begun at subsidiary Northern Cement's plant in Pangasinan and Quezon. Plants in Bulacan, Cebu and Davao have now joined the list for completion in 2017.

The scale of this expansion is vast considering that the Philippines has 17 active cement plants with a total integrated production capacity of 24.6Mt/yr. San Miguel president and COO Ramon Ang's comments to media that if there were an oversupply of cement the market would correct itself in a couple of years may sound flippant to anyone who isn't the head of a multi-billion dollar corporation. However, if achieved it will propel the San Miguel subsidiaries from the country's fourth largest cement producer to its largest.

However each of the other major producers also have their own expansion plan in various stages of completion. Holcim Philippines announced US$40m plans in May 2015 to expand its production capacity to 10Mt/yr by the end of 2016, mainly through reviving existing projects. Cemex announced plans in May 2015 to spend US$300m towards building a new 1.5Mt/yr integrated line at its Solid Plant. Lafarge Republic had plans in April 2015 to raise its cement output through the opening of grinding plants at its Rizal and Bulacan cement plants. The former was opened in April 2015 but this is the one plant that hasn't been acquired by CRH following the sale of Lafarge Republic in the run-up to the LafargeHolcim merger. The latter was last reported due for opening in December 2015.

The big change in the Philippine cement industry in 2015 has been the merger of Lafarge and Holcim to form LafargeHolcim. Given that Lafarge Republic and Holcim Philippines held over 55% of the country's production capacity before the merger, it was inevitable that they would be forced to sell off assets. In the end CRH picked up most of Lafarge Republic's cement assets bar the Teresa Plant in Rizal, which stayed with Holcim. The merger has skewed the market towards one clear leader, LafargeHolcim (9.5Mt/yr), followed by Cemex (4.73Mt/yr) and CRH (4.19Mt/yr) with similarly sized cement production bases. These producers are then chased by San Miguel (2.15Mt/yr) and the other smaller firms. If San Miguel succeeds in its expansion strategy then the market will change once again.

Cement sales rose by 11.1% to 11.9Mt in the first half of 2015 according to the Cement Manufacturers Association of the Philippines (CeMAP). They attributed this growth to strong construction activity helped by increases in government infrastructure spending. Alongside this, gross domestic product (GDP) is predicted to rise by 6% in 2015 and 6.3% in 2016 by the Asian Development Bank. Another promising sign for development came from a study by Antoinette Rosete of the University of Santo Tomas which forecast that cement demand would meet 27Mt/yr. Capacity utilisation rates rose to 85% from 68% in 2014 according to Department of Trade and Industry data.

With this kind of encouragement, no wonder San Miguel is betting on such a large expansion project. If Rosete's forecast and capacity utilisation rates hold then the Philippines might need a capacity base of around 36Mt/yr. San Miguel's growth will fill that gap.

Of course other players might have their own ideas about giving away market share. LafargeHolcim and Cemex are likely to be saddled with debt or existing projects. CRH meanwhile is the wildcard as its expansion strategy is opaque. In recent years it has seemed to focus on acquisitions over building its own projects. The Euro5.2bn the company has spent on buying Lafarge and Holcim assets this year seems likely to slow down investment on any internal development plans. However CRH is bringing in local partner Aboitiz in the Philipines to help with a US$400m loan.

The Philippines is clearly an exciting market for the cement industry at the moment. One consequence of the current situation is that it may signal what CRH's global intentions are following the LafargeHolcim merger. If it decides or is able to start building new capacity then it may reveal the start of a new phase for the Ireland-based multinational.

Three stories this week from the Philippines build a complex picture of a booming cement industry. San Miguel purchased a 25% stake in Northern Cement, Lafarge Republic announced its capital expenditure budget for 2013 and the country's on-going price probe reported on its progress.

San Miguel's entry into the market should raise the most interest since its president stated that the company intends to spend US$750m on the construction of three cement plants. Each plant will have a cement production capacity of 2Mt/yr with construction timed to start in 2013 and finish by the end of 2015.

This level of investment, if it happens, surpasses the last major build announcement in the Philippines. In May 2013 Holcim released details of a US$550m plant in Bulacan with a capacity of 2.5Mt/yr. Some indication of the viability of San Miguel's plans may be gleaned from the comparative costs of the projects. San Miguel's plans will cost US$125/t of installed capacity, less than half of Holcim's US$220/t. Possible reasons for this difference may lie in San Miguel releasing the wrong figures or a reliance on lower build quality. However San Miguel's sheer size - its net income was US$2.25bn in 2011 - may itself herald the start of a major player in the domestic cement industry.

Meanwhile the Department of Trade and Industry (DTI) has continued to investigate why the price of cement has risen since 2012. Currently prices are about 5% above the suggested retail price for cement. Cement producers blamed the increases on a higher cost of coal.

The Philippines is currently experiencing massive cement sales increases. In 2012 sales rose by 17.5% to 18.4Mt from 15.6Mt in 2011. With a total capacity of 21Mt/yr and a capacity utilisation rate of 85% in 2012, this growth looks set to continue in 2013, as confirmed by more rises in sales in the first quarter.