Displaying items by tag: Philippines
Philippines: Cash-strapped Pacific Cement Company (PACEMCO) has decided to extend the suspension of its cement plant operations for three months to complete ongoing negotiations regarding a possible investment of funds needed to re-open the plant.
"During this period of work suspension, management has committed to respect the benefits of the employees which are clearly spelled in the minutes of the conciliation conference held at the office of the Department of Labour and Employment (DOLE) Secretary on 14 November 2014," said Inocencio R Cortes, executive vice president of PACEMCO. "As a result of this extended work-suspension, all employees are hereby advised not to report to the main plant site or the port site as the case may be, as well as to those in the head office in Makati City, effective 17 November 2014 and until further notice," he added.
PACEMCO's cement plant halted operations on 5 May 2014 after the Surigao del Norte Electric Cooperative cut its power supply for unsettled obligations worth at least US$555,432. Edwin Batac, union president of Pacemco Mamumuong Nagkahiusa, said that the company has 343 employees who were on forced leave after the company stopped its operations. Batac added that the company is financially drained.
Philippines: The Cement Manufacturers Association of the Philippines' (CeMAP) president, Ernesto Ordonez, said that total cement sales for the first half of 2014 reached 10.72Mt, up from 10.14Mt for the first six months of 2013. For the second quarter of 2014 alone, cement sales climbed by 3.2% to 5.52Mt from 5.35Mt in the comparable period of 2013. Compared to the first quarter's 5.19Mt, cement sales in the second quarter of 2014 grew by 6.19%. The increase in sales was seen amid higher demand from both the public and private sectors.
Ordonez said that there was a Department of Public Works and Highways (DPWH) budget increase, while the private sector continued to grow because of increased confidence in the government. The latest data from the Department of Budget and Management (DBM) showed that government spending for infrastructure and capital outlay posted a 24.5% increase to US$2.16bn as of April 2014, compared to US$1.74bn in 2013. The notable infrastructure disbursements were channelled mostly to on-going reconstruction and rehabilitation efforts in communities devastated by Super Typhoon Yolanda. The DBM said that the increase in disbursements is also due to the Aquino administration's stronger focus on strengthening the economy through infrastructure and capital outlay investments.
Philippines: Holcim Philippines has posted a net profit of US$38.0m for the second quarter of 2014, slightly higher than the US$37.4m reported for the same period of 2013, with sales on pace to meet internal targets amid robust demand from the construction industry. Revenue was US$203m during the second quarter of 2014, up from US$188m for the same period of 2013.
This brought first half 2014 net profit to US$76.6m, up from US$70.3m in the first half of 2013, while revenue for the period was US$389m, compared with US$355m in 2013. Holcim Philippines' president and CEO, Eduardo A Sahagun, said that the company is 'on track' with its 8% short-term sales growth target, as well as its 5% to 6% sales growth target for the long term.
"On top of the sustained government and private sector spending, we now see some major private-public partnership projects being implemented in the metropolis, hence, our strong sales," said Sahagun. "We were able to meet this demand due to our ability and commitment to keep the market supplied during this period of robust growth." Other factors that contributed to the company's growth were 'full-swing' construction during the summer months and post-calamity construction in the Visayas Region.
Holcim, which has a local market share of around 34%, is currently in the process of merging with Lafarge, which has a share of around 28%. Sahagun said that the merger might be finalised by May 2015, resulting in a combined market share of 62% in the Philippines.
Philippines: Lafarge Republic and the Global Business Power Corporation (GBPC) has launched an initiative aimed to lower the costs of rehabilitation projects, such as the rebuilding efforts for Yolanda and the Bohol earthquake-affected areas, through the introduction of a ash-based cement called called Kapit-Balay cement.
Kapit-Balay cement is a result of the Total Ash management partnership between Lafarge Republic and GBPC. Under this collaboration, Lafarge uses the fly ash from GBPC's power generation processes to produce blended cement. Under the partnership, the two companies worked on optimising the cost of producing the ash-cement, which enables them to contribute in lowering the overall cost of rebuilding with the additional support from Lafarge's packaging partner and a direct sales distribution model to rehabilitation projects.
Philippines: Cement sales rose by 8.6% in the first quarter of 2014. The surge was largely driven by rebuilding following the destruction wrought by typhoon Haiyan in November 2013, according to the Cement Manufacturers Association of the Philippines (CEMAP). Cement producers sold 5.2Mt of cement in the first quarter of 2014 compared to 4.8Mt in the same period in 2013.
"The increase was primarily due to reconstruction efforts following super-typhoon Haiyan," said CEMAP president Ernesto Ordoñez in a phone interview with local media. He added that rebuilding is likely to drive cement sales for 'more than a year' and that private sector confidence was also helping sales.
Following typhoon Haiyan the government of the Philippines raised its budget for infrastructure in 2014 by 37% to US$9bn from US$6.6bn in 2013 to provide for rehabilitation and reconstruction in areas affected by the typhoon. In 2013 sales by the local cement industry grew by 6% to 19.4Mt/yr from 18.4Mt/yr in 2012.
Philippines: Holcim Philippines is prepared for more competition with the integration of markets in the Association of Southeast Asian Nations (ASEAN) region by 2015. Chief executive Eduardo Sahagun said that there is no reason that imports will be cheaper than local product especially considering the logistical costs of importing cement into an archipelago, according to the Manila Bulletin.
"We see opportunities in the greater integration of the ASEAN. Our view remains that the growth of cement demand in the medium term will be sustained but are considering other options to supply the market," said Sahagun. "I am hopeful that the government will support the local cement industry given that it is one of the few remaining integrated industries in the country. Local cement manufacturers are burdened by one of the highest energy costs in the region and an improvement in this area will go a long way to improve the industry's competitiveness."
In February 2014 Holcim Philippines announced that it may delay the construction of a US$550m cement plant in Bulacan province due to increasing economic integration in the ASEAN region.
Philippines: Lafarge Republic is investing US$25m towards building a new 0.85Mt/yr cement mill at its plant in Bulacan. The plant is expected to be operational by June 2015 following the commissioning of a mill at the Teresa cement plant, which is scheduled for January 2015.
Lafarge said in a statement that the projects will enable the company to produce an additional 1.7Mt of cement by 2015. The upgrades have been commissioned to meet an expected increase in demand in response to anticipated infrastructure spending of US$8.94bn by the Philippine government.
There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.
The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).
One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.
Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.
Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.
Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.
Philippines: Holcim Philippines has announced that it may delay the construction of a proposed US$550m 2.5Mt/yr capacity cement plant in Bulacan province that was due for commissioning in 2016.
The announcement was made due to the impending economic integration of the Association of Southeast Asian Nations in 2015. Southeast Asian countries, including the Philippines, will eliminate tariff rates on goods to facilitate free flow of commodities under the Asean Free Trade Area.
"We have to plan as a region because the region is consolidating," said Eduardo Sahagun, Holcim Philippines chief executive, adding that Vietnam and Indonesia both possess excess capacity. Holcim Philippines made several investments in 2013 to boost supply, including plant upgrades in La Union and Misamis Oriental provinces and the revival of a grinding facility in Mabini, Batangas, which will be operational by the third quarter of 2014.
Sahagun said that the company's outlook on cement demand in the country remained positive. "The growth scenario is the same but where the supply will come from will change," Sahagun said.
Philippines: Lafarge Republic plans to build a 0.85Mt/yr grinding plant for its Norzagaray cement plant to meet increased cement demand. The grinding plant will be commissioned in the second quarter of 2015.
The new grinding plant is intended to supplement the output of a new mill at its Teresa cement plant in Rizal province, which due to be commissioned in the first quarter of 2015. The Teresa mill is expected to have an investment of at least Euro25m and will have a production capacity of 0.85Mt/yr.
The two mills will increase Lafarge Republic's cement production capacity to 6Mt/yr. Lafarge manufactures the cement brands Portland, Pozzolan and Type 1P. It sells its products in 40kg bags or in bulk at 800kg and 1000kg per load in bulk carriers.