Displaying items by tag: Eagle Cement

Philippines: Eagle Cement hopes to open the third production line at its Bulacan cement plant by 2018. The new line will keep the cement producer on track to lead locally in terms of cement production capacity by 2020, according to the BusinessWorld newspaper. The new line will add 2Mt/yr to the plant’s capacity, increasing it to 7.1Mt/yr. Funding for the new line has been completed. Eagle Cement is also planning to start building a new plant at Cebu by the end of 2017. This plant is scheduled to start production in 2020.

Philippines: Eagle Cement is planned an initial public offering (IPO) of US$183m to partly pay for a US$249m cement plant it wants to build in Cebu. The plant will have a cement production capacity of 2Mt/yr when complete, according to the Philippines Star newspaper. The project will also include building a distribution centre and marine terminals in Southern Luzon, Visayas and Mindanao regions. Additional financing will be sourced though debt funding and internal sources. Construction is scheduled to start in the fourth quarter of 2017 and the project is anticipated to be finished in the first quarter of 2010.

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?

Philippines: Eagle Cement plans to hold the groundbreaking ceremony for its 2Mt/yr plant at Davao on 20 October 2016. The US$300m project is intended to meet demand from infrastructure development near Manila, according to the Philippines News Agency. Ramon S Ang, the owner of Eagle Cement, said that the construction of the plant is part of a plan he announced earlier in 2016 for the cement producer to help support the country's growth while strengthening its position in the industry.

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.

Philippines: San Miguel Corporation will invest US$1bn to build five new cement plants in different parts of Luzon, Visayas and Mindanao. The amount is higher than the earlier announced US$800m due to the addition of three new cement plants to the two previously disclosed facilities.

San Miguel president and COO Ramon Ang said that the five new plants would have a total capacity of 10Mt/yr, 2Mt/yr at each plant. The plants are expected to be operational in 2017. The projects will be undertaken by affiliates Northern Cement and Eagle Cement in Pangasinan, Bulacan, Quezon, Cebu and Davao. San Miguel owns a 35% stake in Northern Cement, while Eagle Cement is privately-owned by Ang.

Ang said that now is a good time to invest in cement because a lot of people are investing in real estate. He added that if ever there were ever oversupply, the market would correct in two to three years. The additional 10Mt/yr capacity would bring San Miguel's cement capacity to roughly 16Mt/yr. Ang said that the cement industry of the Philippines currently has 33Mt/yr of cement capacity, which would increase to 43Mt/yr once San Miguel's new cement plants are in place.

Philippines: Eagle Cement plans to build its production capacity with an investment of US$1.2bn. Owner Ramon S Ang revealed to local media that he intends to build two new 2Mt/yr cement plants at Cebu and Davao in 2015. In addition the company is also adding one more line with a 2Mt/yr production capacity to its existing cement facility in San Ildefonso, Bulacan.

"We are now finishing the second line and preparing to put up a third line. With the third Eagle line, it will be even bigger than the asset being sold by Lafarge," said Ang. Upon completion of the third line, the Bulacan plant will have a production capacity of 6Mt/yr. According to Ang, each cement line with a 2Mt/yr capacity costs US$400m.

Eagle Cement produces and distributes cement under the brands Eagle Cement Advance and Eagle Cement Strongcem.

San Miguel Corp, the Manilla based multinational for which Ang serves as president, formally entered the cement business in 2013 when it paid US$78.6m for a 35% stake in Northern Cement. The cement company with a production facility in Pangasinan has a capacity of 2Mt/yr.

US: Eagle Materials has reported financial results for the second quarter of fiscal 2014, which ended 30 September 2013. Total revenues were up by 53% to US$252.6m. Earnings before interest and income taxes (EBIT) were US$63.5m, an increase of 114% compared to the same quarter of the prior fiscal year.

Sales volumes were improved across all lines, with cement sales volumes of 1.4Mt providing earnings of US$32.4m, an 86% increase from the same quarter of fiscal 2013. The earnings increase resulted from increased sales volumes and average net cement sales prices, which were 3% higher than the second quarter in fiscal 2013.

Philippines: The Department of Trade and Industry (DTI) has asked cement producers in the Philippines to justify recent price hikes that led prices to exceed the suggested levels set by the agency.

Trade Undersecretary Zenaida C Maglaya said the three largest cement firms in the country - Holcim Philippines, Lafarge Republic, Cemex Philippines - have started submitting documents to support adjustments in their prices. Eagle Cement is set to meet with DTI and Board of Investment (BOI) officials to explain its pricing scheme. Maglaya said one of the large cement manufacturers had made a submission but had yet to complete all requested data due to 'antitrust issues', referring to laws addressing anti-competitive behavior among corporations.

In April 2013, Maglaya said that cement companies had increased their prices due to the higher cost of coal, a raw material that accounted for about 25% of the cement industry's manufacturing costs. Holcim reportedly raised its price by 11%, Lafarge by 7%, Cemex by 15% and Eagle Cement by 5%.

In 2012, the Cement Manufacturers' Association of the Philippines (Cemap) reported record-high sales of 18.4Mt, up by 17.5% from 15.6Mt in 2011. This was due to the boom in public and private construction projects. In the fourth quarter of 2012, 4.4Mt of cement were sold compared to 4Mt in the fourth quarter of 2011.

Philippines: The National Price Coordinating Council (NPCC) in the Philippines announced on 8 April 2013 that it was concerned about rising prices for cement.

"We will be sending letters to cement producers to ask them why their prices have gone up," said Trade Undersecretary Zenaida C Maglaya in a briefing after a meeting of the NPCC. "We have to ask them the reason because it may be that they consumed more coal, which went up (in price), but there might be another reason." She added that the firms have to send in their reports within the week.

The Trade department also reported that it was investigating Eagle Cement for increasing its prices after it had agreed earlier with the government to sell lower-priced cement. The firm was granted tax perks by the government for its Bulacan cement plant in November 2006.