Displaying items by tag: Holcim Philippines

Philippines: Holcim Philippines has launched a new blended cement product called Solido. It is intended to produce concrete that is better than that made from Ordinary Portland Cement (OPC) in terms of durability and compressive strength. The product is also more environmentally friendly than OPC as it uses less clinker. The cement producer is also offering technical training, test and field support to potential users. It says it has launched the product to support the country’s construction boom.

Philippines: Companies including Japan’s Taiheyo Cement, Thailand’s Siam City Cement and China’s Anhui Cement have been linked to the sale of Holcim Philippines. Local companies include Eagle Cement and DMCI Group, according to sources quoted by the Philippine Star. Non-binding offers were have been submitted in February 2019 but it is not clear which companies were involved. However, no agreement has been reached on price yet. LafargeHolcim has reportedly looking at selling its business in the Philippines as part of a review of its operations in South-East Asia.

Philippines: Eagle Cement says that it is not involved in any discussion for the acquisition of Holcim Philippines. However, it did say that its chairman Ramon S Ang had expressed interest in a potential purchase of the subsidiary of LafargeHolcim. Eagle Cement made the announcement following local media reports that Ang had formally submitted a bid to buy Holcim Philippines. In January 2019 LafargeHolcim was said to be to be considering selling its business in the country.

Philippines: Holcim Philippines has completed an upgrade at its La Union cement plant in Bacnotan. The unit now has a cement production capacity of 1.8Mt/yr from 1Mt/yr previously, according to the Manila Times newspaper. The improvements have been completed two months ahead of schedule. The upgrade is intended to support the development of North Luzon.

The expansion is part of a US$300m production capacity drive at its plants in the country. It plans to increase its national production capacity by 30% to 13Mt/yr by 2020. The second phase of the project involves installing new kilns, mills and a waste-recovery system at its plants in Bulacan and Misamis Oriental provinces.

The cement industry in the Philippines has been generating a lot of ‘steam’ in the past three months. Some of this has now come to a head in the last few weeks with the Department of Trade and Industry’s (DTI) decision to impose tariffs on imported cement and the Philippine Competition Commission’s (PCC) on-going investigation into alleged-anti-competitive behaviour. Then, there was the unnamed sourced quoted by Bloomberg this week that LafargeHolcim was seriously thinking about selling up in the country.

Resistance to imported cement has been building for a while as local producers and importers have repeatedly clashed in the media. The latest thread of this story started in September 2018 when the DTI started an investigation into imports. A review by the department found that imports grew by 70% year-on-year in 2014, 4391% in 2015, 549% in 2016 and 72% in 2017. However, the market share of imports grew from 0.02% in 2013 to 15% in 2017. This was followed by various organisations taking sides. The Philippine Constructors Association, Laban Konsyumer (a consumer group), the Philippine Cement Importers Association and others came out on the side of the importers, warning of the risk to prices and consumers if duties were implemented.

It didn’t stop the DTI though. It imposed a provisional safeguard duty of US$0.16/bag on imported cement, around 4% of the cost of a 40kg bag. The PCC then said that it was going to consider the new tariff as part of its on-going investigation. Its probe started in 2017 following allegations that the Cement Manufacturers Association of the Philippines (CEMAP), LafargeHolcim Philippines and Republic Cement and Building Materials had violated the Philippines Competition Act by engaging in anti-competitive agreements.

Amid all of this, LafargeHolcim popped up earlier this week with a news story that it was actively trying to find the ‘right’ price for its local subsidiary, Holcim Philippines. The ‘right’ price at the moment being something around US$2.5bn for four integrated plants and associated assets. That’s around US$225/t of production capacity using the total of 8.4Mt/yr in the Global Cement Directory 2019 and considering LafargeHolcim’s 75% share in the subsidiary. This is about what you’d expect, but it is certainly higher than the US$120/t LafargeHolcim has officially accepted for its divestment of its Indonesian operations.

Given the anonymous nature of the sources involved, it’s uncertain whether LafargeHolcim’s alleged intentions to sell in the Philippines is anything more than market scuttlebutt. What is more certain is that Holcim Philippines has had a tough time so far in 2018, reporting a 23% year-on-year drop in earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$64.8m in the first nine months of 2018 from US$83.9m in the same period in 2017. Sales have grown but this has been hit by the fuel, power and distribution costs as well as the depreciation of the Philippine Peso against the US Dollar. It also blamed imports for its problems. However, alongside all of this the company announced in December 2018 that it was spending US$300m towards increasing its production capacity by 30% to 13Mt/yr by 2020. This includes upgrades to its plants at Bulacan and Misamis Oriental with the installation of new kilns, mills and waste heat recovery systems.

The latest victory in the war between producers and importers seems to be on the side of the producers as the government steps in with protection for the industry. The Philippines’ economy is doing well with its gross domestic product (GDP) forecast to rise by 6.5% in 2019 by the World Bank. The trick for the government will be striking the balance between shielding industry from dumping and allowing the construction industry to keep on growing. Rumours about LafargeHolcim selling up are enticing but seem less likely than LafargeHolcim’s decision to exit Indonesia. Leaving would mean abandoning South-East Asia and exiting a country with a growing industry.

Philippines: LafargeHolcim is considering selling its subsidiary Holcim Philippines. Sources quoted by Bloomberg said that the multinational building materials producer was trying to find the ‘right’ price for the business. Holcim Philippines has been valued at around US$2.5bn. It operates integrated cement plants at La Union, Bulacan, Misamis Oriental and Davao. As part part of its ongoing portfolio assessment scheme, LafargeHolcim announced that it was selling its business in Indonesia to Semen Indonesia for US$1.75bn in November 2018.

Philippines: China’s Huaxin Cement is preparing to sign a US$245m engineering, procurement and construction (EPC) contract with Holcim Philippines to build a new production line at its Davao plant. The Kalayaan 2 project includes a 6000t/day clinker production line, a 7MW waste heat recovery unit and upgrades to a 3000t/day production line. The contract follows a previous project between the companies on a mill at the plant.

Philippines: Holcim Philippines plans to invest nearly US$300m towards increasing its production capacity by 30% to 13Mt/yr by 2020. It will upgrade its plants at Bulacan and Misamis Oriental with the installation of new kilns, mills and waste heat recovery systems. The upgrades are intended to support the country’s economic development and strong construction sector.

“Our capacity expansion ensures that we can provide a steady supply of quality building materials to support the government’s infrastructure program and the resulting construction activity from the economy’s sustained rise,” said John Stull, Holcim Philippines president and chief executive officer (CEO).

The projects are part of a series of capacity and productivity investments that Holcim Philippines started in 2012 with the rehabilitation of its grinding plant in Mabini, Batangas. This was followed by debottlenecking of plants in 2015 and expansion projects in La Union and Davao that are set to be completed in 2019.

Philippines: Holcim Philippines is promoting the use of its blended cement products by local contractors for use in road building on environmental and performance grounds. The initiative follows the government’s ‘Build, Build, Build’ infrastructure program. In July 2018 the Department of Public Works and Highways (DPWH) reported that 3945km of roads had been built by the current administration, with more projects underway until 2022.

Holcim Philippines Senior Vice President for Sales William Sumalinog said that DPWH has allowed the use of blended cement for roads since mid-2016 through Department Order 133, which amends building standards for concrete pavements that previously specified Ordinary Portland Cement (OPC). OPC has a higher clinker factor and so releases more CO₂ during production. He added that blended cement could perform better in some cases compared to OPC as it can be customised to address the specific durability challenges present in sites where structures will be built.

Sumalinog said that, since the issuance of the directive, the company has been working with its business partners and regional DPWH offices to highlight the benefits of blended cement over OPC through its engagement programs such as Holcim Building Bridges.

Philippines: Holcim Philippines is reported to be considering additional clinker lines in line with the government's ‘Build Build Build’ infrastructure initiative. The LafargeHolcim subsidiary is already in the process of undertaking national expansion from 10Mt/yr in 2018 to 12Mt/yr in 2019.