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Displaying items by tag: Holcim Philippines
Cement imports in the Philippines
21 August 2019Predictably, the recent investigation by the Tariff Commission in the Philippines on whether to maintain duties on imported cement recommended that the safeguard duty be kept. It even suggested raising the rate to nearly US$6/t from US$4/t at present. The report has been passed to the Department of Trade and Industry (DTI), which will make the final decision on the matter.
Graph 1: Market share of the Philippines cement industry between local producers and traders, 2013 - 2018. Source: Tariff Commission of the Philippines.
As the commission built its argument it released a great snapshot of the local cement industry and it’s well worth a read for anyone who is interested. One key graph here was the speed at which the market share of cement sold by local producers fell compared to importers from 2013 to 2018. As Graph 1 shows above, traders imported 0.29Mt in 2015 and this rose to 4.66Mt 2018. Imports by local producers also grew during this time but at a far slower rate. They were 0.45Mt in 2015, grew to a high of 1.65Mt in 2016 and then stabilised at around 1Mt/yr since then. Seven of the top 10 cement exporters were Vietnamese companies followed by two from China and one from Thailand. However, the local producers were importing clinker on a far larger scale during this period. 16.8Mt of clinker was imported from 2013 to 2018 led by Holcim Philippines with 5.54Mt or a 33% share. In Holcim’s case this was coming from China, Indonesia, Japan, South Korea, Malaysia, Thailand and Vietnam.
Elsewhere, the report established the various production capacity upgrades the local cement producers had invested in or were planning to in the near future. Taiheiyo Cement Philippines, for example, was reported as planning an expansion to its Cebu plant production line from 2022 to 2025. It then looked at kiln capacity utilisation rates, prices and how profits have changed amongst much else. It concluded that the import surge from 2015 to 2018 had depressed prices and decreased the profitability of the local producers. This fitted its definition of ‘serious injury’ as one reason to impose a safeguard duty on imports.
Importers presented a different scenario to the commission during its investigation and afterwards. Phinma, for example, told local press that the commission’s comparison calculation of the costs behind local and imported cement didn’t take into all the costs the importers endured such as a local distribution and handling once in the country. The Philippines Cement Importers Association reiterated the view of its members that they were simply meeting market demand, that local producers had caused their own problems through overcapacity and that profits varied considerably amongst local producers, amongst other arguments. This has been borne out by some of the half-year results amongst the local producers. Eagle Cement, for example, saw its earnings before interest, taxation, depreciation and amortisation (EBITDA) grow by 21% year-on-year to US$80.6m.
With the publication of the commission’s report the DTI has been handed the impetus to hold up or even raise the duty on imported cement. Based on its actions in recent years the ministry seems likely to do so. This presents a contrast to Trinidad & Tobago where importer Rock Hard Cement won a legal battle earlier in August 2019 against competitor and Cemex-subsidiary Trinidad Cement over the classification of imported cement products. These kinds of trade conflicts are likely to proliferate whilst global production capacity outstrips demand but the outcomes may vary.
Holcim Philippines promotes retail mobile app
17 July 2019Philippines: Holcim Philippines is promoting its retail mobile app called Easybuild. It is intended to allow customers to place orders, check delivery status and review account history and credit, among others functions. The company has initially partnered with leading financial institution Metrobank for an online payment facility. Nearly 700 customers are using the system. It is the latest version of Holcim Philippines’ online customer service portal, which it pioneered in the cement industry in 2001. Already available for the Android operating system, an iOS version will be launched in August 2019.
Philippines: Holcim Philippines has completed the upgrade to its integrated cement plant at Davao. The expansion involved the activation of a finish mill and installation of a new pipe for loading cement to the silos from the pier, eco-hoppers to improve dust emissions and an overhead crane. Cold commissioning started in April 2019 while full production began in late June 2019. The improvements add 0.7Mt/yr to the cement production of the plant.
The expansion of the Davao plant is part of the company’s on-going program to improve operations to better support the positive growth of Mindanao. In March 2019, the company launched in a new blended cement product, Solido. It also opened its first construction laboratory outside Metro Manila at Davao in 2018. Holcim Philippines will hold a ceremony in August 2019 to inaugurate the facilities with partners from the public and private sector.
Philippine Competition Commission to keep review of Holcim Philippines divestment separate from competition probe
12 July 2019Philippines: The Philippine Competition Commission says that its investigation on alleged violations of competitive practice by the cement industry will be kept separate from a review of the acquisition of Holcim Philippines by San Miguel Corporation. The commission made the statement in a reply to questions raised by consumer group Laban ng Konsyumer, according to the Manila Bulletin newspaper. However, the commission’s Mergers and Acquisitions Office said that, although both cases are being considered independently, this would not preclude them from considering the pre-merger activities of the companies.
South Africa: PPC has appointed Roland van Wijnen as its chief executive officer (CEO). He succeeds Johan Claassen, who announced his retirement in November 2018. Van Wijnen has signed a four-year contract and is expected to take up the position as soon as he secures a work permit.
Van Wijnen has worked for Holcim and LafargeHolcim for 17 years in various leadership positions across the group including the CEO of Holcim Philippines. He also worked in South Africa for the business before it left the territory. He is an Industrial Engineering graduate from the University of Twente in the Netherlands.
Cement producers in the Philippines warn that unchecked imports may affect investment plans
28 May 2019Philippines: Cement producers say that if the government does not implement a permanent safeguard duty on cement imports they may reconsider investment plans to upgrade their plants. Representatives of Taiheyo Cement, Republic Cement, Holcim and Cemex made the comments at public hearings by the Tariff Commission, according to the Philippine Star newspaper. The commission is conducting an investigation to determine whether the provisional safeguard duty imposed by the Department of Trade and Industry (DTI) on cement imports should be kept.
During the hearings, Cirilo Pestaño II the executive director of the Cement Manufacturers Association of the Philippines (CEMAP), lobbied the government to impose a higher ‘definitive’ safeguard duty. He said that imports of cement rose by 64% year-on-year to 1.74Mt in the first quarter of 2019 from 1.06Mt in the same period in 2018 despite the provisional safeguard measure being in place.
Philippines: The Department of Trade and Industry (DTI) expects San Miguel Corporation’s acquisition of a majority stake in Holcim Philippines to reduce the price of locally produced cement. Trade Secretary Ramon M Lopez said that he expected operational synergies and economies of scale to ‘hopefully’ bring down prices, according to the BusinessWorld newspaper. He also noted that import duties on imports of cement could also provide a ‘healthy competitive environment.’
San Miguel Corporation agreed to purchase LafargeHolcim’s 85.7% share in Holcim Philippines in early May 2019. The deal is expected to be completed by the end of 2019.
Philippines: Holcim Philippines has ordered power monitoring equipment from CMR Philippines for its 2.3Mt/yr Lugait cement plant in Misamis Oriental. It includes the development, delivery, installation, testing and networking of the electrical installation at the unit. Current and voltage transformers are to be supplied as part of a package of engineering support that also sees CMR completing the integration and connection of plant wide power monitoring to Siemens PCS 7 process control technology.
“Winning the Holcim contract reflects the expertise we can bring to successfully delivering complex and technologically advanced industrial projects,” said Rojel Rivera, general manager at CMR Philippines.
CMR Philippines is part of the CMR Group, which designs, manufactures and commissions automation, control system and turnkey project solutions for global industrial and renewable energy sectors, alongside specialist instrumentation for high power diesel engines.
Holcim Philippines approved to build new plant
29 March 2019Philippines: Holcim Philippines plans to build a new cement plant in Bulacan province have been approved by the Board of Investments. The 2.5Mt/yr Bulacan Line 3 plant is part of the company US$300m investment drive to increase its production capacity by 30% by 2020, according to the Manila Times newspaper. The approval also grants the projects tax incentives covered by the government’s investment code.
Holcim Philippines launches new blended cement product
18 March 2019Philippines: 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.