Displaying items by tag: Philippines

Philippines: Lafarge Republic plans to increase its production capacity by roughly 1Mt/yr starting in 2013 to meet strong public and private sector demand for cement in the Philippines.

The firm, whose production capacity was reported at 7.7Mt/yr in early 2011, said it will be refurbishing its grinding plant in Danao, Cebu and the mill at its plant in Norzagaray, Bulacan, yielding a capacity of 650,000t/yr in Visayas, as well as another 200,000t/yr in Luzon and 100,000t/yr in Mindanao.

"Based upon the strong demand growth for building materials during the first half of 2012 and our understanding of the order backlog of construction projects for the leading construction companies, we expect another year of sales and earnings growth in 2013," said Dong H Lee, country chief executive of Lafarge in the Philippines.

Philippines: Ongoing construction demand from 2011 and new infrastructure projects have driven cement sales in the Philippines up by 20% in the first half of 2012, according to data from the Cement Manufacturers' Association of the Philippines (CEMAP). Cement sales from January to June in 2012 reached 9.55Mt, up by about 20% year-on-year.

CEMAP president Ernesto Ordoñez attributed the sales increase to higher infrastructure spending. In 2011 the government deferred the implementation of various projects for review. This resulted in a drop in demand for construction materials, including cement. The implementation of these projects, on top of infrastructure projects lined up for 2012, have increased demand for construction materials.

Cement sales, according to CEMAP, are expected to remain strong for the rest of 2012. The local industry reported combined sales of 15.6Mt in 2011. CEMAP includes cement producers Cemex Philippines, Holcim Philippines, Lafarge Cement Services, Northern Cement, Pacific Cement and Taiheiyo Cement Philippines.

Philippines: Holcim Philippines is preparing a US$9.46m upgrade of its formerly closed Batangas mill to meet an anticipated rise in demand in Southern Luzon.

Upon its reopening in 2013, the grinding plant in Mabini, Batangas with an existing capacity of 7.7Mt/yr will have an additional 500,000t capacity. The mill had been decommissioned in 2003 amid weak cement demand.

"South Luzon is one of the fastest-growing areas in the country and we expect this growth to continue, fuelled by both public and private construction. We want to be sure we have the facilities ready to deliver volumes when and where these are needed," said Roland van Wijnen, Holcim chief operating officer said in the statement.

Holcim's Mabini plant will be its second facility in Batangas after the company's Calaca terminal, which the company reopened in 2011 in a bid to serve the southern Luzon market and facilitate cement transfers from Mindanao to Luzon, where demand is highest.

"Having facilities across the country from north Luzon to Mindanao gives Holcim the strong advantage of being near its markets. Our Mabini facility will help further strengthen the capability and accessibility in bringing our products to where our customers are," van Wijnen said.

Philippines: Cement producers in the Philippines are raising their prices, as increases in fuel prices have not shown any sign of abating and the peak of the construction season is starting.

Trade and Industry Undersecretary for Consumer Welfare Zenaida C Maglaya said, that based on the Price Monitoring report released on Friday 23 March 2012, prices of two brands of cement Republic (Lafarge) and Rizal (Cemex) had increased. However, the price of Holcim Philippines Inc. dropped by 2.5% from February to March 2012. In June 2011 Holcim raised its prices by 6% in Luzon. The three global firms dominate the Philippine industry.

Cost of power and coal accounts for 40% of a cement company's total production expenses in the Philippines. Most of the cement firms source their coal supply from Semirara Coal Corp. Construction activities are higher during the summer months, normally starting early in the year and peaking in May.

Construction activity was fuelled by private sector spending in 2011, as the government did not spend much on infrastructure projects. However the Aquino administration has started accelerating investments and implementation of major infrastructure projects in 2012. Both infrastructure and private sector investments in property developments, including housing and commercial establishments, are expected to boost demand for construction materials, including cement.

Philippines: Holcim Philippines expects a modest growth rate of 5-6% in 2012 as it attempts to recover from a steep drop in net profit in 2011, according to its chief operations officer Roland van Wijen.

The Philippine subsidiary of Switzerland-based Holcim Ltd posted a net profit of US$47m in 2011, down by 47.1% from US$90m in 2010 because of weak demand and higher production costs. Sales revenues dropped 9% to US$496m due to a surge in prices of coal and electricity, the biggest cost components in cement production.

"Last year was a challenging year for us because reduced government spending meant that there was less structure built, which has a direct correlation to cement consumption. Also, the (operational cost) has been increasing which had a marked effect on our bottom line. Those are the elements we are recovering from," Van Wijnen said at the launch of Holcim's new CSR project. He added that the company is currently cutting production cost by stepping up the use of waste materials as an alternative to coal.

Holcim Philippines currently has a market share of one third of the cement industry and at present the company has no plans of expanding its market share. "We will go there when our customers want us to go. Right, now, the market has an over-capacity so significantly increasing our market share will not contribute to growth," Van Wijnen said.

Van Wijnen said the company's growth would be greatly driven by more projects that would be approved under the government's Public-Private Partnership (PPP) scheme. The company is pursuing opportunities for supplying winning bidders in the PPP projects. Van Wijnen said the company is optimistic that both the government and the private sector would increase infrastructure spending this year.

With a workforce of over 1700, Holcim Philippines operates four plants in La Union, Bulacan, Misamis Oriental and Davao. In January 2012 Holcim reopened its cement plant in Calaca, Batangas, to take advantage of an anticipated surge in demand for new buildings and infrastructure in Metro Luzon.

Philippines: Cement producers in the Philippines have asked the Department of Trade and Industry (DTI) to impose mandatory standards on the raw materials used to ensure that quality standards are being followed. These standards would also effect producers of finished products that make significant use of cement. DTI Undersecretary for consumer welfare, Zenaida C Maglaya, made the announcement following a recent meeting of Cement Manufacturers Association of the Philippines (CeMAP).

According to Maglaya, CeMAP would like raw materials such as fly ash and aggregates to be placed under mandatory standards following complaints from contractors working on infrastructure projects. CeMAP said it will take years to find out the impact of poor quality fly ash. "We are asking CeMAP to submit their study because this is a technical issue," Maglaya said.

Maglaya explained that the standards for raw materials for cement are voluntary under the Philippine law. Being voluntary, Maglaya said, the responsibility lies on the end manufacturer although this can still be raised before the DTI. The move to standardise raw materials of cement and end-products using cement has followed a crackdown by the Department of Public Works and Highways against contractors of government infrastructure projects.