Displaying items by tag: Philippines

Philippines: Japan-based Taiheiyo Cement has underwritten a US$250m capital increase for its subsidiary Taiheiyo Cement Philippines. Nikkei Business Trends News has reported that the company has scheduled six payments between July 2021 and January 2024. The funding will increase Taiheiyo Cement Philippines’ total capital to US$291m.

Philippines: Holcim Philippines plans to invest US$4.18m in upgrades to its cement plants at La Union, Bacnotan, and Lugait, Misamis Oriental to improve business and sustainability performance.

The subsidiary of Switzerland-based Holcim held a ceremonial signing ceremony on 7 July 2021 to award the contract to Sinoma CBMIPH Construction to install a drying facility at the La Union plant. The project is intended to reduce the fuel consumption of the unit by reusing hot gases from operations to dry materials. The integrated plant was recently awarded an ISO 45001:2018 for Occupational Health and Safety Management System and recertified for ISO 9001:2015 (Quality Management System) and ISO 14001:2015 (Environmental Management System) by certification body TÜV Rheinland. Holcim Philippines has also contracted Sinoma CBMIPH to install a drying facility at its Lugait plant that will reduce moisture of raw materials to improve grinding operations. The La Union and Lugait projects are scheduled to be completed in the first quarter of 2022 and by the end of October 2021 respectively.

In January 2021, Holcim Philippines also started projects worth US$2.42m to raise the efficiency of converting qualified waste materials to alternative fuels of its cement plant in Bulacan, Norzagaray. These will enable its Geocycle subsidiary to support the Bulacan plant to increase its thermal substitution rate by using more post-consumer and municipal solid wastes as alternative fuels.

Philippines: China-based Sinoma Construction will renovate Holcim Philippines’ La Union cement plant in Bacnotan, North Luzon. Seetao News has reported that the company signed a contract with the subsidiary of Switzerland-based Holcim in July 2021. The work involves a capacity expansion, renovation and de-bottlenecking. The aims of the projects are to promote the modular grinding station market and expand Holcim’s Philippines business and deepen its localisation.

Philippines: The Department of Trade and Industry (DTI) has launched a new investigation into imports of cement, currently subject to safeguarding tariffs of US$0.20/bag. The investigation follows a request by Cemex Philippines, Holcim Philippines and Republic Cement. The Viet Nam News newspaper has reported that the Vietnam National Cement Association has asked the DTI and the Philippine cement industry to consider whether imports from Vietnam did real damage. In 2020, Vietnam’s export cement prices fell by 15% year-on-year. Its excess production of cement was 36Mt during the year, and its clinker prices were 20% below the regional average.

Philippines: Holcim Philippines says it is focusing on sustainability and invocation to its customers. At a virtual conference held in mid-June 2021, the building materials producer said that it is using more alternative low-carbon fuels and developing new products that contain less clinker. It added that builders could improve their carbon footprint by ensuring that structures are made with the right materials to meet strength and durability requirements without being overdesigned and that hardware stores could play a role in guiding customers to the correct building materials for their projects. The company is also working on its digital platforms to make customer transactions smoother.

“With our commitment to sustainability and innovation, we will develop the next generation of building materials that will help the country build better for the future. We want to continue to strengthen our collaboration with our customers to raise consumer awareness that these products support their aspirations for a greener and healthier Philippines," said Horia Adrian, Holcim Philippines’ president and chief executive officer.

Fernando A González and Cemex took to the virtual airways this week with Cemex Day 2021. The investors’ update comprised the usual greatest hits package explaining how well everything is going: earnings growth and leverage levels about to hit desired targets, selective investments and divestments on the way, new production capacity round the corner and punchy sustainability goals turning up earlier than expected. Or at least that’s the way that chief executive officer González and the team told it.

To be fair to Cemex, it seems to be in a good place right now. It weathered 2020 well and now its first quarter results in 2021 compared to the same period in 2019, before coronavirus hit, are looking rosy with cement sales volumes growth of 9%. How much of that is attributable to pent up demand from 2020 remains to be seen though. Its strategy of focusing on markets in North America and Europe appears to have paid off in recent years with its competitors copying it as they have retreated from riskier climes and concentrated on core territories. Its obsession with righting the ratio between its debts and earnings is closer than ever to being realised, with a 4.07x net leverage ratio in 2020 and a target of 3x or lower planned for 2023. That last target is crucial both materially and psychologically for the company as it starts to put it back in the same financial field as its Western multinational competitors and opens up new investment opportunities.

From a production angle, the big news from the event was a 10Mt/yr cement production expansion project between now and 2023. This wasn’t quite as promising as it sounded, as just under half of this was attributed to legacy projects in Mexico, Colombia and the Philippines and some of the new projects had already been announced, but it does bookmark a move from divesting plants to upgrading and building new ones.

The new projects comprise an additional 5.7Mt/yr capacity from on-going debottlenecking, new integrated plants, new grinding plants and reopening idle or mothballed plants. During the event José Antonio González, the Executive Vice President of Strategic Planning & Business Development broke it down into 3.5Mt in Mexico, consisting of 1.5Mt additional grinding capacity at the integrated Tepeaca plant, a 0.5Mt/yr expansion at the integrated Huichapan plant and 1.5Mt/yr from bringing both idled lines back into production at the CPN Hermosilla plant in Senora to support the US market. That last one notably was partly announced in February 2021. In Europe and the US the group plans to add 1.2Mt/yr including expanding grinding capacity at two plants in Europe with details to be announced later. Finally, the company plans to add 1Mt/yr of additional capacity in South American including restarting an idled 0.5Mt/yr kiln at a plant in the Dominican Republic and building a new 0.5Mt/yr grinding mill in Guatemala.

Cemex has also stepped up its target reduction in CO₂ emissions to below 475kg CO₂/t of cementitious material, an approximately 40% reduction in CO₂ emissions compared to 1990 levels, by 2030. The previous target for 2030 of 520 kg CO₂ has been brought forward to 2025. This compares to LafargeHolcim’s similar target of 475kg CO₂/t by 2030, HeidelbergCement’s target of 500kg CO₂/t by 2030 and CRH’s target of 530kg CO₂/t by 2030. The group is planning to spend US$60m/yr on its decarbonisation projects. This compares to a spend of around US$140m/yr on its 10Mt/yr cement production capacity expansion drive over the next three years. Or to put it another way, the group is spending more on growing than sustainability.

Unfortunately, it wasn’t all good public relations for Cemex this week with the news in the Colombian press that one of its former executives is set to be investigated by the authorities over his alleged involvement in the ongoing Maceo cement plant corruption case. The background to this one is that in 2016 Cemex fired several senior staff members, and the local subsidiary’s chief executive resigned, in relation to the building of a new integrated plant at Maceo. This followed an internal audit and investigation into payments worth around US$20m made to a non-governmental third party in connection with the acquisition of the land, mining rights and benefits of the tax free zone for the project. Legal proceedings followed in Colombia and the US. Many large companies have legacy problems to deal with. Just take LafargeHolcim’s continued connection to Lafarge Syria’s conduct in the early 2010s. At the time of writing the Maceo plant is still yet to start operation and is likely to be one of the ongoing projects mentioned above.

Cemex’s second quarter results are due to arrive towards the end of July 2021 but the group is presenting an upbeat image. Sales are up, debts are down, divestments are out and expansions are in. Confidence is important for a multinational trying to convince the rating agencies to give it back its investment grade, so whether this is strictly true or not it certainly knows how to talk the talk. One question going forward at least is how strictly Cemex will want to stick to its core markets if the good times really have returned?

Mexico: Cemex says that it will invest US$925m in 2021 – 2023 in production capacity expansions and upgrades, as well as in other projects to improve financial margins. Chief executive officer Fernando González said at its Cemex Day 2021 business update that the group is planning a 10Mt/yr cement capacity expansion consisting of an extra 7.5Mt/yr in the Americas, 1.5Mt/yr in the Philippines and 1.0Mt/yr in Europe. It expects a total increase in 2023 full-year profit of US$520m as result of the investments. Around US$425m will be spent on the cement capacity additions and the remainder will go towards projects on urbanisation and its other business lines.

Strategic planning and business development executive vice president José González said “We focus on high-growth metropolitan areas, where our products and solutions nurture the urbanisation needs of these markets. These areas represent around 70% of the population and around 80% of the gross domestic product (GDP) of construction.”

Vietnam: Vietnam’s cement exports totalled 14.9Mt in the first four months of 2021, up by 42% year-on-year from the levels in the corresponding period of 2020. China imported 7.38Mt (50%) of Vietnamese cement exports, up by 53% year-on-year. The Philippines imported 2.51Mt (17%), up by 17%, and Bangladesh imported 1.87Mt (13%), up by 38%.

The Viet Nam News newspaper has reported the total value of Vietnamese cement exports for the period as US$563m. China’s value of Vietnamese cement imports was US$258 (46%), the Philippines’ was US$112m (20%) and Bangladesh’s was US$63.1m (11%).

Indonesia: The newly cement producing province of North Sulawesi on Celebes exported 63,000t of cement in May 2021. The Philippines News Agency has reported the value of the exports as US$2.18m. The main destination for the province’s exported cement was Malaysia, which received 32,500t (51%) for US$1.10m, corresponding to 50% of the total value. Taiwan imported 23,500t (37%) for US$764,000 (35%) and the Philippines imported 1.87Mt (13%) for US$317,000 (15%).

Philippines: CRH and Aboitiz Equity Ventures subsidiary Republic Cement and Building Materials plans to roll out a quality control system to detect product quality across all of its cement plants by 2022. Business World News has reported that the company currently uses data science-based techniques at three sites. It says that it uses the method to predict the 28-day compressive strength without moulding and curing of a batch of cement.

Manufacturing vice president Lloyd Vicente said that with accurate predictions, “our operations can make it quick and precise adjustments to our recipe and other operating parameters, therefore reducing our CO₂ emissions.”