The Philippines subsidiary of Switzerland-based Holcim has disclosed plans to build a $500 million cement plant as part of options to cash in on expected resurgence of demand in the coming years.
Although it expects local cement volume sales to expand by a "moderate" pace of about 3 percent to 5 percent this year, Holcim Philippines sees demand beyond 2011 to jump owing to new opportunities in infrastructure and private construction activities.
Holcim Philippines, which owns four cement production facilities and grinding mill, now operates at close to its rated capacity of 7.8 metric tons of cement and 6.5 million metric tons of clinker per year. The company claims a 33 percent share of the Philippine cement market.
Roland van Wijnen, Holcim Philippines chief executive officer, says that after this year's "slower pace" due to lower public sector spending, cement demand would get a new boost from infrastructure projects under the government's public-private partnership initiative.
Holcim Philippines has allocated one billion pesos (US$23.2 million) for capital spending this year to take advantage of the projected sales growth.
For the coming years, the company looks at either restarting idle assets or building new capacity, Van Wijnen said.
Local media reports quoted him as saying that this early Holcim Philippines was preparing for the possibility it "might have to build a new plant to serve bigger volumes over the medium term."
Reporting on 2010 results, the official said Holcim Philippines a net income of 3.84 billion pesos, higher by a slower rate of 23 percent compared to the previous year's 142 percent rise.
Increased power costs pared margins, it was reported further, prompting the company to look at more economical usage of plants and generating more power from waste materials.
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