Cement manufacturer Holcim Philippines, Inc. (HPHI) posted record sales volumes in 2012’s second quarter due to government efforts to hasten infrastructure spending and the private sector’s steady rollout of projects.
The year’s first half has HPHI posting a net income of P2.02 billion. This is 40% higher than 2011’s numbers. Net sales rose by almost a quarter to P13.82 billion.
Holcim Philippines COO Roland van Wijnen said in a statement that the company’s performance mirrors the strong industry growth.
“We see that the government’s efforts to reform the system for public spending is contributing to a reinvigorated construction industry,” said Van Wijnen, “With strong infrastructure activities, the construction industry is again running on two legs as it did in 2010, when the construction industry contributed to strong economic growth.”
The Public Works department was earlier reported to have bid out most of its projects and released nearly three-fourths of its infrastructure budget to date.
Meanwhile, Wijnen noted that the private sector sustained its robust construction activities, particularly in the residential and commercial sectors.
Van Wijnen also said that while the company benefited from a robust market, its good performance was also the result of the company’s deliberate initiatives in customer focus, continuous improvements in its manufacturing facilities, and effective cost management.
He also stressed the important role of its manufacturing facilities in being able to consistently and reliably deliver the required volume and product quality.
However, even as it enjoyed strong volumes, Holcim Philippines continued to be challenged by high input costs, particularly power as it continues to adversely impact its financial performance.
Van Wijnen said that this is particularly challenging in Mindanao where the company operates two cement plants. To proactively address this, the company has secured contracts with power suppliers while stepping up use of alternative fuels.
Van Wijnen also expects the cyclical dip in demand in the second half of 2012 as construction slows due to rains. But he sees sales exceeding last year’s as private-public partnership projects finally start and election-related spending trickles in.
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