Holcim Philippines to invest $54M in next 2 years

HOLCIM Philippines, Inc. is investing $54 million over the next two years to increase its capacity in order to support the government’s flagship infrastructure projects.

“The company will invest $54 million in the next two years to add two million metric tons (MT) to its current cement capacity by the first half of 2019, particularly in La Union and Davao,” Holcim Philippines President and Chief Executive Officer Sapna Sood said in a statement released on Wednesday.

This will bring Holcim Philippines’ total capacity to 12 million MT.

“Our investments assure that Holcim Philippines will continue to provide a reliable supply of an essential building material as cement demand increases in the country as these projects come on stream,” Ms. Sood said.

The Duterte administration is looking to spend P860.7 billion on public infrastructure projects this year, which forms part of a grand P8.4-trillion spending plan until 2022 as part of the government’s “Build, Build, Build” initiative.

Meanwhile, Holcim Philippines reported a 46% drop in net income to P1.16 billion in the second quarter, from P2.1 billion reported during the same period in 2016, due to softer demand for cement. Revenues dipped by 21% to P8.5 billion during the April to June period, from P10.8 billion a year ago.

This pushed first-half earnings 43% lower to P2.1 billion, from P3.7 billion during the same period a year ago. Revenues also fell 17% to P17.4 billion.

“Lower income was mainly due to lower sales as well as higher production input costs. The Company has implemented various company-wide initiatives to further improve operational efficiency,” the company said.

The company also noted a “softer” environment compared to last year, which was characterized by higher infrastructure spending due to the pre-election season.

Holcim Philippines is a member of the LaFargeHolcim group, the world’s leading firm in the building materials industry which is present in 80 countries.

Shares in Holcim Philippines were down by six centavos or 0.44% to P13.48 apiece at the Philippine Stock Exchange on Wednesday.