Holcim Phils. expands capacity despite lower sales

Holcim Philippines, Inc. is investing R2.73 billion in the next two years to continue raising its cement production capacity even though net income and revenues continue to soften in the second quarter of the year.

In a disclosure to the Philippine Stock Exchange, Holcim said it is boosting capacity from its current 10 million metric tons to 12 million metric tons to support demand as the government rolls out its flagship infrastructure projects.

Holcim Philippines President Sapna Sood said the investments show the company’s continued commitment to the development of the country and to serving its customers better.

“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,” she said.

Sood said “the company will invest $54 million in the next two years to add two million metric tons to its current cement capacity by the first half of 2019, particularly in La Union and Davao.”

“This investment continues the Company’s successful debottlenecking of all sites in 2016 that already raised cement capacity to 10 million metric tons from 8.5 million,” she explained.

The second quarter environment was softer compared to last year’s where volumes were significantly higher due to pre-election infrastructure spending.

Holcim Philippines’ second quarter revenues reached R8.6 billion, lower than the R10.8 billion reported in the same period last year.

From January to June 2017, the Company booked R17.4 billion in revenues compared to R20.9 billion in the previous year. Revenues were impacted by a combination of lower volumes and a dynamic price environment.

EBITDA for the quarter was R1.9 billion, lower than the R3.3 billion achieved in the same period last year while net income stood at R1.2 billion compared to R2.2 billion last year.