Solid Cement sets $235-M expansion to hike output 26%

Solid Cement Corporation, one of the main subsidiaries of CEMEX Holdings Philippines, Inc. (CHP), is investing US$235 million for the construction of a new integrated cement production line.

In a disclosure to the Philippine Stock Exchange, CHP said Solid has entered into the principal project agreements with CBMI Construction Co., Ltd of China for the procurement, construction and installation of the new production facility.

The 1.5 million metric tons per year expanded/new integrated cement production line will be built at Solid’s cement plant located in Antipolo City, Rizal.

The new integrated cement production line will represent a 26 percent increase in CHP’s cement capacity in the Philippines. CHP currently estimates the new line to start operations by the fourth quarter of 2020.

CHP expects that the investment in the new line could be sourced from one or any combination of the following options: Free cash flow, debt from any subsidiary of CEMEX, S.A.B. de C.V. (the ultimate parent company of CHP), debt from one or more financial institutions or proceeds from one or more capital market transactions.

CHP had reported a net loss of 535 million in the first half of 2018 from a net income of 486 million in the same period last year due to higher income taxes paid.

The firm said that, income tax expense for the second quarter alone amounted to 710 million due mainly to the utilization of the company’s deferred tax assets, which is a non-cash expense.

As a result, the company recorded a loss of 635 million during the second quarter.

Cemex said its cement volumes continued to grow in 2018 behind strong demand and improvements in production and dispatch.

Cement sales volume grew by 8 percent in the second quarter from the same period in 2017 and by 12 percent during the first six months of the year.

In terms of sales, CHP recorded 11.9 billion in revenues in the first half or 8 percent higher year-over-year.

“Our results show our ability as a company to grow together with the market and serve the increasing infrastructure demand of the country, both public and private,” said CHP President Ignacio Mijares.