Holcim Lanka expands capacity, eyes new product launch
Holcim Lanka, the cement manufacturer with nearly 40 per cent market share, is currently expanding to the North and East in addition to capacity enhancements through its Galle factory and new product launch by the end of this year.
With a current demand of five million tonnes in the country the company forecasted that over the next 10 years they expect a 6-7 per cent growth based on the new ongoing infrastructure development and tourism and commercial constructions, Holcim Lanka CEO Phillipe Richart told a media discussion in Colombo. The company sold 1.5 million tonnes of cement in 2013.
Holcim International Group CEO Bernard Fontana, currently visiting Sri Lanka, said they would be increasing capacity through the cement grinding factory opened at Ruhunu Cement Plant from 0.6 million MT to one million MT annually with an investment of approximately US$6 million for the modernization of the plant. This cement grinding factory was already in operation and it operates a fully integrated cement plant in Puttalam.
The company has invested $22 million in its Galle operations to increase the manufacture in a bid to fully localize the cement production resulting in total self-sufficiency for the country, it was noted.
The company’s Corporate Functional Manager Aidan Lyman told reporters that they were confident of the organisation’s stability in the country, saying “Sri Lanka is a place where there is no issue on our assets”.
In addition the company would be investing a further $4 million in its Geocycle venture aimed at bringing about environmental sustainability.
The Geocycle shredding line would enhance waste management solutions together with upgrading the kiln system, building up clinker warehouse to better cater to the market demand with uninterrupted supply, process efficiency improvement in sludge drying facility.
Mr. Fontana would be meeting with Economic Development Minister Basil Rajapak- sa and was scheduled to open the additional facility at the Ruhunu Cement plant and also meet with the employees of the company. Discussions with the minister would focus on the company’s investments and long term strategies, it was noted.
Increasing capacity was carried out in a bid to reverse the risks faces in 2009 when cement in the market was completely sold out. The company believes that capacity enhancement would enable them to reverse this, Mr. Richart said.
Holcim Lanka has not increased its prices since 2012. It was noted that prices were not increased even when big projects and infrastructure development in the country increased and there was a demand drop last year.
Mr. Richart speaking with the Business Times said that since the organization’s presence in the country it had tripled its capacity from 0.5 million MT to 1.4 million MT and that today they were seeing more growth and efficiency.
In addition, he noted that they were currently aiming at increasing their opportunities by expanding geographically with a greater presence in the east and the North. In this regard, Mr. Richart explained they were looking for more distributors in Jaffna and the East.
He found Sri Lanka’s growth more steady compared to its counterparts in the region, the latter who were notably more bumpy. Holcim Lanka was currently also working on targeting the development of a precast concrete for which product testing and market feasibility was being carried out.
He explained the company would be launching the new product by last quarter of this year and in this regard they were working with technical experts in Switzerland.
Currently Holcim Lanka is marketing four cement ranges based on customer requirements namely application based product Sanstha and Ambuja; Readyflow for infrastructure projects; and Holcim Extra, bulk cement for large scale infrastructure projects in more aggressive environments.