Cement manufacturer Holcim Philippines Inc. said Wednesday it will invest $54 million over the next two years to expand production to 12 million metric tons from the current 10 million MT.
The company said the investment would support the Duterte administration’s “Build, Build, Build” program.
“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,” Holcim Philippines president and chief executive Sapna Sood said.
“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 said.
The expansion is also expected to strengthen its position as the leading cement company in the Philippines.
Other cement firms such as Eagle Cement Corp. of businessman Ramon Ang and Republic Cement of the Aboitiz Group were also expanding current capacities on expectations that demand would increase over the medium term with the government’s rollout of flagship infrastructure projects.
Holcim Philippines said net income in the second quarter fell 45.4 percent to P1.2 billion from P2.2 billion a year ago, on weak volume and decline in cement prices.
Second-quarter sales slid 20.4 percent to P8.6 billion from P10.8 billion the previous year.
The company’s second-quarter performance brought total income in the first half to P3.7 billion, down 43.2 percent from P2.1 billion reported in the first half of 2016.
First-half sales went down by 17 percent to P17.4 billion from P20.9 billion a year earlier, arising from combined effects of lower sales volumes and price.
“Soft market demand in the first of the year coupled with a challenging price environment adversely impacted sales performance during this period,” Holcim Philippines said.
The company said its financial position remained healthy with very liquid cash position and strong asset utilization rate.
Aside from raising its cement production capacity, Holcim Philippines is introducing more innovative building solutions and services to help the country build faster, cost effectively and sustainably.
The cement firm is currently implementing 24-hour deliveries to key customers in Luzon, with those in the rest of the country to follow within the year, for immediate product availability for new homes, farm-to-market roads, new highways and essential infrastructure.
Share price Holcim Philippines closed lower by P0.06 to P13.48 Wednesday.