The Consunji Group has initiated synergy efforts with its recent acquisition, Cemex Holdings Philippines Inc. (CHP), starting with an electricity supply agreement.
CHP said in a disclosure to the stock exchange Monday the board of unit APO Cement Corp. entered into an electricity supply agreement with Sem Calaca Res Corp.
Under the agreement, Sem Calaca, the retail electricity supply arm of Consunji-owned Semirara Mining and Power Corp. (SMPC), will provide electricity to APO’s cement plant facilities in Naga, Cebu.
The agreement is set to expire on Dec. 25, 2024.
DMCI Holdings Inc., a diversified engineering conglomerate, signed an agreement in April to acquire 100-percent interest in Cemex Asian South East Corp., which owns 89.86 percent of CHP.
DMCI said the acquisition would provide synergies with the group, which has investments in coal mining, power generation, construction and property development.
CHP, the Philippines’ fourth-largest cement manufacturer, reported losses of P1 billion in 2022 and P2 billion in 2023, attributed to escalating costs and reduced sales volume.
DMCI, however, unveiled its strategic plan to revitalize the cement firm.
SMPC also expects coal sales to CHP to increase by 227 percent to 500,000 metric tons annually.
The integrated energy company can also supply CHP with 50 megawatts of electricity and fly ash.
Based on historical consumption patterns, DMCI and DMCI Homes are estimated to source around 400,000 metric tons of cement from CHP.
The volume has the potential to expand further, subject to growth in DMCI’s order book and a recovery in DMCI Homes’ project launches.
CHP is also in the process of constructing a 1.5-million-ton integrated cement production line at its Solid Plant in Antipolo, Rizal.
The expansion will effectively double the company’s cement production capacity in Luzon. It will also boost CHP’s overall installed annual production capacity by 26 percent from 5.7 million tons to 7.2 million tons.
The new cement production line is scheduled to commence operations by September 2024.
