Holcim Philippines Inc. said it will spend P2.7 billion to expand the capacity of its cement plant in Davao City.
Holcim said in a disclosure to the stock exchange the expansion of the Davao plant, which would boost capacity to 2.2 million metric tons a year, formed part of the company’s overall plan to raise the group’s total output to 12 million MT by 2020.
Groundbreaking for the Davao plant expansion is scheduled this month.
Holcim said it was also pursuing and developing solutions and technical services, along with clients and partners, to achieve time and cost efficiencies.
The company is pursuing the expansion plan despite posting a 58-percent decline in nine-month net income to P2.3 billion from P5.4 billion year-on-year.
Net sales in the January-to-September period reached P25.6 billion, down from P30.9 billion recorded a year ago.
Net income in the third quarter stood at P337.4 million, down 81 percent from P1.76 billion on year, as sales dropped to P8.2 billion from P10.1 billion a year ago.
The cement firm attributed the weak financial performance to tighter competition and higher production expenses
“We remain steadfast in our support for Philippine growth and in the many opportunities in the market. We note the government’s recent report that infrastructure spending has started to pick up. To this end, the transformation of our company continues in order to better serve our customers and support the development of the country,” said Holcim president and chief executive Sapna Sood.
The company is further strengthening cost management efforts through logistics excellence, renegotiation of energy and procurement contracts to improve variable costs, and fixed cost management.
Holcim said the financial position remained healthy with liquid cash position and a strong asset utilization ratio as it continues to generate high revenues.
The company also operates cement facilities in La Union, Bulacan and Misamis Oriental provinces.