Taking note of an expected surge in cement demand with the launch of several Public-Private Partnership (PPP) projects in the Philippines, Zurich-based Holcim Ltd. has given its Philippine cement subsidiary – Holcim Philippines Inc – a first phase approval to build a $550 million cement plant in the Bulacan province of the Central Luzon region.
Talking to reporters on Wednesday, Holcim Philippines CEO Ed Sahagun said that the new plant will have a capacity of producing 2.5 million metric tons annually. Sahagun also said that the first phase approval empowered Holcim Philippines to obtain quotations, organize project team and proceed with securing permit requirements. The final approval for the plant would be secured by September this year.
“The timing of the construction of our new plant is perfect because the country is doing well in a lot of aspects,” Sahagun said. With recent investment grade ratings obtained by the Philippines from Fitch Ratings and Standard & Poor’s, the country is gearing up to boost activity in the construction sector. The country’s credit rating upgrades are expected to lower interest payments on government debts, thereby unlocking public funds for various infrastructure projects as well as garnering foreign investor interest in the country.
While the company’s first-quarter sales were affected by the heavy rains experienced in Mindanao in January and February, cement sales were buoyed by steady demand in Luzon, particularly the National Capital Region. A bulk of the company’s cement volumes have also been gradually rising, which points to the sustained pace of large construction projects.
Sahugan also said that the company was on track in reviving its grinding facility in Mabini, Batangas, which is expected to be completed by the third quarter of this year. This would in turn help Holcim Philippines’ efforts to ensure steady supply as demand rises. The new $550 million plant at Balacan will be up and running by 2016, according to a press release issued by the company.
