Thursday, August 27, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
AFTER MORE than a year of putting operations on hold, listed cement manufacturer Holcim Philippines, Inc. is now ready to resume activities in its Misamis Oriental plant, citing improvement in demand from infrastructure projects and property developers.
In a statement yesterday, the Swiss cement giant’s local unit said its second production line in Lugait, Misamis Oriental would resume operations in November.
The cement company said market demand has significantly picked up this year as shown by improved sales volume across all regions, notably in Mindanao where there are several major road projects.
Aside from the infrastructure boom, Holcim said the improvement in sales was also driven by strong demand from low-cost housing, which has been spared by the global economic downturn.
"We recognize that government is hard at work, pump-priming the economy with infrastructure projects, and we want to make sure that we are able to continue supporting this initiative," Holcim Philippines Chief Operating Officer Ian Thackwray said.
"By operating a second line in Lugait, we ensure that there continues to be sufficient market supply," he added.
Infrastructure projects and low-cost residential housing were among "major growth drivers" that pushed the cement maker’s profits up by almost 60% to P1.2 billion from January to June.
While North Luzon still accounted for the biggest volumes, Mindanao recorded "exceptional" growth due mainly to the infrastructure projects funded by the government’s stimulus package. Robust housing construction activity was also sustained, amid strong overseas Filipino workers’ remittances and declining interest rates.
Consequently, cement demand grew by 2.9% in the second quarter of this year, and 5% for the semester, year-on-year, Holcim noted.
"As of now, market demand remains strong and there are no indications, as yet, of any slowdown," Mr. Thackwray said.
While Holcim remains conservative on how the cement industry will fare next year, additional volumes from Lugait will give flexibility for any incremental growth, he said.
Aside from one in Lugait, Holcim has three other production lines operating in Bulacan, La Union and Davao. There are still idled lines in Davao and Bulacan.
Shares in the company jumped by 5.81% or P0.25 to P4.55 apiece yesterday.
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