Union, Alsons merger hits snag

The expected merger between Union Cement Corp. (UCC) and Alsons Cement Corp. (ACC) is being delayed by discussions over management control and valuation.

Holderbank Financiere Glaris, which has a 40-percent stake in ACC and controls 40 percent of UCC, wants to have management control in the merged entity.

However, the Phinma group, which controls 60 percent of UCC and currently manages the cement firm, wants to continue managing UCC even after the merger.

UCC was one of the few cement firms which recorded a profit this year despite the influx of imported cement.

UCC is the product of an earlier merger among Bacnotan Cement, Davao Union Cement and Hi-Cement.

ACC, on the other hand, is owned by the Alcantara family.

ACC had earlier denied the merger but, Holderbank, sources disclosed, is bent on consolidating its Philippine holdings in view of the current depressed situation of the cement industry.

Industry observers said a merger between ACC and UCC may result in cost savings in terms of marketing, procurement, and distribution.

They also said a consolidation of Holderbank’s cement holdings "may also put it (Holderbank) in a better position to compete with other foreign cement firms which had also acquired some stake in other local cement firms."

Holderbank’s competitors in the Philippines include Cemex, Blue Circle and Lafarge.

The local cement industry is suffering heavily due to low demand as construction activity slowed sharply due to economic difficulty.

UCC’s cement plant in Norzagaray, according to sources, has been operating only using one of its two cement kilns due to the low demand for cement.