Holcim Phils mulls new cement kiln worth $200M

Holcim Philippines will study the feasibility of constructing a $200-million new kiln in the country in preparation for a continued increase in demand for cement, even as the firm is set to spend around $20 million to recommission its mothballed kilns in Iligan, Davao and in Norzagaray, Bulacan, according to Holcim  chief operating officer Ian Thackwray.

In an interview with The STAR, Thackwray disclosed that Holcim’s five-year plan to recommission two of its currently mothballed kilns as well as its grinding plant in Mabini, Batangas and a central terminal in Calaca, also in Batangas.

Following an upturn in demand for cement this year, Thackwray said that Holcim is recommissioning its currently mothballed kiln in Iligan, Davao to replace a smaller kiln which it is decommissioning.

However, Thackwray assured, the smaller kiln in Davao could easily be recommissioned depending on demand. Recommissioning a mothballed kiln, Thackwray said, would cost around $10 million.

The Norzagaray, Bulacan kiln is also being recommissioned but it is scheduled to be operational by 2010.

After 10 years of low demand, Thackwray said, the cement industry has experienced an increase in demand this year that will finally allow local cement firms to post some profits.

Continued profitability and volume, Thackwray said, would allow Holcim to invest $200 million to build a new kiln in the country.

To encourage the continued growth of the cement industry, however, Thackwray said, the Philippines should not remove tariff protection against cement imports to allow the existing players to get the volumes that they need to post a profit.

Likewise, Thackwray said, Government should also work on lower energy cost to local manufacturers since high electricity cost adds to the cost of the product.

Thackwray, however, does not believe in the grant of additional incentives for the industry, expressing the belief that all should compete on a level playing ground.

In fact, he questioned the grant of incentives to new cement industry players supposedly to create more competition in the industry and break the alleged cement “cartel.”

Thackwray denied the existence of a cement cartel, stressing that Holcim, for one, follows its own plans and strategies as evidenced by its plan to increase its production.

Demand for cement has risen this year, Thackwray said, due to the government’s infrastructure program and increased commercial and housing construction.