Holcim sees sustained growth

MANILA, Philippines - Holcim Philippines Inc., a unit of of Swiss-based cement giant Holcim Group, is looking at a three to five percent growth in sales volume this year, according to a top company official.

Holcim Philippines chief operating officer Roland Van Wijnen said that while business was slow in the first quarter, state-initiated infrastructure spending and a strong property market would boost sales in the second half.

“While the company has experienced a slower first quarter this year, along with the entire cement industry, it is confident that the momentum in the private sector will be sustained while the effects of government spending will start to show in the market demand from the second quarter onwards,” Holcim said.

Winjen, however, emphasized that the impact of Public-Private Partnership projects being offered by the government, would only have a significant impact on the company in 2012.

Last year, Holcim Philippines reported a 22 percent growth in net income to P3.8 billion, fueled by election-related spending and private residential and commercial projects. Revenues rose 8.2 percent to P23.7 billion while EBITDA went up 4.35 percent to P7.2 billion.

Holcim Philippines also attributed the growth in earnings to prudent investments in manufacturing equipment and personnel training over the last three years in spite of challenges arising from a power crisis in Mindanao, where the company operates two plants.

The company currently operates four cement plants in La Union, Bulacan, Misamis Oriental, and Davao.

Holcim Philippines commercial director Ed Sahagun pointed to increasing coal and fuel prices as one of the main challenges facing the company this year, as these account for roughly 40 percent the company’s variable costs. 

Coal prices have steadily risen this year due to weather-related supply disruptions experienced by major producers such as Australia, which suffered from floods in January. Oil prices have also surged this year due to unrest in the Middle East.

To meet strong demand for building materials, Holcim Philippines is looking to expand or upgrade its production and distribution facilities. Early this year, the company reopened its cement terminal in Calaca, Batangas giving it greater flexibility to move products from Mindanao to Luzon. 

The firm likewise took over the operation of a previously sub-contractedcement paper bag munfacturing plant in Calumpit, Bulacan to ensure supply reliability and consistent quality.

The Holcim Group is the world’s leading suppliers of cement and aggregates with presence in more than 70 countries on all continents.