Foreign, local cement giants eye Philippines assets of Holcim

MANILA, Philippines — Foreign and local cement and infrastructure giants have expressed interest in the Philippine business of Lafarge Holcim Ltd., but no agreement has been reached as of this writing, industry sources told The STAR. 

Among those that have expressed interest in the Philippine business of Europe’s biggest cement maker are Japanese giant Taiheyo Cement Corp., Thailand’s Siam City Cement and Anhui Cement Corp. of China. 

From the local players, those interested include Ramon Ang’s Eagle Cement Corp. and the Consunji-owned DMCI Group., sources have confirmed. 

Non-binding offers were submitted last month, but it is not clear which among the interested parties actually made an offer except for Eagle Cement. 

Sources said the interested parties and the seller could not reach an agreement on the price yet.

“It seems they are not super hot to sell so none of the parties were super hot to buy,” one source said.

This means that the interested parties have not been able to meet the ideal price set by Lafarge Holcim. 

Sought for comment, a top official of the DMCI Group confirmed the group’s interest in Holcim, but clarified that it did not agree on the financial assumptions of the seller.

“Hence, we did not submit anymore,” the official said.

Lafarge Holcim is readying the sale of its Philippine business as it seeks to further reduce debt by selling non-core assets, Bloomberg reported last month.

Ang has said his cement company submitted a bid, sending Holcim Philippines’ share price to rally by 4.57 percent to close at P9.61 per share last week.  

Holcim Philippine’s shares closed at P9.57 per share on Friday. 

In a disclosure, Holcim Philippines said it was not a party to any negotiations regarding its sale.

The sale of Lafarge Holcim’s Philippine business is reportedly part of a broader strategic review of its Southeast Asia operations following the sale of its Indonesia business.

Industry sources said Lafarge Holcim may just decide keep the Philippine business if it decides it can’t fetch an attractive enough price. 

LafargeHolcim’s Philippine assets are estimated to be valued at around $2.5 billion.

Holcim Philippines is engaged in the manufacture, sale and distribution of cement, dry mix mortar products, clinker and aggregates. It also offers construction-related trainings, consultancies, testing and other technical services to its customers.

It has cement manufacturing facilities in La Union, Bulacan, Batangas, Misamis Oriental and Davao, as well as aggregates and dry mix business and technical support facilities for building solutions.

It also operates cement terminals in Iloilo, Batangas and Manila.

In the Philippines, there are eight integrated cement manufacturers that include Holcim, Republic Cement, Cemex, Taiheiyo, Northern Cement, Eagle Cement, Goodfound and Mabuhay. These manufacturers operate a total of 16 integrated cement plants and three cement grinding plants all over the country. Big Boss Cement, a new entrant, recently opened a cement grinding plant in Pampanga in 2018.

The Philippine Competition Commission (PCC), for its part, said the successful buyer of Holcim Philippines would need the nod of the anti-trust agency if the transaction meets the threshold of P2 billion for the size of the transaction. 

“After Holcim and the buyer sign a definitive agreement, they have 30 days to notify the Commission,” PCC chairman Arsenio Balisacan told The STAR over the weekend.