Eagle Cement Corp (ECC) has started commercial operations of its P6.73-billion Bulacan plant this month and is in place to augment cement supply in time for the peak of the construction season. There was a one-year delay in the plant’s operations due to the devastation caused by last year’s typhoons.
Lucita P. Reyes, executive director of the Board of Investments (BOI), said the agency has approved ECC’s application to amend the timetable of its start of commercial operations from December 2009 to December 2010, citing force majeure which will put back the earlier agreed income tax holiday by twelve months.
Based on the ECC’s earlier representation with the BOI, the plant has an annual capacity of 1.08Mt equivalent to 26.6 million bags Portland cement and the company committed to produce cement at ex-plant prices 25 per cent cheaper than competition.
ECC listed Manny C Teng as the majority stockholder with 60 percent exposure in the firm which has an authorized capital of P2 billion of which P500 million subscribed. Teng is also ECC president. The project is funded by 55 percent equity and 45 percent loan.
Before this project, the last greenfield was undertaken by APO Cement in Davao which could be considered an expansion since it was built from an existing one. Other companies had undertaken expansion, including Davao Union Cement, Island, APO in Cebu but all before their acquisition by multinationals.
Combined, the existing 15 factories have a registered capacity of 23Mt, but demand as of 2008 stood only at 13.2Mt or 57 per cent of the registered capacity.
There are three independent cement companies, namely, Taiheyo Cement, Northern Cement Corp. and Surigao-based Pacific Cement. Lafarge, the biggest in terms of capacity has six factories while Holcim, the biggest in terms of sales, has four. Cemex operates two plants.