Holcim Philippines Inc is allotting PHP800m (US$17.6m) for its capital expenditure program this year to beef up capacity amid an anticipated growth in construction activity.
Roland van Wijnen, chief operating officer of Holcim, said the company is positioning itself for an upturn in construction activity and the increase in government led-initiatives to develop infrastructure.
“The new government recognises the urgency of putting in place much-needed infrastructure projects to sustain economic recovery and is looking to partner with the private sector to achieve this. Apart from this, we also need to address the significant housing gap. If we view these potentials against the continued growth of remittances and credit availability, we can expect that the construction sector will continue to be vibrant,” Wijnen said.
Wijnen said the company plans to resume the operations of its cement terminal in Calaca, Batangas early next year to facilitate product deliveries to markets in Luzon. The terminal will have a capacity of 1.5Mt.
Aside from this, Holcim intends to revive the operations of idle facilities in Bulacan, Davao and Batangas as it aims to increase total production capacity to 7.7Mt from 6.1Mt.
Holcim is back to running two lines at its Lugait plant after it was forced to shut down one line last March due to power curtailment in the region.
Holcim posted a net income in the first half this year to PHP2.8bn, up 42 per cent from the previous level as election-related spending and private sector investments spurred sales growth.
Net sales rose 12 per cent to P12.9bn as sales volume expanded by 16 per cent, outpacing industry growth of 14 per cent.
Wijnen said the company managed to post a significant increase in net profits in spite of higher costs brought about by the power outages in Mindanao.
In April, Holcim’s power cost in Mindanao jumped by over 40 per cent as the El-Niño induced dry spell required more expensive energy sources. Wijnen said the company is expected to sustain its positive operating performance for the rest of the year though the growth would be slower with the absence of election spending.