Holcim Philippines reports flat growth rate

Holcim Philippines reports flat growth rate
Published: 21 October 2008

The cement industry in the Philippines has been experiencing a flat-rate growth in the last few months due to the impact of the global financial crisis.

Ian Thackwray, chief operating officer of Holcim Philippines, admitted on Monday that the company has been on a zero growth since the second quarter of the year, a huge decline compared with the 5-6 per cent growth at the beginning of 2008.

“What we are seeing now is a strong slowdown in the cement demand because people are being cautious in the infrastructure investments,” said Thackwray when asked on the impact of the global financial crisis on the cement industry in an interview on Monday. Thackwray was one of the guest speakers at the 34th Philippine Business Conference held at the Manila Hotel.

He said the prospects for the third quarter for Holcim Philippines, to be announced next week, is lower than last year, and the fourth-quarter projection “is quite poor.”

Asked for growth prospects next year, the Holcim CEO maintained: “I hope it’s more than zero [growth rate].”

He noted that in the last two months, there had been a slowdown in the construction of private, residential and commercial infrastructure in the country.

Although the company did not reduce its number of employees, he said the total production of cement was reduced by 15 percent, or an equivalent of 1Mt of cement. “One of our cement kilns in Lugait [Misamis Oriental] was also shut down in July this year.”

The company has increased its prices on September 15 due to increases in the cost of fuel and cost consumption. “Sadly, the price increase has not increased our revenues.”

Thackwray added that the slowdown in the cement industry is expected to prolong unless “confidence of the private sector [is revived] and the government will further its investments in the infrastructure industry.”