Holcim to invest in US$15m plant expansion

Holcim to invest in US$15m plant expansion
Published: 10 January 2007

Holcim Ltd plans to infuse around US$15m to set up stand alone packing and grinding plant in Sri Lanka, a top official said Tuesday.

Holcim, the island’s biggest cement player, operates the only fully fledged cement manufacturing facility in Sri Lanka.

The company, which commands around 30 per cent of the island’s 3.8Mt cement market, says a shortage of lime-stone supplies is keeping growth on check.

With plants in Puttalam (in the island’s west coast) and Galle (in the south), Holcim has secured land close to the eastern naval base in Trincomalee to set up its new project.

"We plan to start the project within the first six months of this year," Holcim (Lanka) Ltd Managing Director, Peter Spirig told LBO.

He says the plant will have an initial capacity of around 300,000tpa, which will be scaled up, depending on the pent up demand.

There is a 2.5 per cent import tariff on clinker imports, as against 15.0 percent slab for finished cement imports either in bulk or bags, says equity research firm Asia Securities.

Dominated by seven large players, the cement industry is expected to grow by 10 per cent each year, boosted by construction of highrise apartments, and projects to rebuild infrastructure that were damaged during the December 2004 tsunami.

"What is healthy is that there is significant demand from small homebuilders for renovations or extensions, which adds consistency to the growth patterns," Spirig said.

Over 100,000 housing units are added annually, says equity research firm Asia Securities, who says a rise in per capita income levels and strong growth in the property sector, makes homebuilders the main driver for cement consumption.