Fortune Cement to expand

Fortune Cement to expand
27 February 2004

Publicly listed Fortune Cement Corp is investing P800 million to expand capacity at its Philippine Batangas facility in order to meet increasing demand.  The expansion would increase output to 3300 tons per day from the current daily production of 2500 tons, said Chairman Renato C. Sunico.  "The expansion would start in April and will take about three to four months. Assuming that everything would be sold, it could mean a 30 per cent increase in sales," Mr. Sunico told reporters after the company’s special stockholders’ meeting yesterday.  He said bulk of the P800-million investment would be funded by loans and that Fortune Cement is already talking with banks.

Mr. Sunico said the return on investment from the expansion is expected to come in about five years, depending on market behavior, input costs and selling prices, among other factors.  He said that while the cement industry saw a three per cent decline in sales volume last year, Fortune Cement decided to expand to meet the increasing demand in its market niche in Batangas and the other southern parts of Luzon.

Mr. Sunico declined to give figures on the firm’s performance for 2003, but said the firm did better last year than in 2002 due to costs savings, particularly after Republic Cement converted its loan notes to equity late last year.  Also yesterday, Fortune Cement stockholders’ approved a plan to merge with wholly owned unit Premier Cement Corp.  Fortune Cement Corporate Secretary said consolidating the accounts of the subsidiary with the parent firm - also called an upward merger - will simplify the structure of both firms. The merger, which would leave Fortune Cement as the surviving entity, would be completed by June or July.

Published under Cement News