Holcim allots P2.4B for 2018 capex

The country’s leading cement-maker Holcim Philippines Inc. has earmarked P2.4 billion for capital outlays this year, mostly to boost production capacity and ride on the local construction boom.

Holcim will prioritize operational improvements, tighter cost management and new building solutions to better benefit from and support strengthening construction activity in the country, newly appointed president and chief executive John Stull said during the company’s stockholders’ meeting on Friday.

The company plans to seize opportunities from the ongoing construction boom by improving its ability to supply the market more efficiently and provide value-adding offerings to its partners in the building industry, he said.

During his address to shareholders, Stull said the company would boost its equipment maintenance programs while continuing to streamline logistics systems and processes for more reliable customer service.

“Last year, we started projects to raise cement production capacity nationwide to 12 million metric tons by 2019. While these projects have just started, we are already considering more investments to raise clinker capacity given the positive projections for the construction industry,” he said.

Despite higher sales volumes, Holcim Philippine profits for the first quarter of 2018 declined by 25.5 percent year-on-year to P700 million due to lower cement prices caused by increased competition and higher production expenses. Compared to the fourth quarter of 2017, however, the first quarter bottomline improved by 278 percent.

“Before further raising production capacity, we have to make sure we are getting as much as we can from our plants. For this, we worked with the LafargeHolcim Group to strengthen the culture of excellence in our facilities. We also implemented logistics excellence initiatives so our business partners and customers receive products when and where they need it.”

The company has also launched initiatives to trim down energy and logistics expenses, the business’s biggest cost items.