Eagle Cement eyes P530M in savings

Ang family-led Eagle Cement Corp. expects to generate some P530 million in savings from the three-year income tax holiday granted by the government for its recently completed third cement production line in Bulacan.

The savings will be generated over a three-year period starting this year through 2020.

“That doesn’t count yet other incentives that we get in terms of tax savings from the importation of certain equipment, bringing in the required equipment machineries from abroad. So we also get some kind of savings on cost of duties for that,” Eagle chief financial officer Monica Ang said in a briefing after the company’s stockholders meeting.

The additional incentives, Ang explained, had partly offset the impact of peso depreciation, which in turn had made importation of capital goods more expensive for Philippine companies.

To date, Eagle is the only cement company with income tax holiday incentives from the Board of Investments given that it’s the only one expanding its production capacity. The others have only been expanding their distribution capacity.

Eagle’s line 3 production line in Bulacan added 2 million metric tons to the company’s production capacity.

Production line 3 started producing cement in April. Utilization rate will gradually ramp up until full capacity is achieved, most likely by the third quarter of this year, Eagle president Paul Ang said.

The additional production line will thus start making an impact on Eagle’s financial performance starting the second quarter of the year, Ang added.

“The opening of our third production line will allow us to better serve new markets in Regions IV and V. This will give our company an increased role in the country’s infrastructure push, as we help build the future of Filipino communities,” he explained.

Eagle’s line 4 production, referring to a new plant being developed in Cebu, will boost the company’s capacity to 9.1 million metric tons (MT) from 7.1 million MT, making it the largest cement company in the country in terms of capacity.

Line 4 will enjoy a six-year income tax holiday.

This 2018, the company’s CEO expects cement sales volumes to grow at a double-digit pace while margins were expected to be stable.