SMC to build 5 cement plants

The San Miguel group is building cement factories with a combined annual capacity of 10 million tons in five different locations around the country at an estimated project cost of $1 billion over the next two years.

The additional cement capacity, which will jack up SMC’s cement production capacity by 167 percent from current levels, is anchored on the group’s optimism on the real estate industry, SMC president Ramon S. Ang said yesterday during the listing of P33.5 billion worth of new preferred shares issued by the company.

Ang said SMC was upbeat on the cement business as the surge in investments poured into real estate would likely fuel demand for cement. He said additional cement capacity of two million tons annually would be put up in Pangasinan, Bulacan, Quezon, Cebu and Davao.

“We believe they will all be running by 2017,” Ang said.

The additional capacity in Pangasinan will be put up by Northern Cement Corp., which is already operating in this area. In Bulacan, the additional capacity will be put up by Eagle Cement Corp., which is already operating in San Ildefonso. Eagle Cement, which is personally owned by Ang, has yet to be folded into SMC.

In Cebu, Ang said he has acquired additional capacity with the purchase of the assets of South Western Cement. The proposed plant in Davao is a completely new plant.

The San Miguel group currently has a cement capacity of six million tons a year, or about 18 percent of the 33-million ton industry. This includes the four million ton capacity of Eagle Cement in Bulacan.

By the time SMC’s new cement plants are up and running in 2017, Ang estimated that the industry would have grown to around 45 million tons in terms of annual capacity.

If such projected capacity were divided by an estimated population of 110 million by then, Ang said per capita consumption would still be very low.

The expansion of the cement business is also seen in line with SMC’s involvement in big-ticket infrastructure projects.

At present, however, some of SMC’s major projects were being delayed by the government’s failure to promptly resolve right-of-way issues. These include the Ninoy Aquino International Airport (Naia) expressway, the North-South Luzon Expressway (via Skyway) connector road and the Tarlac-Pangasinan-La Union Expressway.