Eagle rises on debut, preys on top prize

Shares of Eagle Cement Corp., which aims to be the country’s leading cement producer in the next few years, outperformed the stock barometer on inaugural trading yesterday.

Eagle gained P0.30 or 2 percent to close at P15.30 per share from its initial public offering price of P15 per share. It was the most actively traded company, with total traded value reaching P967.95 million.

The cement firm opened at P16 and hit a high of P16.12, but gave up earlier gains as some investors pocketed gains. Based on yesterday’s closing, the firm had a market capitalization of P75 billion.

On the other hand, the main-share Philippine Stock Exchange index added 18.54 points or 0.24 percent to close at 7,886.03.

Eagle’s offering was oversubscribed by over three times the base offer, its president John Paul Ang said in a press briefing after the company’s listing on the Philippine Stock Exchange (PSE).

Eagle chair Ramon S. Ang said the cement company was facing a “very good future.” In two to three years, the company hopes to boost its market share to 25 percent from 14 percent at present, making it the largest cement company in the country.

But by next year, the older Ang said Eagle should already be number one in terms of capacity. “If we’re able to sell seven million [tons], Eagle will be number one right away,” he said.

He estimated Eagle’s sales volume could expand by around 25 percent next year.

In his remarks prior to the listing, PSE chair Jose Pardo said: “Filipino businesses can derive inspiration from Eagle Cement’s story. I believe there are local corporations that are ready to expand operations or offer more products to the market. This market debut shows that tapping the stock market is a viable financing option for growth and expansion. We have seen family businesses open their doors to the public through the years.”

Online stock brokerage COL Financial also sees bright prospects for Eagle, saying it was “poised to benefit from the Philippines’ growing construction industry due to the country’s GDP (gross domestic product) growth and the government’s plan to boost infrastructure spending.”

At present, Eagle is the fourth largest cement producer in the country in terms of capacity. The three bigger players are all multinational firms.

The local firm has a production capacity of 5.1 million tons a year, or a total of 130 million 40-kilo bags of cement. It is already completing its third production line in Bulacan, which will raise production capacity to 7.1 million metric tons per annum by 2018.

IPO proceeds will be used to partially finance the construction of a two-million metric ton cement plant in Cebu, which will become its fourth production line. This plant is set to raise production capacity to 9.1 million metric tons per annum by 2020.

“And whenever there’s an opportunity to invest, to acquire anything whether mining rights or existing plant or whatsoever, the company will definitely pursue it,” the older Ang said, adding that acquisition would hasten the company’s growth.

Eagle sold 500 million primary common shares with an over-allotment option of up to 75 million secondary shares. Its ticker symbol is “EAGLE”.