MANILA, Philippines — The cement manufacturing arm of businessman Ramon del Rosario Jr.’s Phinma Corp. will spend P500 million to take over and fully acquire Petra Cement Inc., based on a share purchase agreement entered into with the Mindanao-based target firm.
This will further widen the Phinma’s footprint in Northern Mindanao.
In a stock exchange filing on Tuesday, Phinma said Philcement Mindanao Corp. will pay the amount in exchange for 100 percent of Petra outstanding shares.
Philcement Mindanao is 70 percent owned by Philcement Corp., 60 percent of which is owned by Phinma.
Philcement itself is engaged in the manufacture, importation, processing, distribution, and sale of cement products.
The transaction to acquire Petra is expected to close by the end of the year, according to Phinma.
READ: Philcement sets aggressive expansion
The new deal follows an earlier one disclosed last Jan 12, a manufacturing and sale agreement between Philcement and Petra which enables the former to operate the Petra plant, and to manufacture and produce, distribute, and sell cement products.
Philcement’s growth strategy
Located in President Manuel A. Roxas, Zamboanga del Norte, Petra’s cement grinding facility has a capacity of 500,000 metric tons yearly and serves the Northern Mindanao market.
This earlier deal “is aligned with Philcement’s growth strategy and its promise to assure Filipino consumers with reliable, high-quality supply of cement products under its legacy brand, Union Cement,” said Phinma, whose main business involves education.
Apart from cement and education, Phinma also has interest in steel production via Union Galvasteel Corp. (UGC) as well as real estate through Phinma Properties.
Del Rosario, chair and CEO of Phinma, earlier said the group intended to spend around P4.5 billion this year, half of which is set aside to fund projects in the company’s education business.
READ: Phinma group sets P4.5-billion capex for 2024
Phinma registered a slight, 1-percent growth in first-quarter earnings, which reached P229.57 million as higher costs tapered growth.
The company’s top line jumped by 14 percent to P5.45 billion. But costs outpaced this with an increase of 15 percent to P4.6 billion.
Phinma CMG—composed of UGC, Philcement, and Phinma Solar Energy Corp.—had a combined net income of P27.71 million during the January to March period.
Commenting on the first-quarter results, Phinnma said Philcement “remained challenged given the tight competitive environment.”
The cement manufacturer began producing and selling cement from the Petra facility during the quarter. INQ