Holcim may reopen plant in Batangas

The local unit of multinational cement manufacturer Holcim is eyeing the reopening of its mothballed plant in Mabini, Batangas, next year to serve growing demand driven mainly by the administration’s accelerated infrastructure program.

Holcim Cement Philippines also said it would likely post record sales in 2012, although profit levels might be muted due to the difficulty of hiking cement prices, which were brought down last year due to weak demand.

Net sales for the first quarter rose to P6.6 billion, 18 percent higher than the P5.6 billion booked last year. Its profit, however, was down to P808 million from P818 million in the same period last year. “To raise the prices is a big challenge,” Holcim senior vice president for commercial operations Ed Sahagun said on Wednesday.

Speaking to reporters, Sahagun said there was an industry-wide drop in cement prices last year due to tepid market demand and stiff competition.

He said the price for every bag of concrete fell to around P160 last year. Today, the price per bag has recovered to P200 each, but this is still below the 2010 level of P214 per bag. “First-quarter profit was flat, even if our sales were higher because our prices are so low,” Sahagun said.

“We have successfully raised prices twice this year and we hope to catch up with 2010 levels toward the end of the year,” he said.

He said the growth in sales in the first quarter was largely driven by the “frontloading” of the government’s budget for the year.—Paolo G. Montecillo