Building boom boosts Holcim 9-month sales

Holcim Philippines Inc. on Tuesday reported a sharp rise in its income for the first nine months of 2012, on the back of robust cement demand from the government’s infrastructure spending and the steady rollout of residential and commercial projects.

Data from the cement manufacturer showed its net income in January to September hitting P2.53 billion, representing a 22.5-percent increase from P2.06 billion in the same period last year.

For the third quarter alone, however, the local unit of the Swiss concrete and aggregates giant reported a 17-percent decline in its net income to P516.7 million from P626.3 million last year.

Speaking to reporters on Tuesday, Holcim Philippines chief operating officer Roland van Wijnen said the third quarter was traditionally a weak season for the construction industry because of the monsoon rains.

Despite this, demand for cement remained strong for the industry, in general, and Holcim, in particular.

The Cement Manufacturers Association (CeMap) reported year-to-date sales growth of 20 percent, while Holcim kept pace with the industry, with year-to-date growth also of 20 percent.

“We usually use the slowdown in the rainy season as time for maintenance and repair,” van Wijnen said. “But, as demand exceeded expectations this year, we were confronted with the possibility of insufficient supply.  Given our commitment to ensure reliable supply, we chose to go for more expensive clinker imports.”

Revenue for the nine months to September reached P20.2 billion, higher by 22.5 percent from a year ago.

Efforts to keep its markets supplied came at higher cost, however, as the company had to import clinker to augment production given that several of its facilities were under preventive maintenance, company officials said.

Van Wijnen says that the company expects to achieve double-digit volume growth this year, as it sees better performance in the months ahead. The plants, he said, achieved full efficiencies with the completion of maintenance and repair initiatives.

Holcim Philippines continues to have an optimistic outlook on the industry, and is confident that growth will carry over to 2013 given the positive economic climate and as the impact of the government’s Private Public Partnership projects begins to be felt.

“The challenge for us is to meet increasing demand over the longer term,” van Wijnen said. “We have started reactivating our idle facilities, beginning with our terminal in Calaca, Batangas, last year. Our grinding plant in Mabini will be operational by the third quarter of next year.”

“What follows would be to build a new cement plant, and we hope to be able to take the first important step next year,” he added. “We are now in the midst of preparing a proposal for a new cement plant to be submitted for board approval in the first half of 2013.”

Van Wijnen shared that the company was looking at a so-called “brown field” project, which would take less than three years to complete.