San Miguel, Northern Cement forms joint venture

MANILA, Philippines - San Miguel Corp. (SMC) has formed a joint venture with Northern Cement Corp. to establish a cement plant in Sison, Pangasinan.

The joint venture company will be 70 percent owned by SMC and 30 percent owned by Northern Cement, which is owned by SMC chairman Eduardo “Danding” Cojuangco Jr.

Tycoon Ramon Ang is president of both SMC and Northern Cement.

“SMC and Northern Cement Corp. have agreed to organize and establish a joint venture corporation for the purpose of undertaking the construction, development and operation of a cement plant in Labayug, Sison, Pangasinan and manufacturing, processing and sale of cement and other products derived therefrom, allied thereto or necessary therefor,” documents submitted to the Philippine Competition Commission (PCC) showed.

The PCC has already approved the transaction.

“In view of the recommendation from the mergers & acquisitions office that on the basis of information obtained from the parties and other sources to date, the joint venture between SMC and Northern Cement does not result in a substantial lessening of competition in the relevant market since post acquisition, the market structure remains largely unchanged and the transaction does not appear to change incentives of the parties, the Commission hereby resolves that it will take no further action with respect to the transaction,” said the PCC, which is headed by its chairman Arsenio Balisacan.

Northern Cement has been on an expansion mode, banking on the growing infrastructure business in the country.

Early this month, Ang said Northern Cement would be pouring in P35 billion for two more cement plants in Pangasinan to add to its existing plant in the province. 

Since the entry of the San Miguel Group as an equity shareholder in 2012, Northern Cement has since completed a modernization program, acquiring the latest manufacturing technologies for its existing lines.

Over the next three years, SMC is building five new cement plants with a total annual capacity of 10 million tons.

Affiliates Northern Cement and Eagle Cement will build the new plants in Pangasinan, Bulacan, Quezon, Davao and Cebu, with a capacity of two million metric tons each.