Holcim projects 5-6% growth this year

MANILA, Philippines - Cement-manufacturer Holcim Philippines expects a modest growth rate of five to six percent this year as it attempts to recover from a steep drop in net profit last year, its chief operations officer Roland van Wijen said yesterday.

The Philippine subsidiary of Switzerland-based Holcim Ltd. posted a net profit of P2.03 billion last year, down by 47.1 percent from P3.84 billion in 2010 because of weak demand and higher production costs.

Sales revenues dropped nine percent to P21.62 billion due to a surge in prices of coal and electricity, the biggest cost components in cement production.

“Last year was a challenging year for us because the reduced government spending meant there was less structure built, which has a direct corelation to cement consumption. Also, the (operational cost) has been increasing which had a marked effect on our bottomline. Those are the elements we are recovering from,” Van Wijnen said in an interview on the sidelines of the launch of its new CSR project.

He said the company is currently cutting production cost by stepping up the use of waste materials as an alternative to coal.

Holcim Philippines currently has a market share of one third of the cement industry. Van Wijnen said that right now, the company has no plans of expanding its market share.

“We will go there when our customers want us to go. Right, now, the market has an over capacity so significantly increasing our market share will not contribute to growth,” he said.

He said the company’s growth would be greatly driven by more projects that would be approved under the government’s Public-Private Partnership scheme. The company is pursuing opportunities for supplying winning bidders in the PPP projects.

So far, only the Daang Hari SLEX project has been successfully bid out and awarded by the government. A group led by Ayala Corp. won the concession to the project. 

Van Wijnen said the company is optimistic that both the government and the private sector would increase infrastructure spending this year.

“What I see right now is that in the fourth quarter, government spending has increased...The private sector has remained very strong also in 2011 and we see no signs of that changing so far,” he said.

In January, Holcim reopened its cement plant in Calaca, Batangas to take advantage of an anticipated surge in demand for new buildings and infrastructure in Metro Luzon.

“We are finalizing our new plans for expansion and have already laid out plans for 2020 and beyond to make sure that the market is supplied with our products,” Van Wijnen said.

With a workforce of over 1,700 Holcim operates four plants in La Union, Bulacan, Misamis Oriental and Davao. It produces four cement products: Holcim Excel, Holcim WallRight, Holcim Premium Bulk and Holcim 4X which are sold in bags, tonner bags and in bulk.

Parent firm Holcim Ltd. of Switzerland is one of the world’s leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as downstream activities such as ready-mix concrete and asphalt. The group holds majority and minority interests in more than 70 countries on all continents.

Holcim Philippines yesterday launched its new CSR project dubbed as: Sagot Ko ang Bukas. On May 24, 1,700 of its employees will participate in community service programs in its host communities in La Union, Bulacan, Misamis Oriental and Davao.

The activities will include the clean up of waterways as well as educational and environmental activities for host communities such as tree planting activities and waste management.

The company will also expand this year its project “Fostering a Child’s Education” which allows employees to contribute time and funds to help poor but deserving students finish high school.