San Miguel pouring $1 B for new cement plants

MANILA, Philippines - San Miguel Corp is pouring in $1 billion to build five new cement plants in different parts of Luzon, Visayas and Mindanao, its top official said yesterday.

The amount is higher than the earlier announced $800 million due to the addition of three new cement plants to the two previously disclosed facilities.

San Miguel president and COO Ramon Ang said the five new plants would have a total annual capacity of 10 million metric tons or two million MT each plant.

“We are putting up new cement plants…It would have a total of 10 million metric tons and these should be up and running by 2017,” Ang said.

The projects will be undertaken by affiliates Northern Cement and Eagle Cement in Pangasinan, Bulacan, Quezon, Cebu and Davao.

San Miguel owns a 35 percent stake in Northern Cement, a company owned by company chairman Eduardo Cojuangco while Eagle Cement is privately owned by Ang.

 Ang said now is a good time to invest in cement “because a lot of people are investing in real estate.”

He also said if ever there would be oversupply, the market would eventually correct in two to three years.

The additional 10 million MT would bring the San Miguel group’s cement capacity to roughly 16 million MT.

Ang said the industry currently has a capacity of 33 million MT which would increase to roughly 43 million MT once the San Miguel group’s new cement plants are in place.

San Miguel earlier announced its intention to go full blast with its expansion into cement and power.

The conglomerate has been bullish about the local cement industry as the Philippines has a per capita consumption of 170 kilos, far lower than the per capita consumption of 1,000 kilos in other countries.

Meanwhile, Ang said all  other businesses are doing well.

“The traditional businesses are all delivering double digit growth in profit and volume. The beer, food, whisky, packaging are all doing well.

For banking, Ang said: ‘There are parties interested to acquire Bank of Commerce but we are not actively doing anything. We have been approached by a couple of banks. We will always evaluate whatever offer we receive.”