Republic Cement studies expansion in Mindanao

MANILA, Philippines - Republic Cement and Building Materials Inc. looks at more possible expansions in Mindanao, which has become a darling for investments since the start of the Duterte administration.

Mindanao is seen as a new investment destination given the region’s huge growth potential, making it a possible expansion zone for the cement firm, Aboitiz Equity Ventures Inc. (AEV) chief finance officer Manuel Lozano said.

“Over time, we’re trying to see where future expansion should be. If infrastructure in Mindanao is strong and the economy picks up there, I think that could be a natural place for expansion,” Lozano said.

Republic Cement, formerly Lafarge Republic Inc., is owned by a joint venture of AEV and Ireland-headquartered CRH International.

Firming up plans for the company’s Mindanao expansion would, however, take a few more months given the long list of requirements, Lozano said.

“That decision is going to be in the next few months or before the end of the year. If you’re going to build a cement plant it’s not a one year thing – it takes three four years. You need a (quarry) site where you’re going to need all permits… and that’s one of the challenges moving forward… if land is agricultural, you need to convert it,” he said.

The Duterte administration has laid down a P7-trillion public infrastructure plan from 2017 until 2022, ushering in the era of the golden age of infrastructure for the country.

For this year, outlook for cement is strong since there are more “projects in the works, both government and private,” Lozano said.

To keep up with demand, Republic Cement is focused on upgrading manufacturing network with plants in Bulacan, Teresa in Rizal,Taysan in Batangas, Danao in Cebu and Iligan City in Mindanao.

“Right now, we’re doing a lot of work to improve efficiency because a lot of the plants are quite old. We need to make sure, before we even start to expand the existing plants. We still have issues when it comes to efficiencies, some bottlenecks we have to clear. That’s our priority especially this year,” Lozano said.