Taiheiyo to invest $10M to bolster plant capacity

CEBU, Philippines - Japanese cement maker Taiheiyo Cement Philippines, Inc. (TCPI) announced its US$10 million expansion plan in the next two years to increase the plant’s capacity to at least two million tons a year.

The country’s increasing demand for cement products as strengthened by the strong requirements from the public and commercial sectors, as well as increasing growth from retail market, prompted the company’s decision to expand its plant’s production capacity, said TCPI President and Chief Executive Officer (CEO) Satoshi Asami.

Asami mentioned the Philippines’ encouraging economic growth and repositioned debt standing as affirmed by international rating agencies as few reasons why the TCPI has put bolstered its confidence to add investments here.

TCPI registered a 103 percent production capacity increase in the last two years. This year, he said, this is expected to grow by at least 15 percent.

Although TCPI has seen a double-digit increase of demand from the public and commercial sectors, he said the company has seen a slowly growing market for retail or individual buyers, those who need cement products for house repairs, renovations or building new residential units.

Traditionally, the company would invest an average of US$3 million a year for its lone cement plant in the Philippines located in San Fernando in the southern part of Cebu.

In the next two years, though, the company has committed to increase its investment due to fast growing demand.

TCPI is one of the several subsidiaries wholly owned by Japan’s biggest cement manufacturer, Taiheiyo Cement Corporation (TCC). It is the core company of huge international corporate groups that operates 17 cement plants in six countries.

TCC acquired the 100 percent share-holdings of the former Grand Cement Manufacturing Corporation (GCMC) in November 2000.

It can be recalled that GCMC started construction of the plant in August 1991, leading to the start of commercial operation in the last quarter of 1993.

Records showed that the Philippines’ total demand for cement in 2012 reached to 18 million tons, a bigger jump from 15 million tons in 2011.

Meanwhile, the National Economic and Development Authority (NEDA-7) reported that the construction sector continued to benefit from the robust real estate industry in Central Visayas, specifically in Cebu, thus raising the demand for construction materials like cement, among others.

In Cebu alone, the real estate sector saw a revenue growth rate of 18.8 percent in the third quarter of 2012.

The real estate market was dominated by residential properties. Data from the Housing and Land Use Regulatory Board (HLURB) showed that in 2012, 14 residential condominium projects involving 5,212 units valued at P5.17 billion were issued licenses to sell.

All these condominium projects were located in Cebu.

The market for residential condominium is targeted to expand further in the next few years as an additional 100 condominium buildings are projected to be completed by 2015 and another 170 to 200 buildings expected to be finished by 2017.

In the case of the open market residential subdivisions, HLURB recorded 22 projects that were put on the block in 2012 costing P2.6 billion. Of the 22 projects, 15 were located in Cebu and the rest were found in the provinces of Negros Oriental and Bohol.

The real estate and construction industries also benefited from the steady demand for real property from Overseas Filipino Workers (OFWs), who seem to consider real properties as good investments for their hard-earned money.

Liquidity in the market propped up by available credit and financing support from the banking sector also helped foster growth in the region's construction and real estate sectors. /JMD (FREEMAN)