INFRASTRUCTURE PROGRAM. President Ferdinand R. Marcos Jr. leads the groundbreaking of Pambansang Pabahay Para sa Pilipino Program at the Palayan City Township Housing Project in Nueva Ecija on Dec. 21, 2022. The government's infrastructure program is expected to boost sales of cement manufacturing companies in the country. (PNA file photo)
MANILA – DMCI Holdings, Inc., which is acquiring the publicly listed cement manufacturer Cemex Holdings Philippines (CHP), is hopeful that the administration’s infrastructure program and the easing of monetary policy will help turn around CHP’s financial performance.
“While cement demand is currently soft, we expect it to rebound as our turnaround plan progresses, supported by the Build Better More program and the anticipated easing of interest rates next year,” DMCI Holdings chairman and president Isidro Consunji said in a disclosure to the Philippine Stock Exchange (PSE).
DMCI Holdings is acquiring CHP after buying the latter’s parent company Cemex Asian South East Corp. (Casec) for USD305.6 million (PHP17.6 billion). Casec owns 89.86 percent of CHP.
DMCI Holdings said this acquisition is its first in a decade and also its largest investments to date.
Moreover, Consunji said the company eyes a turnaround in CHP’s operational and financial performance by 2025 with the cement producer’s ongoing expansion and synergies with DMCI Holdings’ subsidiaries.
Currently, CHP is constructing an integrated cement production line at its Solid Plant in Antipolo, Rizal. It will have a capacity to produce 1.5 million tons of cement.
Once operational, the new production line will double CHP’s production capacity in Luzon and boost its installed and production capacity by 26 percent from 5.7 million tons to 7.2 million tons.
The new facility is expected to begin its commercial operations in September this year.
DMCI Holdings’ unit Semirara Mining and Power Corp. (SMPC) will also benefit from the parent company’s buying of the cement manufacturer.
SMPC expects a significant increase in its coal sales to CHP, estimating a 227 percent rise to 500,000 metric tons annually compared to 2024 levels.
Aside from coal sales, SMPC can also supply CHP with 50 megawatts of electricity and fly ash that is used for cement production.
In return, DMCI and DMCI Homes will now be buying around 400,000 metric tons of cement from CHP, which also has the potential to expand depending on the growth of projects of DMCI and DMCI Homes.
CHP is the fourth largest cement producer in the country.
For the past two years, CHP reported losses of PHP1 billion in 2022 and another PHP2 billion in 2023 due to higher operating costs and lower sales volume. (PNA)
