The facility will be equipped with an initial capacity of 2 million tons per year
Listed Phinma Corp. on Friday said it signed an agreement for its cement manufacturing subsidiary to acquire and take over assets in Bataan currently under its lease, for a total consideration of P800 million.
Under the agreement, Philcement Corp. will be buying the port facilities and land it leases as a cement manufacturing terminal in Bataan in line with its goal of re-entering the Philippine cement industry.
Philcement will hold the exclusive use of the terminal and its port facilities, which are seen functional by the fourth quarter this year. By taking more control of the facility, Phinma said its re-entry into the local cement industry “is strengthened further.”
In a disclosure to the stock exchange, Phinma, which owns 60 percent of Philcement, said the investment will result in operational and cost efficiencies.
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“This new agreement and additional investment will be a meaningful part of PHINMA’s strategy to provide cost-efficient and reliable supply of construction materials to our customers,” Philcement president and chief executive officer Eduardo Sahagun was quoted as saying.
In June last year, Phinma took out a five-year P875-million term loan agreement with Security Bank for the construction of the Bataan cement terminal. The facility will be equipped with an initial capacity of 2 million tons per year.
Prior to reclaiming it, Union Cement Holdings Corp. became part of Holcim Philippines, Inc. after Phinma Group sold majority of its interest in the unit in 2004.
A week ago, Phinma said it is investing $50 million in preferred shares of Vietnam’s Song Lam Cement Joint Stock Corp., a unit of Vietnam’s largest privately-owned cement makers The Vissai Group.
The move is seen to “ensure supply reliability for the Philippines with both volume and quality assurance.” Philcement currently sells and distributes cement products in selected areas through its brands Union Cement Ultra and Union Cement Super.
Phinma’s comeback in the cement industry also comes as the Department of Trade and Industry imposes higher duty on imported cement in order to protect local cement-makers, who were, through a formal investigation by the Tariff Commission, proven hurt by a surge in cement imports in recent years.
