Cemex expects low bills via Semirara

Cemex expects low bills via Semirara | Daily Tribune

Cemex Holdings Philippines (CHP), the largest acquisition to date by businessman Isidro A. Consunji, can expect reduced electricity costs due to its supply agreement with Sem Calaca Corp., a subsidiary of Semirara Mining and Power.

CHP informed the stock exchange on Monday that its subsidiary, Apo Cement, has agreed with Sem Calaca Res, Semirara Mining and Power Corp.’s (SMPC) retail electricity supply arm, to provide electricity to its cement plant in Naga, Cebu.

The agreement, according to the disclosure, will expire on 25 December.

Consunji’s acquisition of CHP through his diversified engineering conglomerate DMCI Holdings Inc. seeks to achieve synergies with his other businesses.

Goal: Cut operations cost

Previously, Consunji said he would push CHP to reduce operational costs and increase volumes by expanding its capacity by 26 percent, from 5.7 million metric tons to 7.2 million MT annually.

CHP is constructing a 1.5-million-ton integrated cement production line at its Solid Plant in Antipolo, Rizal, set to start operating in September.

The cement firm incurred losses of P1 billion in 2022 and P2 billion in 2023 due to soaring costs and limited sales volumes.

DMCI projects a decline in power, fuel, and other production costs, which accounted for 73 percent of CHP’s expenses last year, as market prices normalized.

He would push CHP to reduce operational costs and increase volumes by expanding its capacity by 26 percent, from 5.7 million metric tons to 7.2 million MT annually.

The transition to a more affordable energy supplier, SMPC, will further moderate costs.

SMPC, on the other hand, anticipates a significant increase in coal sales to CHP next year, projecting a 227 percent surge to 500,000 MT per year compared to current levels.

Beyond coal, SMPC can also provide CHP with 50 megawatts of electricity and fly ash.

Based on historical consumption patterns, DMCI and DMCI Homes are estimated to source around 400,000 MT of cement from CHP, with potential for further expansion as DMCI’s order book grows and DMCI Homes’ project launches recover.