Asia / Oceania
SMC to spend $750M for 3 cement plants
May, 24 2013
(Philippines) -- San Miguel Corp. plans to spend $750 million to build three new cement plants to boost production in Philippines and support growth of the infrastructure sector.
San Miguel initiated its foray into the cement business with the P3-billion acquisition of 35% of Northern Cement Corp., a company personally owned by San Miguel’s chairman and CEO Eduardo “Danding” Cojuangco Jr.
“We are bullish about the cement industry. Around Southeast Asia, the per capita consumption of cement is 1,000 kilos. Here, it’s just 170 kilos, so there’s really a big upside,” said Ang.
The P3-billion investment in Northern Cement will be used to double the capacity of its existing Pangasinan facility to two million tons annually.
San Miguel also plans to spend $750 million for the construction of three new cement plants with the capacity to produce two million tons a year.
The first of the three new plants will be built in Pangasinan, next to the existing Northern Cement plant. The other two will be situated in Southern Luzon and Cebu.
He said each plant would have the potential to earn as much as $100 million a year, with a return of equity of 20 percent if it were to run at full capacity.
“Eventually, we want to become a dominant cement manufacturing player in the Philippines. We will need five more (plants) to become a leader in the country,” Ang said. “Today, foreigners control 90 percent of the market. We are targeting a 30-percent market share.”
Ang currently owns Eagle Cement, which operates a plant in San Ildefonso, Bulacan. He also owns Fortune Cement Corp., which has facilities in Taysan, Batangas, Asturias, Cebu, and in Norzagaray, Bulacan.
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