NORZAGARAY, Bulacan - Cement manufacturer Holcim is betting its P3-billion expansion plan on demand from President Rodrigo Duterte's ambitious plan to overhaul the country's infrastructure, the head of its Philippine operations said Wednesday.
Holcim Philippines is expanding the capacity of its plants, including one in Duterte's home city of Davao, to raise production capacity to 12 million tons by the first half of 2019, its president and CEO Sapna Sood said.
Sood said she was "optimistic" over demand this year, after growth in 2017 failed to meet expectations.
"On the government side, we see positive development. Projects are starting. Big projects are starting to go into fruition," she told ANC's The Boss.
Demand from the construction boom will compensate for the effects of tax reform, which raises excise duties on raw materials like limestone, shale and silica, and on fuel that is used to transport products, she said.
The President has laid out a P8-trillion plan called "Dutertenomics" to boost economic growth by building new roads, railways and airports.
The spike in cement demand was felt by late 2017, Sood said during the interview at one of Holcim's factories in this industrial town on the outskirts of the capital.
Despite increased public spending last year, demand in the first half was "a little slow," Sood said. This gave Holcim the opportunity to position itself as a "solutions provider" with products like cement that dries in 24 hours.
Sood also cited competition from imported cement.
"We didn't sit still and let that slower demand slow us down," she said.
Quick-drying cement is particularly useful in road repairs in the Philippines, where daily traffic jams wear out the pavement faster, Sood said.
"Instead of saying we have this, we really want to understand what the end user is doing and then ensure that we’re matching that to the best of our ability," he said.
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