DMCI Holdings, Inc. Eyes Quick Cemex Holdings Philippines Turnaround; Unveils Recovery Roadmap

The diverse engineering conglomerate DMCI Holdings, Inc., which made its first acquisition in ten years and its largest investment to date, presented its strategic strategy for revitalizing Cemex Holdings Philippines (CHP).

The fourth-biggest cement producer in the Philippines, CHP, reported P1.0 billion in losses in 2022 and P2.0 billion in 2023. The company mainly ascribed these losses to declining sales volumes and rising costs.

“We recognize CHP's operational and financial issues, but we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group,” said DMCI Holdings chairman and president Isidro A. Consunji.

“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,” he added.
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At its Solid Plant in Antipolo, Rizal, CHP is building an integrated cement production line capable of producing 1.5 million tons.

The company's capacity to produce cement in the Luzon region will essentially double as a result of this expansion. Additionally, it will increase CHP's installed yearly production capacity from 5.7 million tons to 7.2 million tons, a 26% increase.

By September 2024, the new cement production plant is expected to be operational.

DMCI Holdings expects expenses associated with electricity, fuel, and other production supplies—which account for 73% of CHP's cost of sales—to decline in 2023 as a result of stabilizing market pricing and switching to Semirara Mining and Power Corporation (SMPC), a more reasonably priced energy provider.
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In addition, it is anticipated that after CEMEX exit, talent and business process onshoring initiatives would result in a decrease in selling and administrative costs, which made up 52% of operating expenses in the previous year.

SMPC estimates that its coal sales to CHP will expand significantly from 2024 levels, rising by 227% to 500,000 metric tons a year.
The integrated energy company can provide CHP with fly ash and 50 MW of power in addition to coal.

Roughly 400,000 metric tons of cement are sourced by DMCI and DMCI Homes from CHP, according to historical use patterns.
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If DMCI's order book grows and the project launches for DMCI Homes pick up steam, this volume could rise even more.