Cement Maker Holcim May Hike Prices Due To Higher Prod'n Costs

[Mr Lee]

This is sure to raise the prices of condos and homes IMO. What do you think? Local manufacturer Holcim Philippines Inc., which corners a third of the domestic cement market, may hike prices of its products owing to higher costs of coal, oil and electricity.Ian Thackwray, Holcim chief operating officer, said that because oil, costs and electricity make up 60 percent of the company's expenses, the company may have to adjust the prices of its cement.“There are continuous small price adjustments. It may be necessary to hike prices because of...increase of input cost. In Asia, the most expensive electricity is in the Philippines. Coal and electricity are 60 percent of variable costs," Thackwray said.The company, meanwhile, expects cement demand to be strong in the first half and then weaken in the second half of 2010.Demand in the first semester of 2010 may come from the government's infrastructure projects that would have to be completed. But the election ban will also out a six-month moratorium for new infra projects, dampening demand for cement.“Historically, that is the case. There is a drop in demand after an election. the most important thing is the first six months of next year. We have to make sure that we have strong supply," Thackwray said.Besides government projects, low-cost and affordable housing are buoy demand for cement, he said.A new kiln will boost Holcim's capacity and will add a million tons of cement per year.In the January to September period, the Holcim Group said earnings rose by more than nine times to P855 million as revenues reached P5.5 billion, a 30-percent improvement.Besides employing 1,500 workers, Holcim Philippines has cement plants in La Union, Bulacan, Davao, Misamis Oriental, Taguig, and Parañaque. link to the story

Edited December 7, 2009 by Mr. Lee