Lower govt spending cuts cement sales by P952 million – Holcim

One of the country’s major producers of cement said Wednesday that their cement sales in the first half of 2011 fell by P951.57 million because the Aquino administration chose to spend P89.96 billion less than it did last year. Holcim Philippines chief operating officer Roland van Wijnen said they appreciate government’s efforts at ensuring transparency and credibility but he also urged the administration “to set realistic timelines to guide our business and investment plans." Van Wijnen said their sales volume dropped 9 percent, which “mirrored the industry performance." That decline translates to 14.7 percent lower net sales, according to the firm’s financial disclosure to the Philippine Stock Exchange. Holcim Philippines operates four cement plants in La Union, Bulacan, Misamis Oriental, and Davao and has more than 1,800 employees. “Government has traditionally accounted for roughly half of total cement demand, which is why the lower infrastructure spending had such an impact on the industry," van Wijnen said. Holcim, citing Department of Finance (DOF) figures, said public spending from January to June this year reached P698.87 billion, which is nearly 17 percent lower than the programmed expenditure ceiling of P838.55 billion. Van Wijnen said Holcim is optimistic the demand drag is only temporary. “Our people on the ground have started to see some government projects being approved, and the Public Works Department has committed to spend 90 percent of its budget before the year ends so we are hopeful we will be able to report better performance in the future," the COO said. Van Wijnen explained that Holcim recently raised cement prices to protect its margins and reflect the rising cost of coal — a key input to cement production. — ELR/VS, GMA News