DMCI Holdings Inc., a company known for its construction projects, is putting up a cement plant on Semirara Island in the Visayas worth P18.3 billion in an industry dominated by foreign manufacturers.
The company hopes it can ride on the government’s infrastructure program. Victor Limlingan, DMCI managing director, said the company is spending a total of $380 million (about P18.3 billion) for the cement-manufacturing venture, building a cement plant and three separate grinding plants located in Batangas, Iloilo and Zamboanga, three areas that can cover the entire Philippine market. “What is our advantage? First, the limestone will come from Semirara Island. The limestone is an overcrop that before we can get to the coal, we have to get through the limestone. Before, when you remove the overcrop, it’s a cost. This one is a revenue,” Limlingan said during Regina Capital and Development Corp.’s forum. “We are strategically located in the Visayas. We can distribute to all over the Philippines. We can even distribute to the Asean countries,” Limlingan said.
He admitted DMCI is taking a risk on such a capital-intensive project if the Duterte administration’s push for public-private partnership projects fails to move forward.
“The biggest problem when you put up a cement plant is the market. And with this one, we can slowly grow the market…that’s our strategy,” Limlingan said. He said the company at first may use their cement products in their projects and then start introducing it to the general public.
The biggest spending will go to DMCI’s cement plant, which costs about $180 million (P8.96 billion). It will have a capacity of 1.7 million metric tons per year and a 400,000 metric ton capacity for the grinder. It will also put up a 30-megawatt thermal power plant on Semirara Island costing about $80 million (P3.98 billion). The grinding plant in Calaca, Batangas, will cost some $50 million (P2.488 billion) and $35 million (P1.74 billion) each for its plants in Zamboanga and Iloilo.
The entire project may take between two and three years to complete. Limlingan said 70 percent of the project cost of about $266 million (P13.239 billion) will be funded by debt and the rest of the $114 million (P5.674 billion) will be by equity.
He said the company has not decided yet on which of the DMCI firms will own the cement-manufacturing venture. Limlingan said the company has commissioned a number of cement -plant manufacturers and is on the verge of entering a contract with them in the coming days or months.