Eagle Cement sets sights on 'aggressive' expansion

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Metro Manila (CNN Philippines, June 30) — Newly-listed Eagle Cement Corp. is planning an aggressive expansion to make the most of the country's infrastructure boom, with new plants to be constructed and possible acquisitions eyed, officials have said .

The Ramon Ang-led cement maker enjoyed a 30% annual jump in its profits, earning P1.03 billion in the first quarter, it said in a June 29 statement. It's a strong showing as Eagle Cement just listed on the Philippine Stock Exchange exactly a month before.

This was driven by a 19% increase in net sales, totaling P3.77 billion as of March.

In a press briefing on Friday, Eagle Cement President and CEO Paul Ang declined to give exact figures on the volume of sales, but said there was "double-digit growth" from the same period last year. The higher sales was partly offset by lower cement prices. Ang confirmed Eagle Cement had a "single-digit" price reduction due to tight competition.

Still, the company was optimistic of staking its claim in the growing cement market, especially as the government sets out to build 75 major infrastructure projects over the next five years, including highways and bridges that will connect different regions across the country.

"We have the best margins compared to competition. That gives us an advantage, so we can compete whether prices go down, more imports come in, or our competitors try to drive us out of new target markets," Eagle Cement Chief Financial Officer Monica Ang told reporters. She tagged southern Luzon, Visayas and Mindanao as the company's next priority areas.

To support this, Eagle Cement will add a third production line to its Bulacan plant, which should start operating by the first quarter of 2018. It will also break ground on a new facility in Cebu by the last quarter of this year, slated for completion in 2020.

The Bulacan expansion will raise Eagle Cement's annual capacity to 7.1 million metric tons, while the new Cebu plant will bring it to 9.1 million metric tons. The company presently produces roughly 5.1 million metric tons.

Eagle Cement is also open to acquiring other plants, though officials declined to give details other than they were "conducting due diligence."

"We have three main considerations: the proximity to our strategic markets, the availability of raw materials, and the valuation - at what price are they willing to sell to us," Monica Ang said.

Paul Ang added that they've already received several offers. "They know that we are aggressively expanding," he said.