By Denise A. Valdez, Reporter
HOLCIM Philippines, Inc. is set to remain part of the global group of Switzerland-based LafargeHolcim Ltd. after the failure of its $2.15-billion sale to San Miguel Corp. (SMC).
During the company’s virtual stockholders’ meeting on Wednesday, Holcim Philippines President and CEO John William Stull said LafargeHolcim is no longer keen on divesting in the local unit.
Instead, Holcim Philippines will focus on long-term plans to expand its cement capacity in existing plants in Luzon and Mindanao.
“In May 2020, the agreement between Top Frontier Holdings and LafargeHolcim for the sale of its shares lapsed without approval of the PCC (Philippine Competition Commission). Therefore, (Holcim Philippines) will remain as (part of the global LafargeHolcim group), and we will grow with the company and with the country,” Mr. Stull said.
“We’re very pleased to note that we are no longer in the sales process and we’re very excited about the future working with one of the largest and most successful companies in the building materials sector, and we’re happy to remain part of the group,” he added.
To recall, SMC, through First Stronghold Cement Industries, Inc. — a unit of SMC subsidiary San Miguel Equity Investments, Inc. — was supposed to buy 5.53 billion common shares in Holcim Philippines at $2.15 billion.
However, SMC withdrew the plan in May after the PCC flagged competition concerns with the proposed acquisition.
The regulator said since SMC is under Top Frontier Investment Holdings, Inc., which has two cement plants opening in the next two years, the acquisition of Holcim Philippines may substantially lessen competition in the grey cement market in Luzon.
With the acquisition scrapped, Holcim Philippines will remain part of the LafargeHolcim global group. Mr. Stull said the company is now planning for long-term growth in the country, particularly its cement capacity and waste management unit Geocycle.
“We have a lot of confidence in the country for the long term, and we believe the Philippines has a great opportunity for investment,” he said.
Mr. Stull also said the company is studying projects such as increasing the capacity of both Holcim Philippines’ plants in Luzon and Mindanao.
“As we advance through this pandemic, we get more visibility on the future, we’ll be bringing those projects forward to the board,” Mr. Stull said.
Earnings of Holcim Philippines fell 29% to P501.54 million in the first quarter due to the impact of the coronavirus pandemic to its operations. Its shares at the stock exchange slipped 23 centavos or 4.20% to P5.25 each on Wednesday.