Cement plant reopens after 20 years-A A +A
Thursday, March 21, 2013
AFTER 20 years of being idle, French cement firm Lafarge Republic Inc. (LRI) will resume operations of its Danao City plant next month amid a robust construction industry.
Lafarge officials yesterday said the reopening of the Danao City plant is part of the company’s efforts to expand its production capacity starting in the first half of this year.
"This significant milestone is one of many that we have been working on to ensure our commitment to support the increasing investments through private, government, and public-private partnership (PPP) construction projects throughout the Philippines, especially in Nothern Mindanao and the Visayas," said Don Lee, director of LRI and president of Lafarge Holdings (Philippines) Inc.
He said the Danao plant is one of several capacity expansion projects being undertaken by the company to respond to the growing demand of construction projects.
"The re-start of this facility reflects the economic history of the Philippines," Lee said. "We share the same optimism, given the huge demand (in construction), not only in Cebu, but in other areas of the country as well."
LRI president Renato Sunico said 15 million tons of cement were sold in the Philippines before the Asian financial crisis but demand fell as the construction industry was among those badly hurt by the economic crunch.
Demand for cement started picking up only in 2010. In 2012, 18 million tons of cement were sold, Sunico said.
Sunico said the reopening of the plant came in at the appropriate time as the country is experiencing a construction boom. "We feel that this surge in demand will continue given the various government projects that are still to be constructed," he added.
The Danao plant is Lafarge Holdings' sixth cement facility in the Philippines. The company has five other plants, mostly located in Luzon and one in Mindanao.
Lee said the Danao plant, a new generation facility, will be equipped with state-of-the-art control systems, third generation separator and a fully-automated weight feeder system, among others.
With the reopening of the Danao plant, Lafarge’s production capacity will increase by
a million tons.
Lafarge aims to supply an additional 200 kilotons of cement per year to Luzon, 650 kilotons to the Visayas and 100 kilotons to Mindanao.
French Ambassador to the Philippines Gilles Garachon described the reopening of the facility as "extremely important" to the development of the Philippines given the number of private and government infrastructure projects in the pipeline.
Garachon said the progress of Lafarge, particularly in the Philippine market, strengthens the trade relations between Europe and the Philippines.
Cebu Chamber of Commerce and Industry (CCCI) president Lito Maderazo said he is happy that Cebu has attracted another foreign direct investment that is beneficial for the province's infrastructure development.
"It's a sign of good times for Cebu and the Philippines. I really hope we can sustain the growth and we can only do this by integrated urban planning," said Cebu Business Club president Gordon Alan Joseph in a text message.
Jose Soberano III, chief executive officer of real estate development firm Cebu Landmaster Inc., said LRI's reopening will "heighten the competitiveness of cement in terms of pricing, while enhancing stock inventory, which will definitely augment the supply side requirement of this vital commodity."
The Danao cement facility which was established in 1960 was then known as Universal Cement. In 1998, the plant was acquired by Lloyd Richfield Industries Corp., which was later taken over by the Lafarge Group in 2007.
Lafarge operated the plant for 15 years then shut it down.
Published in the Sun.Star Cebu newspaper on March 22, 2013.