Eduardo A. Sahagun, SVP of Holcim Philippines Inc. told reporters at the launch of the Holcim WallRight they are going to build four silos with an estimated investment of P40 million to P50 million each for a capacity of 5,000 tons.

At present, its WallRight products are coming its La Union silo. The next silo to be constructed for this specialty product would be in Davao.

Sahagun has explained that its new masonry cement is used specially for hollow block laying, filling and plastering. It has better workability properties, 200 percent more bond strength, increased water retention, and smoother texture compared to the general purpose cement.

This transalates to 32 percent more hollow blocks that can be filled and more area coverage for plastering.

As such, it would ensure wider coverage in its application, minimize wastage and is P4 cheaper than the general purpose cement or at P176 per 50-kilogram bag as against P180 of the general purpose cement.

WallRight’s application is for walls of buildings, industrial, housing or any construction.

"Holcim WallRight helps save on construction cost by 32 percent, and at the same time, you will be able to build better quality walls," Sahagun said.

Based on their study, 30 percent of any construction work requires this kind of masonry cement. Holcim intends to produce 40,000 tons per month or 1 million bags a month of WallRight.

Sahagun said that even before the prices of cement and other construction materials had gone up, the company had already thought of launching this specialty product.

At present, Holcim is trying to provide the best cement for the right application. Holcim Excel is the higher early strength for use in general application, while Holcim Excel Bulk is the high performance Portland cement for high strength requirements.

Holcim, a leading cement player, expects WallRight to be an additional source of revenue. It is being positioned to grab the market share of other cement companies’, which have not produced the same masonry cement and not eat up Holcim’s own market share of general purpose cement.

"Hopefully, WallRight does not eat our own market share but somebody else’s general purpose cement," Sahagun said.

Holcim sells an average of 8 million to 9 million per month of Portland cement. The company’s entire production capacity is placed at 5.5 million tons.

The Swiss-owned company is also exporting some of the excess cement production from its plant in Lugait, Misamis Oriental to the Middle East, Africa, Indian Ocean and the Pacific Islands.

Exports account for 7 to 10 percent or 600,000 tons a year of the company’s total production. The three Mindanao plants one in Misamis and 2 lines in Davao are also currently supplying 1 million bags a month to Luzon, which is running out of capacity following its mothballed Bulacan line, which would be put on stream by 2011 yet.

The company has two mothballed production lines one in Davao with a production capacity of 600,000 tons and the Bulacan line with 850,000 tons.

Sahagun said that increase in cement prices is largely due to the increase in the price of coal, which accounts for 40 percent of variable cost of a cement company.

The last price hike in June was based on 0 per ton of coal, which was more than double that of the per ton in April last year.

The latest indicative price index for coal has shown prices of coal going up to 0 per ton. Cement firms import coal from Indonesia, the cheapest coal supplier.

According to Sahagun, for every increase in coal prices this would translate to P2 increase price of per bag of cement.

With the softening of oil prices in the global market, Sahagun expects prices of coal to also soften.(BCM)