DMCI plans 'quick CHP turnaround'
DMCI [DMC 11.08, down 0.2%; 51% avgVol] [link] revealed a “strategic plan” to “revitalize” Cemex PH [CHP 1.38, up 0.7%; 32% avgVol], its newest and largest acquisition. The first leg of this plan is the completion of the 1.5-million-ton “integrated cement production line” that was already under construction before DMC purchased CHP. Completion of this facility is projected by September of this year and would boost CHP’s annual production by 26%. The second leg is to reduce costs by “transitioning” CHP to a “more affordable energy supplier” like Semirara Mining and Power [SCC 32.95, up 0.5%; 37% avgVol]. DMC also expects to cut down on overhead costs by “onshoring” CHP’s business processes that were handled by CHP’s previous foreign owner. The last leg of the plan is “group synergies”, where SCC expects to increase its coal sales to CHP by 227%, increase its electricity sales to CHP, and increase its “fly ash” sales to CHP. DMC also said that “based on historical consumption patterns”, DMCI and DMCI Homes would be estimated to source 400,000 metric tons of cement from CHP.
