th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

Ramon Ang’s Cement Company Launches IPO Amid Rough Period for Bigger Rivals

Eagle Cement, the biggest Filipino-owned cement maker, is selling shares to the public starting May 16
By Lorenzo Kyle Subido |

 

Eagle Cement Corp., the country’s biggest locally owned cement manufacturer by production volume, is selling its shares to the public for the first time from May 16 to 22. It plans to list at the Philippine Stock Exchange (PSE) on May 29. It is the country’s fourth biggest cement producer after multinational companies Holcim-Lafarge, CRH-Aboitiz and CEMEX.

 

The company is owned by billionaire Ramon Ang, president and COO of diversified conglomerate San Miguel Corp., which is undertaking a number of major infrastructure projects. He is one of the Philippines' 14 dollar billionaires according to US-based magazine Forbes. The publication estimated his net worth at $1.4 billion as of March 2017, making him the 11th richest billionaire in the Philippines.

 

Riding the construction boom of the country, Eagle Cement ended 2016 with revenue amounting to Php13.3 billion, a 20-percent increase from the year before, which the company attributes to increases in sales volume and sales price. Its net income experienced a similar 12-percent increase to Php4.1 billion in the same period.

 

Demand for cement has surged in recent years on the back of rising private and public construction activity. The average growth rate in cement demand rose to 9.7 percent in the last five years to 2015, up from six percent in the previous five-year period from 2006 to 2010. In the aftermath of the Asian financial crisis, cement demand fell by an average of 0.6 percent a year from 2001 to 2005.

 

Eagle Cement is rolling out its initial public offering (IPO) as bigger rivals such as Holcim and CEMEX go through a rough patch in the early part of the year. After reporting revenue growth last year, both companies recently disclosed lower gross sales in the first quarter of 2017. Holcim said revenue in the previous quarter fell by 12 percent to Php8.8 billion from a year ago while CEMEX said revenue declined 15 percent to Php5.4 billion from the same period last year.

 

 

Holcim’s Philippine unit said that “cement demand in the country slightly declined from that of the same period last year, when pre-election spending on infrastructure was accelerated.” It also cited lower infrastructure spending and tighter competition in the industry as some of the factors for the drop in its revenue. CEMEX cited the same factors but added adverse weather conditions, especially in January and February.

 

Amid softening cement demand hitting its bigger rivals, Eagle Cement remains optimistic. In fact, the company plans to use the proceeds from the IPO to partially fund the construction of a cement manufacturing plant in Cebu. Expected to be completed by 2020, the Cebu plant will produce between 1.5 million and two million tons of cement each year and will expand the company’s market reach to the Visayas and Mindanao.

ADVERTISEMENT - CONTINUE READING BELOW

 

Eagle Cement currently operates the country’s largest integrated single plant in Bulacan. It produces about 5.1 million metric tons of cement a year, which is equivalent to 130 million bags, and distributes cement to several areas in Luzon.

 

Established in 2010, Eagle Cement was one of the cement suppliers for some of San Miguel’s major infrastructure projects such as the NAIA Expressway project in Parañaque and Pasay as well as the Southern Tagalog Arterial Road or STAR Tollway in Batangas. It was also one of the suppliers of the Petron Bataan Refinery, the largest oil refinery in the Philippines. Its current projects include the NLEX-SLEX connector road that will link the Metro Manila Skyway to the C3 Road in Caloocan.

 

Eagle Cement’s shares can be bought initially at Php15 apiece. The company will sell 500 million shares during the IPO, aiming to raise Php7.5 billion. The company also has an over-allotment option of 75 million shares, potentially adding Php1.1 billion worth of funds.

 

The IPO is being overseen by China Bank Capital Corp., PNB Capital and Investment Corp. and SB Capital Investment Corp., who all serve as joint issue managers, joint lead underwriters and joint bookrunners of the offer.

 

Related story: 5 Things to Know Before Investing in IPO Stocks 

 

Interested investors are advised to read through the company’s preliminary prospectus for more information on the company and the offer, and to consult investment professionals on the risks of investing in stocks.

 

Eagle Cement’s IPO marks the second for 2017. It follows the listing of home improvement store chain Wilcon Depot last March 31.

 

 

*****

 

 

 Lorenzo Kyle Subido is a staff writer of Entrepreneur PH

Latest Articles

PH Maintains Spot as Fastest-Growing Economy in ASEAN

The Philippines’ economic growth has been steady compared to that of its neighbors

byPauline Macaraeg | August 17, 2017 10:00:00

GDP Growth in Duterte's 1st Year Highest Among Past 5 Presidents

A look at annual GDP growth rates in the first full year of the past five presidents

byLorenzo Kyle Subido | August 17, 2017 10:00:00

Science Says: Don't Use Emojis at Work

Smiley faces could unfavorably tip the scales if you're trying to make a good first impression

byNina Zipkin | August 17, 2017 06:00:00

Attention Millennials: You Need This Advice to Be Successful

3 ways young entrepreneurs can earn trust in the workplace and succeed

byCandace Sjogren | August 17, 2017 02:00:00

“The Poor Are More Honest Than the Rich” — Washington Sycip

What I've Learned: Washington Sycip, 95, founder of SGV&Co. and the Asian Institute of Management

byAudrey Carpio for Esquiremag.ph | August 17, 2017 00:00:00

Would You Invest Php2M-Php3.5M in a Franchised Stall of Kris Aquino’s Nacho Bimby?

She's opened 11 branches in 2 years but wants to build 20 more via franchising by end of 2017

byElyssa Christine Lopez | August 16, 2017 14:00:00

Top Executives’ Grad Schools: Men Are From AIM, Women From UP, DLSU

Only a handful of female directors in the biggest listed PH went to graduate school

byPauline Macaraeg | August 16, 2017 13:00:00

6 Things Your Small Business Needs to Spend More Money On

Businesses are incredibly difficult ventures to start

bySarah Landrum | August 16, 2017 08:00:00

Getting a Good Night's Rest Can Help You Focus and Your Brain Forget

Different phases of sleep affect how your brain processes information

byNina Zipkin | August 16, 2017 06:00:00

(Infographic) How to Win an Argument, According to Science

With a few simple tricks, you can consistently be on the winning side

byRose Leadem | August 16, 2017 02:00:00

Food Business Idea: Sell These Graham Balls for Php5 per Piece

You only need 4 ingredients to make these marshmallow graham balls

byCatalina Altomonte for Yummy.ph | August 16, 2017 00:00:00

Soon from Cebuana Lhuillier: Insurance Coverage Via SMS for Only Php10

PH’s biggest pawnshop aims to insure two million Filipinos this year

byCherrie Regalado | August 15, 2017 13:00:00