Apo Cement Corp., a unit of Cemex Holdings Philippines Inc., on Monday signed a supply agreement with Sem-Calaca Res Corp. for the power requirement of Its cement plant facilities in Naga, Cebu.
Sem Calaca is the retail electricity supply arm of Semirara Mining and Power Corp.
“The term of this supply agreement will expire on 25 December 2024,” the company said in a regulatory filing.
The contract with Apo Cement is for 44 megawatts of electricity. There is no fuel pass through provision in the contract.
Engineering conglomerate DMCI Holdings Inc. earlier said it can turn around the operations of Cemex as it undergoes expansion and the synergies it can give the businesses controlled by the Consunji group.
“While cement demand is currently soft, we expect it to rebound as our turnaround plan progresses, supported by the Build Better More program and the anticipated easing of interest rates next year,” DMCI chairman and president Isidro A. Consunji said.
Cemex is the country’s fourth-largest cement manufacturer. It reported losses of P1 billion in 2022 and another P2 billion last year due to escalating costs and reduced sales volumes.
The company, however, is constructing a 1.5-million ton integrated cement production line at its Solid Plant in Antipolo, Rizal which will double its cement production capacity in Luzon.
It will also boost Cemex’s installed capacity by 26 percent to 7.2 million tons annually from 5.7 million tons.
The new production line is set to begin operations by September this year.
DMCI anticipates power, fuel and other production supplies costs representing 73 percent of Cemex’s cost of sales in 2023 to fall due to normalizing market prices and the transition to a more affordable energy supplier, Semirara Mining.
