Phinma Group sells 51% stake in Union Cement for $214M
- Zinnia B. Dela Peña () - July 7, 2004 - 12:00am
The Phinma Group has sold its 51-percent interest in Union Cement Holdings Corp. (UCHC) to Cemco Holdings for $214 million.

Phinma, one of the country’s largest cement groups, will dispose of a total of 493.85 million shares in UCHC of which 206.33 million (equivalent to a 21.31-percent stake in UCHC) belong to Bacnotan Consolidated Industries Inc. (BCII), the group’s flagship holding company, while the balance is owned by Atlas Cement Corp., a 53-percent owned subsidiary of BCII.

BCII and Atlas Cement will receive $89 million and $125 million, respectively, from the sale of their shares. The transaction is expected to close by Aug. 12.

Cemco Holdings is reportedly 40-percent owned by the global cement group Holderfin and 60 percent by Clinco Corp.

UCHC, on the other hand, is a joint venture between BCII and Holcim – one of the world’s leading suppliers of cement as well as aggregates, concrete and construction-related services, with businesses in over 70 countries. Holcim and BCII own 76 percent of Union Cement Corp., one of the biggest cement producers in the Philippines.

Union Cement is a fully integrated cement manufacturing operation with plants across the Philippines: two in southern Philippines in Mindanao (Misamis Oriental and Davao City) and two in Luzon (La Union and Bulacan).

Its annual clinker capacity of 5.7 million metric tons is about 25 percent of the Philippine total cement production. With four plants, four bulk terminals, three ports and 800 dealers, Union Cement is the only Philippine cement company with a nationwide manufacturing, marketing and distribution network.

The sale was approved by the BCII board last Monday after taking into account the profound changes in the cement business brought about by globalization. "The board came to view that in order for a cement company to maintain a leadership position in the industry and to be globally competitive, it was critical that it have access to the best technology, to the most competitive and consolidated supply sources, to global markets and to massive competitive capital resources," BCII said.

The board also considered the price fair and attractive.

Prices of local cement have shot up as a result of the increase in the costs of power, and raw materials, and the peso depreciation. These factors have also affected the liquidity of most cement firms.

In November 2002, Union Cement acquired 98.6 percent of Alsons Cement Corp. through a share-swap agreement with major shareholders. With the acquisition, UCC re-established itself as the leading cement company in the country with consolidated assets of P27.8 billion.

Union and Alsons now have a combined annual capacity of about 7.5 million metric tons of cement, the biggest in the Philippines where Holcim, French-British Lafarge and Mexico-based Cemex have started to dominate the industry by acquiring control of most plants at the height of the Asian financial crisis in 1997-98.

Asis from cement, the Phinma Group also has interests in reinforced steel bars, power generation and oil exploration, low-cost housing development, financial services and more recently in educational services.

Founded by a group of Filipino industrialists led by the Escaler family in 1956, Philippine Investment Management Inc. (Phinma), started a vehicle for putting together Filipino capital, management and technical expertise, when foreigners owned and controlled most of Philippine industry and commerce.

Since then, Phinma has grown to become a management and holding company of a group of corporations with a combined asset base of over $1 billion and production, marketing and distribution facilities spread around the Philippines.

ALSONS CEMENT CORP ATLAS CEMENT ATLAS CEMENT CORP BACNOTAN CONSOLIDATED INDUSTRIES INC CEMCO HOLDINGS CEMENT HOLCIM PHINMA PHINMA GROUP UNION CEMENT
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