Huaxin Cements Contract in Davao

Huaxin Cements Contract in Davao

Buildings specialist Huaxin Cement has signed a contract with Holcim Philippines to build a new production line at its Davao plant in the south of the Philippines.

The US$245 million deal is expected to drive major breakbulk activity over the build period with Huaxin providing all engineering, procurement and construction services.

“The subject of this transaction is the Kalayaan 2 project – including the HPI BL003 project, the WHR project and LG001 project – and engineering general contracting project,” a spokesperson for Huaxin said.

Holcim Philippines is part of Swiss-based building materials and aggregates company the LafargeHolcim Group.


Transport Risks

Kalayaan 2 project includes development of a new clinker production line with capacity for 6,000 tonnes per day, and will require detailed transport planning to account for damaged infrastructure and increased risk in the country due to a series of natural disasters in recent years.

“The Philippines is a country that has been hit by natural disasters, typhoons, earthquakes, mudslides and natural disasters such as volcanoes may affect the construction progress of the project,” a Huaxin spokesperson said.

Based in Huangshi, China, Huaxin Cement manufactures building materials, and in 2016 signed a framework agreement with LafargeHolcim for the purchase of most of its non-listed Chinese cement assets in return for a a 41.8 percent stake held by LafargeHolcim in Huaxin Cement.


Davao Consulate Opens Visa Services

The deal for the construction of the Davao production line marks another step in the closer development of China and the Philippines. Last month, the two nations signed a memorandum of understanding for joint oil and gas development in the South China Sea widely expected to drive growth in breakbulk demand across multiple sectors.

The deal signaled an improvement in relations between the two countries following longstanding territorial and diplomatic disputes. The Philippines had been closely aligned with the U.S. until the election of current president Rodrigo Duterte, who has moved the country closer to China’s sphere of influence.

This week, the Chinese consular office in Davao opened visa services, allowing citizens to apply for visas to the People’s Republic of China, ahead of the launch of the first direct Davao City-Jinjiang flight on Dec. 18.

Photo: Davao facility. Credit: Wikimedia