Victorias Milling plans diversification

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MANILA, Philippines—Sugar firm Victorias Milling Corp. plans to diversify into allied businesses to strengthen operations ahead of a low-tariff regime under the Asean Free Trade Area (Afta) by 2015.

 

Within the next two years, VMC may raise fresh funds to go into new ventures, first of which will be power co-generation, then bio-ethanol production and allied infrastructure like co-investing in a railroad system to transport sugarcane.

 

“The challenge is Afta, but we’re transforming VMC,” company chairman Wilson Young said in an interview at the sidelines of the company’s stockholders’ meeting last week.

 

VMC has obtained consent from its shareholders to amend its secondary purpose under the charter to allow the co-generation of electricity for its own use for lighting and other purposes. In addition to the leeway under its existing charter to go into manufacturing, agricultural, educational, mercantile, insurance, trading, real estate and fiduciary businesses, more amendments were made to include infrastructure, transportation, telecommunications, mining, water, power generation, recreation, financial or credit and consultancy.

 

In manufacturing, it was specified in the amendment that this would include but not be limited to ethanol and potable alcohol production, harnessing synergies from its sugar milling operations.

 

Young explained that the company was not planning to pursue all these activities, but only needed the flexibility. The amendments will be presented for approval by the Securities and Exchange Commission and creditor-banks.

 

“We definitely need new money,” Young said, when asked how new ventures would be funded. “We will study that; maybe in the next two years we can tap new loans again.”

 

Power co-generation could be prioritized, he said, because the feed-in-tariff (to encourage renewable energy) was already put in place by the government.

 

Reviving a railway system to transport sugarcane and passengers is also part of VMC’s plan for the future. The company earlier announced plans to spearhead a new railroad project in Negros Occidental to transport sugarcane and passengers. Such an infrastructure could reduce cost by about a third, Young said.

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  • http://pulse.yahoo.com/_AYITA5V33GYZSLC3G37UCVNTKA Ben

    In doing the diversification…may we humbly ask if it is not too much to ask to at least take good care of your sugar farmers? Raise their per day salary, give them benefits and educational plans for their children?  I do hope you succeed but shed off some corporate greediness especially of the shareholders…take good care of your workers please?

    • mapicchu

       you obviously are not aware of vmc’s operations.

      • http://pulse.yahoo.com/_AYITA5V33GYZSLC3G37UCVNTKA Ben

        ..Obviously i am not, but I would rather be wrong than correct since its the people who will benefit from corportate wealth sharing with their employed lot… as you know before  the time magazine reported that Negros island rich in sugar cane malnutrition abound, sugar cane workers earn the cost of one Mc Donald hamburger before, when the sugar cane prices collapsed due to massive importation and dwindling prices of sugar communist guerillas were able to recruit a lot of them. Hence the Ethanol industry was born to absorb excess production that can not be exported or due to overseas prices drop and still create wealth for them, Victoria milling was previously rehabilitated by the government.

      • mapicchu

        Ok lang friend..just wanted to correct your impression…vmc does not have sugar cane farmers in their payroll…they just mill canes brought to their facility by various planters

  • Isagani Gatmaitan

    Parang kahapon lang… when they were deeply in debt…. due to undue diversification… and now…

  • jurbinsky77

    Sugar cane by-products like ethanol or biomass power plant projects are pretty enticing.
    In the US, gasoline has 10% ethanol. The Philippines should enact inclusion of ethanol as a law. 

    Mountain sides should be planted with cassava and corn and sweet potato. In between coconut plants should be planted with vegetables and fruits like passion fruit, pineapple, coffee, jackfruit and eggplants, etc. All sugar and coconut land dwellers should be given hoes, rakes, trowels, spades by the local government or by the DA so that food production starts from those idle areas.

    • Pong_Je

      I think we have already a law on mix of ethanol on gasoline.

    • http://pulse.yahoo.com/_V6JTYBZXUSXIDCD67ACZK7NUKM Joseph

      Our gasoline already has the 10%.

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