Sugar firm Roxas Holdings Inc. expects to get a majority stake in a joint venture with Global Business Power Corp. that will put up a 40-megawatt co-generation plant in Negros Occidental.
The partnership has earmarked about $105 million to $110 million to build this co-generation plant, RHI officials said on the sidelines of RHI’s recent annual stockholders’ meeting.
Scheduled for completion in 2018, the facility will rise in RHI’s complex near its Central Azucarera de la Carlota Inc. plant in La Carlota City.
“The exact dates are still being discussed but the groundbreaking will be sometime in the middle of this year. That will mean a target completion of 2018 or about two years from the start of the project,” RHI chair Pedro Roxas said.
He said the project should be completed in time for the milling season for 2018 to 2019.
Moving forward, he said RHI would have three business segments—sugar milling, bioethanol production and power generation.
In the future, he said RHI should ideally have a third of business coming from each segment.
Such a realignment, he said, would make RHI less vulnerable to the volatility of sugar prices.
RHI president Hubert Tubio said that based on the current discussions, RHI would take a majority position in the joint venture.
On the bioethanol business, Roxas said RHI accounted for about 60 percent of the market but with some new players coming in, he said this market share would likely drop.
However, he noted that RHI was also expanding this business.
This year, RHI has set aside P1.4 billion for capital spending, double the budget previously targeted.
Of this amount, P600 million will be used for the ethanol business and P800 million for the sugar business.
RHI’s focus is to improve operational performance, cost efficiency and cane supply.
First Pacific Co. Ltd., which now controls majority of RHI, earlier raised P2.16 billion from the sale of a total of 14.8 percent stake in RHI’s rival sugar miller and refiner, Victorias Milling Co.
“I think it’s a rational move by our deputy chair (Manuel V. Pangilinan). In VMC, they are just a minority and here, they are the majority and we have more resources and assets in RHI. We can do more,” said Tubio, who had worked at VMC.