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RHI selling Batangas sugar mill, refinery to URC

/ 05:17 AM August 24, 2018

The country’s largest integrated sugar producer, Roxas Holdings Inc. (RHI), has decided to sell its sugar milling and refining operations in Batangas to Gokongwei-led Universal Robina Corp. (URC).

In a filing in the Philippine Stock Exchange, executive vice president and CFO Celso T. Dimarucut said the transaction—which was still undergoing review by the Philippine Competition Commission—would help to significantly reduce RHI’s debt.

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“We will prepay all long-term debt and reduce short-term debt to levels sufficient for our working capital needs,” he said.

“Our strengthened balance sheet will enable us to be more agile in responding to changing market conditions and will give us the flexibility to pursue opportunities to grow at a much faster pace,” he added.

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RHI’s operations in Nasugbu, Batangas, are under its wholly owned subsidiary, Central Azucarera Don Pedro Inc. (Cadpi). It produces about 3 million 50-kilogram bags of sugar yearly—roughly 6 percent of the country’s total yearly sugar output.

The deal will bring URC’s sugar canemills in the country to seven. In addition, URC operates a 20-megawatt cogeneration plant, a 100,000-liter-a-day fuel ethanol plant and a 40-ton-a-day liquid CO2 plant.

“We believe that URC’s acquisition of the milling and refining assets of Cadpi will create synergies in the sugar industry in Batangas that will benefit all stakeholders—sugarcane farmers, sugarcane workers and the communities,” URC chair Lance Y. Gokongwei said.

“URC strongly believes in the long-term viability of the sugarcane industry in the Philippines and we shall always continue supporting the
sugarcane farmers and workers,” he added.

RHI’s decision came at a time when the country’s refined sugar production was not able to meet the domestic demand, particularly of industrial groups, which led the government to allow the importation of some 200,000 metric tons of sugar from Thailand.

Moving forward, RHI president and CEO Hubert D. Tubio said the sale of their sugar milling and refining facilities in Nasugbu would allow the company to focus on its operations in Negros.

Considered the “sugar bowl of the Philippines,’ the Visayan province accounts for more than half of the country’s total sugar output.

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RHI has grown its sugar milling plant and two ethanol production plants in the province over the last two crop years as it prepares the sale of its operations in Batangas, the company’s disclosure read.

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TAGS: Philippine Stock Exchange, Roxas Holdings Inc. (RHI), sugar, Universal Robina Corp. (URC)
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