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A
PUBLICLY-LISTED sugar conglomerate has completed a
multibillion peso-bank loan which will be used to
improve its operations so that it can better compete
against low-priced imported sugar entering the
Philippines beginning 2010.
In a
statement, sugar conglomerate Roxas Holdings Inc. (RHI)
also said it will use its P4.69 billion borrowing from
Banco De Oro-Equitable PCIBank to fund the expansion of
the sugar milling and refining subsidiaries, increase
its revenue-generating capability, and enhance
cost-competitiveness.
These
are among the strategies to be implemented by RHI to
boost its competitive advantage.
The
company, a wholly-owned unit of publicly-traded CADP
(Central Azucarera Don Pedro) Group, will also be
acquiring two sugar mills from the United States and
Australia, which will increase its capacity by 52
percent.
After
the P4.69-billion loan, the company will also secure
another P2 billion from two other lenders to complete
the P6-billion capital it needs to finance its expansion
program. The borrowing will bankroll the construction of
an ethanol plant.
The
company engaged Macquarie Securities (Philippines) Inc.
as its financial advisor on the strategic initiatives
and capital raising activities.
“We are
optimistic that the strengthening and expansion of our
sugar business will position us to overcome the threats
and take advantage of the opportunities the domestic
sugar industry will face,” said Pedro Roxas, RHI
chairman and chief executive. “We are implementing new
systems that will ensure our survival during this period
and enable us to remain as a strong industry leader.”
The
company is likewise diversifying its business activities
by entering the energy sector through manufacturing
potable and fuel ethanol. This is to take advantage of
the definite market brought about by the enactment of
the Biofuels Act of 2006, which mandates the use of
locally sourced biofuels.
“The
Biofuels Act gives RHI an avenue for growth outside of
sugar. The absence of fuel ethanol producers in the
Philippines, to date, as well as the guaranteed market
for ethanol, gives us a competitive advantage,” Roxas
said. |
