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DIVERSIFIED holding and investment firm Roxas Holdings
Inc. (RHI) is allotting P6.5 billion for capital
expenditure in the current fiscal year up to 2009.
The
capital will be used mainly to bankroll the expansion of
sugar milling and refining arm CADP Group Corp.
The
company’s fiscal year-ends every June.
Of the
programmed capex, chairman and chief executive Pedro
Roxas said P3.9 billion will go to the capacity
expansion of CADP Group’s milling facilities; P1.2
billion to build an ethanol-fuel plant in Negros
Occidental; P400 million to improve refining efficiency;
P100 million for waste-water management; and the rest,
for working capital.
Roxas
Holdings intends to go into debt and dip into its
internal cash to fund its capital expenses.
“The
company is in talks with three banks, namely BPI,
Landbank and BDO-EPCI for a potential P5-billion loan
facility,” said senior vice president for finance
Asuncion S. Aguilar.
CADP
Group’s recent acquisition of a sugar factory from the
US and milling equipment from Australia will raise its
milling capacity from 23,000 tons of cane per day to
35,000 tons. The said retrofitting will be completed
either in October or November 2009.
The
company, which operates sugar facilities in Negros
Occidental and Batangas, is the largest producer of raw
sugar and the second-largest refiner in the country.
Roxas
said the group’s strategic agenda will give them a
competitive advantage against less expensive imported
sugar that will enter the country in 2010.
The
company is gearing up for the entry of cheap sugar as a
result of lower tariffs under the Asean Free Trade
Agreement, which the Philippines signed in 1992.
“In
anticipation of this cutthroat competition, we are
positioning ourselves to continue building up scale to
be more competitive and transforming from a commodity
provider to a value-added entity,” he said.
The
agreement, signed by other members of the Association of
Southeast Asian Nations (Asean), calls for a more than
five-percent drop in duties on goods, which includes
sugar, by 2010.
Roxas
said the group is laying the groundwork for diversifying
its product mix by introducing new sugar and sugar
cane-based solutions in the market.
He added
the company also has plans to expand both its sugar and
upcoming ethanol businesses in the region.
“This
move, he said, would require strategic and financial
partnerships with other industry investors,” Roxas said. |
