SL Agritech issuing P1.5-B STCP for expansion

MANILA, Philippines - Leading hybrid rice producer SL Agritech Corp. is issuing up to P1.5 billion worth of short-term commercial papers to fund its continued expansion.

The company was assigned an issuer rating of PRS Aa (corp.) by Philippine Rating Services Corp. The rating means the issuer has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.

An issuer rating is an opinion on the general and overall creditworthiness of the issuer, evaluating its ability to meet all its financial obligations within a one-year period.

In issuing the rating, PhilRatings took into account SL Agritech’s leading position in the Philippine rice industry, positive growth prospects and sustained profitability.

SL Agritech is reportedly the largest local hybrid rice seed producer in the Philippines.

The company’s flagship product, SL-8H, accounts for 80 percent of total market share.

To boost its market share, SL Agritech introduced two new hybrid rice seed varieties, the SL-12H and the SL-18H.

SL Agritech’s premium rice products, on the other hand, are offered under Doña Maria, Cherry Blossom, and Willy Farms, each targeting a specific market segment.

The company introduced the Willy Farms brand last year to cater to middle-income earners.

SL Agritech is also exploring opportunities overseas, particularly in India and China, two of the largest rice markets in the world. It has already began exporting to neighboring countries such as Indonesia, Vietnam and Bangladesh.

The firm saw its net income surge 80.4 percent to P459 million for fiscal year ending May 31, 2016 on higher margins.

It plans to debut on the Philippine Stock Exchange next year, targeting to raise up to P8 billion.

Company chairman Henry Lim earlier said they were looking at selling at least 25 per cent of the company. Proceeds from the planned initial public offering will be used to further expand its hybrid rice production business.