MANILA, Philippines - Sugar and bio-energy company Roxas Holdings Inc. (RHI) has set aside up to P1.7 billion for capital expenditures this year to improve its sugar business.
On the sidelines of the company’s annual stockholders’ meeting Wednesday, RHI chief finance officer Celso Dimarucut said the bulk or roughly P1 billion of this year’s capex would be spent on its sugar business.
“The total budget for capex this year, which includes completing the projects that we’ve started in the prior year, would be between P1.5-P1.7 billion,” Dimarucut said.
Apart from its sugar business, RHI is also engaged in the production of fuel ethanol for local oil companies, as well as the power generation business.
RHI president and chief executive officer Hubert Tubio said the local sugar industry is facing challenges owing to competition in the ASEAN region.
“Thailand is opening up new areas to boost its sugarcane industry. It is converting about 400,000 hectares of former rice lands to cultivate sugarcanes, and support the expansion of 12 existing sugar mills and the building of 20 new ones. Thus, dramatically increasing its sugar production from the present 11 million tons to 20 million tons of sugar annually by 2026,” Tubio said.
In contrast, the Philippines only produces around 2.2 million to 2.4 million tons of sugar annually, Tubio added.
Tubio said production costs would have to be more competitive in anticipation of lower sugar prices in the coming seasons.
“To do that, our mills must have efficient equipment and effective people, and that our relationship with planters and other partners is well nurtured, among others,” the ceo expressed.
Tubio likewise cited the need to improve infrastructure in order to allow the country to compete with its peers in the region.