SUGAR firm Roxas Holdings Inc. (RHI) on Wednesday said it will double its capital expenditure this year to P1.4 billion from about P700 million in 2015 to beef up bio-ethanol production.
Hubert Tubio, newly appointed RHI president and chief executive officer, said some P600 million of the total capex for 2016 will be earmarked for bio-ethanol while the remainder will go to its sugar business.
“The combined bio-ethanol business last year accounted for more than P200 million of our net income. And we’re hoping that moving forward, we’ll be able to get our steady stream of income,” Tubio told reporters on the sidelines of the company’s annual stockholders meeting on Wednesday.
He said they hope to improve the yield of their farmlands from 50 tons per hectare per year to about 80 tons per hectare.
“There has to be no stoppages of production due to the lack of canes,” Tubio said.
RHI is also spending between $105 million and $110 million to build a 40-megawatt bio-ethanol power plant in Negros, although the amount is excluded from its capex.
The facility will form part of the cogeneration plant being built by RHI and Global Business Power Corp., the power generation arm of the GT Capital Holdings Inc. It will be erected at the RHI complex near the company’s Central Azucarera de la Carlota Inc. plant in La Carlota City in Negros Occidental.
RHI chairman Pedro Roxas said the plant will start construction by the third quarter of the year and is expected to be completed by 2018.
RHI earlier reported a net loss of P124.83 million for its first fiscal quarter from a net profit of P8.8 million a year earlier due to insufficient cane supply and defective sugar plants.