SUGAR miller Roxas Holdings Inc. (RHI) is set to spend P600 million on improving its operational efficiency in an effort to capture market demand.
Arcadio Lozada, RHI chief operating officer, said the money will mainly go to the milling operations in Negros.
The company recorded weak sugarcane harvest this year due to last year’s delayed rainfall which took its toll on cane quality.
The Sugar Regulatory Administration reported that production this year will drop to 2.33 million metric tons (MT), a 5 percent decline from 2.46 million MT last year.
“It was compounded by farmers opting to send most of their harvest to other millers because they were able to recover more sugar from canes. But we’ve been improving our recovery rate since last year,” Lozada said.
The gap in milling output between Roxas Holdings and its competitors has been narrowed down to 6 percent from the 10 percent, he added.
“By next year we expect to erase it completely. That’s why we’re spending P600 million,” Lozada said.
“We hope to stabilize the cane supply situation across all our operations in Negros Occidental and Batangas through the programs we have started to roll out,” RHI Chairman Pedro E. Roxas said.
For his part, RHI President Renato C. Valencia said: “Most of our subsidiaries performed positively in the third quarter and we are looking at further improving the results by the fourth quarter.”
The investment comes after the company recorded lower profits in the first nine months of the fiscal year ending September. Net profit declined by 28 percent to P329 million from P455 million.
Consolidated revenues increased by 3.17 percent to P6.5 billion from P6.3 billion.
Roxas Holdings is the third-biggest sugar refiner in the country with an ethanol plant in Negros Occidental and three sugar mills in Batangas and in Negros Occidental with an aggregate capacity of 38,500 tons a day.