December 14, 2022
RHI Optimistic on its Sugar Refinery Business
MANILA, PHILIPPINES – Sugar and ethanol producer Roxas Holdings, Inc. (RHI; PSEi: ROX) today reported the results of operations and financial position for the fiscal year ended
30 September 2022.
Chairman Pedro O. Roxas highlighted that “the Philippine sugar industry is one of the main agricultural sectors vulnerable to severe climate change. A recent example being Typhoon Odette earlier in crop year 2021-2022, which negatively impacted sugarcane production, resulting in a general decline in cane supply, as well as, lower sugar recovery. These unfavorable weather conditions, including La Niña, have been adversely affecting cane supply in recent years. In fact, for the upcoming crop year 2022-2023, the USDA Foreign Agricultural Service, in its October 2022 report, tempered its initial projection of 2.0 million metric tons (MT) of raw sugar production down to 1.85 million metric tons (MT), attributing this to a combination of weather disturbances and low fertilizer application due to soaring fertilizer prices drastically affecting sugarcane production in the Philippines.” This is also aligned with Sugar Regulatory Administration’s (SRA) forecast of 1.876 million MT as noted in Sugar Order No. 1 (SO1), released on September 13, 2022.
Given the above, he stated that “RHI’s business pivot to focus on its sugar refinery is proving to be a “just-in-time” project. The Batangas area, where RHI’s subsidiary Central Azucarera Don Pedro (CADP) has been operating a sugar mill and sugar refinery, is more susceptible to challenges in the farming sector than the other sugar-producing region of Western Visayas because of more agricultural land conversions and the lack of an established irrigation systems. Thus, the completion of the stand-alone refinery project of CADP in 2022, which removed the refinery business’ dependency on the mill, particularly on the mill-generated fuel bagasse and steam, has allowed the refinery plant to operate for almost ten months – significantly longer than the other sugar refineries in the country. We feel that this will provide RHI’s stakeholders with a viable and more sustainable business, considering the continued strong demand for refined sugar.”
On the other hand, President and CEO, Mr. Celso T. Dimarucut, is optimistic that CADP will be able to refine 5 million (50kg) LKG bags next crop year, close to its maximum capacity. He said that, “RHI is set to help the Government ensure a sustainable supply of quality refined sugar at reasonable prices, and also decrease our country’s refined sugar importation. We have also been actively partnering with other millers to value-add to their raw sugar output.”
Through the years, CADP has built a strong brand and reputation in the market for its quality refined sugar, having passed the most stringent scrutiny of multinational customers and obtained certifications from independent agencies. “RHI is leveraging this first-mover advantage and CADP’s strategic location to enable it to service most of the industrial customers in the key manufacturing hubs of Southern Luzon and Metro Manila,” he added.
On the other hand, RHI’s ethanol unit, San Carlos Bioenergy, Inc. (SCBI) continues to reap the advantage of its flexibility in the sourcing of primary raw materials. “We have recorded substantial improvements in SCBI, with the increase in milling, while still maintaining flexibility in the use of molasses or sugarcane syrup, as opportunities arise”, he stated.
Overall, RHI has pared down its losses and shall report a Core Net Loss of Php752Million for the current fiscal year, versus Php939Million in the previous fiscal year ending September 30, 2021.
Mr. Dimarucut added that, “Management shall continuously review and implement measures to address the major challenges experienced by its operating units particularly CADP, and these efforts will further ensure sustainable operations for the RHI Group going forward.”
RHI is listed in the Philippine Stock Exchange (PSEi: ROX). Further information can be obtained by visiting the web at www.roxasholdings.com.ph