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MANILA, Philippines – The largest sugar mill operator in the Philippines got the corporate regulator’s nod to expand into allied businesses for products or services it uses for its own or plans to sell to others.
In a disclosure on July 4, Victorias Milling Co. Inc. said the Securities and Exchange Commission (SEC) has approved its proposed amendment to the articles of incorporation, enabling it to invest in other activities aside from sugar milling.
The Lucio Tan-led company said SEC approved the amendment of the company’s charter so it could include co-generation of electricity as a secondary purpose. It also got the go-signal to venture into manufacturing of ethanol and/or potable alcohol production, infrastructure, transportation, telecommunications, mining, water, power generation, recreation, financial or credit and consultancy.
The company’s plans to invest in allied businesses would enable it to remain competitive by 2015, which is the period where tariff on sugar drops by zero under the Asean Free Trade Area.
It has been studying the possibility of developing a railway system within the sugar plantation and milling plant in Negros Occidental to reduce the transportation cost.
Transportation currently accounts for 40% of total production cost.
The sugar milling firm said it is willing to talk to other sugar milling companies operating within the area, including Hawaiian Philippine Co. Sugar, Lopez Sugar Corp. and First Farmers Holdings, to jointly develop the railway system.
The company is now partly owned by beer and tobacco tycoon Lucio Tan whose business group acquired debts of the financially troubled company about a decade ago. It has been under corporate rehabilitation since 2000.
In 2012, Victorias Milling posted a net income of P556 million, up 39% from P400 million in 2011.
The company also posted significant improvement in the company’s capital structure posting a net equity of P1.8 billion in 2012 due to the conversion of certain convertible notes into equity, as well as the significant reduction of the company’s deficit.
It has targeted to reduce its debt to P2.7 billion by June 2013.
Its sugar plant facilities are located in Victorias City, Negros Occidental. Through its operating subsidiaries, Victorias Milling is also engaged in fish canning, real estate, sugar sacks manufacturing and packaging, and golf course and restaurant operations. – Rappler.com
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