URC buys milling assets

GOKONGWEI-LED Universal Robina Corp. (URC) has acquired sugar milling machinery and equipment as it plans to expand its sugar mill’s capacity, it said on Tuesday.

In a press release, the company said the assets were acquired from the idle equipment of Central Azucarera Don Pedro, Inc. (CADP), a subsidiary of listed Roxas Holdings, Inc., which shut down its operations earlier this year.

“These assets will be used to expand the capacity and improve the sugar recovery process at URC’s sugar mill in Balayan, Batangas,” the company said.

The new equipment will increase the company’s milling capacity at its Batangas mill to 8,000 tons of sugar a day from the 5,000 tons previously produced.

The company said that by raising the mill’s capacity, it could ensure an ample supply of sugar to its consumers. It added that the recent acquisition has cut the time of the URC’s Balayan mill to two years instead of four.

Meanwhile, the company said that due to long wait times in its truck yard, “farmers are currently suffering from low sugar recovery on their sugarcane deliveries.” The low recovery could negatively affect their profits and drive some to cease farming or shift to low-value produce.

“The situation, if not immediately addressed, poses a grave threat to the livelihood of the farmers, as well as the entire sugarcane industry in Batangas, and will aggravate the current sugar shortage in the country,” the company said.

This comes after a statement by URC Sugar and Renewables General Manager Rene Cabati that the company will mill the sugar canes from the displaced farmers in the CADP shutdown.

“URC’s Balayan mill is also extending its milling season — which normally ends in April — till June,” it said.

During the first quarter, URC reported flat earnings at P3.4 billion driven by higher financing costs and noncash impairment on its farming business. Its top line rose by 11% to P39.81 billion as “all businesses delivered strong growth despite the continued elevated inflation rates across the region.” 

On Tuesday, URC shares closed lower by 3.31% or P4.90 to P143.10 apiece. — Adrian H. Halili