Roxas Holdings sees market for processed sugar in India, ME

MANILA, Philippines - Listed sugar miller Roxas Holdings Inc. (RHI) believes Philippine sugar may have a competitive edge in India and Middle East when processed into coffee mixes or powdered juice rather than raw sugar.

Speaking at the 4th Kingsman Asia Pacific Sugar Conference in Singapore last week, Archimedes Amarra, the sugar group’s Executive Vice President for Marketing/Trading, Corporate Planning and Corporate Communications, said demand for these manufactured goods present a bright spot for Philippine sugar in the export market amid challenges in the industry.

“The government and local traders are actively exploring new markets, such as India and the Middle East, especially with significant industry changes expected in the next two years,” Amarra told producers, traders and sugar executives from the Asia Pacific.

He said the Philippine sugar industry needs to strengthen value-adding of sugar exports to become competitive with neighboring ASEAN states once the regional free trade agreement becomes effective in 2015.

Sugar tariffs under the ASEAN Free Trade Area (AFTA) will drop from 38 percent in 2010 to five percent in 2015, paving the way for increased competition among sugar producers in the region. The Philippines is particularly threatened by the possible influx of cheap sugar from Thailand which producers enjoy lower production cost.

Amarra, however, recognizes the efforts exerted by the Department of Agriculture to strengthen the Philippine sugar industry through the Sugar Industry roadmap.

“The roadmap promotes block farming or the operational consolidation of small farms to take advantage of plantation-scale production; increase in ethanol production backed up by the law that mandates the use of biofuels in the country; sale of excess power from sugar mill power generation; and the production of other sugarcane by-products and co-products,” Amarra said.

RHI executives earlier said the company is preparing for the regional integration by upgrading its existing plants within the next three years.

The company intends to raise $30 to $40 million to finance a three-year program for the upgrade of its existing sugar mills located in Nasugbu, Batangas and La Carlota, Negros Occidental.

The company intends to raise the funds needed through the offering of new stocks, which would comprise 20 percent of company ownership. It is yet to be determined if the stock rights offering would be carried out within the year.