By Krista Angela M. Montealegre
Roxas Holdings Inc. plans to temporarily shift from making fuel ethanol to producing potable and industrial alcohol amid increasing competition from cheap imported bioethanol. Ramon Picornell Jr., Roxas Holdings president and chief operating officer, told reporters that its bioethanol plant in Negros Occidental would shift to producing potable and commercial alcohol products.
“Our plant in [Roxol Bionenergy Corp.] can cater to ethanol or potable [alcohol]. Our plan now is to cater to the potable because of the lack in tariff to protect us from imported ethanol,” Picornell said on the sidelines of the Roxas and Company Inc. annual stockholders’ meeting.
The sugar producer said it has shifted the operations of its plant to produce potable and commercial alcohol during the weekend. The facility started commissioning operations in January.
“Our marketing group is talking with companies that will need potable or industrial [ethanol products],” Picornell said.
The company plans to go back to full production of fuel ethanol once the government finalizes the price mechanism for ethanol products.
Local producers have been asking the Tariff Commission to increase the duties on imported ethanol to 20 percent, citing their inability to compete with products from Brazil and Thailand.
San Carlos Bioenergy Inc., the country’s biggest producer of ethanol, has shut down its plant amid losses arising from competition with cheaper imports.
Its unit Roxol has invested P1 billion in the bioethanol facility, which is expected to produce 100,000 liters a day.
Roxas Holidngs also plans to raise P2 billion to P2.5 billion in the first half next year from private placements to beef up its balance sheet and to finance two to three expansion projects.
The company has started due diligence with local and foreign groups, Pedro Roxas, Roxas Holdings chairman, said.
The firm has tapped Mabuhay Capital Corp. to facilitate the much delayed search for strategic investors.
Mabuhay replaced Macquarie, which was hired two years ago to formulate a strategy to allow the entry of a partner into Roxas Holdings’ bioethanol and sugar business.
The company is looking at a regular capital expenditure of P200 million next year for the maintenance of its sugar facilities.
Roxas Holdings shares fell from P3.30 on Monday to P2.70 each on Wednesday.
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