ROXAS Holdings Inc (RHI) said that it will continue to pursue further options to expand its operations in Batangas and Negros after the Philippine Competition Commission (PCC) rejected the proposed sale of its Nasugbu sugar mill to Universal Robina Corp, (URC).
“The RHI Group will continue to operate CAPDI (Central Azucarera Don Pedro, Inc) PCC as it explores other options to further enhance its operations in Batangas and Negros,” RHI said in a statement late Thursday.
“The group is saddened by the unfavorable decision from the Commission because of the lost opportunity to advance the sugar industry in the Southern Luzon area. Both URC and CAPDI are currently extremely under-utilized because of the scarcity of sugar cane supply in the area, which to date, is in a continuously precipitous decline,” RHI said.
The PCC, in a decision published on Thursday, said that its decision not to authorize the sale prevents the creation of a monopoly which could be of harm to sugarcane farmers.
“A merger-to-monopoly deal is among the most detrimental types of business transactions. The URC takeover removes its only competitor, erodes the benefits of competition for the sugarcane planters and leaves market power at the hands of a single provider in an area,” PCC Chairman Arsenio M. Balisacan said in a statement.
URC said that it initiated the proposed transaction, expecting to create efficiencies. However it noted that the PCC decision “does not materially affect its business plans.”
RHI meanwhile said: “We strongly believe consolidation of mills will bring about efficiencies for the benefit of all stakeholders.”
RHI reported a consolidated net loss of P197 million in the fourth quarter of 2018, up 79.1% from a year earlier, due to weak sugar prices.
On Friday, RHI closed at P3.02, up 0.67%. — Reicelene Joy N. Ignacio