Manila, Oct. 3 - Universal Robina Corp., a Philippine snack food and beverage company, Wednesday said it has acquired two sugar mills from PASSI (Iloilo) Sugar Central Inc.
It didn't disclose the financial details of the deal on PASSI's request, but said it paid for the acquisition using its cash reserves.
"This purchase, together with the expansion of our Sonedco mills and refinery, will catapult URC to become the Philippines' second-largest sugar miller and refiner," Universal Robina President and Chief Executive Lance Gokongwei said in a statement.
PASSI is the largest raw sugar producer in the central Philippine province of Panay. Its two sugar mills have a daily capacity of 8,000 metric tons.
Prior to the deal, Universal Robina owned and operated sugar mills and refineries in Carsumco in the main island of Luzon, and at Sonedco and Ursumco in central Philippines.
They have a combined milling capacity of 17,000 tons of sugar cane a day and can refine 17,000 50kg bags of sugar daily.
Sonedco is expected this month to raise its milling capacity by 4,000 tons of sugar cane a day. Its new refinery will boost refining capacity to 15,000 50kg bags a day.
In the fiscal year ended September 2006, Universal Robina produced around 166,000 metric tons of raw sugar and 1.7 million 50kg bags of refined sugar.
Bach Johann Sebastian, senior vice-president for corporate planning at Universal Robina, said that as much as 85% of the current output of the sugar mills is used to feed the requirements of Universal Robina's beverage, candy and chocolate manufacturing businesses.
He pointed out the strong demand for the company's iced tea brand C2 as well as for its candy and chocolate products.
He said the PASSI acquisition is a strategic move since Panay Island is a rich source of sugar cane.
He added that Universal Robina - excluding the PASSI purchase - has already spent around PHP2 billion to expand its sugar production operations.
Aside from the Philippines, Universal Robina operates and sells its products in China, Indonesia, Malaysia, Thailand and Vietnam.