FDC spending up to P800M in Davao ethanol plant

MANILA, Philippines - Gotianun-led Filinvest Development Corp. (FDC) is spending between P700 million and P800 million for an ethanol plant that will use by-products of its sugar refineries. FDC Chairman Jonathan T. Gotianun said the plant, which FDC seeks to build within the year, would be located within the Davao Sugar Central Co., Inc. premises in Mindanao. "We’ve already undertaken studies for the ethanol plant. There are no definite plans yet, but we’re interested to pursue it," he said. Mr. Gotianun said FDC would like to prioritize the expansion program of Pacific Sugar Holdings Corp., which owns two sugar mills and manages sugar plantations. FDC bought Pacific Sugar, whose production accounts for 25% of Mindanao’s total sugar production, from ALG Holdings Corp. through a share-swap agreement in June 2007. Pacific Sugar owns milling companies Davao Sugar, Cotabato Sugar Central Co., Inc. and High Yield Sugar Farms Corp. "When completed, Pacific Sugar’s milling capacity will increase by 55% while its refining capacity will be triple the existing capacity [of 2.15 million 50-kilogram bags of sugar]," Mr. Gotianun said. The sugar manufacturing business contributed P596 million to FDC’s 2007 revenues and P51 million to its total net income. Last year, Philippine sugar production grew by 5% to 2.23 million metric tons amid rising sugar prices. FDC President and Chief Operating Officer Josephine G. Yap earlier said they would sell more shares and raise P35 billion to build the ethanol plant. But the capital-raising activity was foiled because of unfavorable market conditions. Ms. Yap said the plant, which will have an initial production capacity of 100,000 liters per day, would be operational by 2010, in time for the legal mandate for gasoline to contain a 5% mix of ethanol by 2009. FDC is the listed holding company of the Filinvest group. The group’s principal activities are carried out through its real estate, banking and financial services and sugar divisions. - BusinessWorld