By James A. Loyola
SL Agritech Corporation (SL Agritech), a leading producer of hybrid rice seeds and premium rice in the Philippines, is raising P2 billion from the issuance of commercial papers.
Philippine Rating Services Corporation said the proceeds for the commercial paper float will be used by SL Agritech to support its working capital requirements.
The firm was assigned an issuer rating of PRS Aa (corp.), with a Stable Outlook, by PhilRatings. A company rated PRS Aa (corp.) has a strong capacity to meet its financial commitments relative to that of other Philippine corporates.
Furthermore,a Stable Outlook means the rating is likely to be maintained or to remain unchanged in the next 12 months.
In arriving at the rating, PhilRatings took into account the firm’s competitive market position locally, supported by proprietary technology and vertically integrated operations.
IT also noted SL Agritech’s potential growth given its international business expansion and opportunities for growth for the local Hybrid Rice Industry given the current rice supply situation.
PhilRatings also took into consideration the company’s declining margins and coverage ratios and uncertainties arising from the government’s response to rising rice prices.
SL Agritech is involved in the production of hybrid rice seeds and premium rice. It has established itself as one of the leading rice companies in the Philippines and exports high quality rice seeds and premium packaged rice.
The firm’s fully integrated operations from hybrid rice seed research and development, to the sale of premium rice products allow the company to maximize its resources.
Although business generation remained largely domestically driven, SL Agritech continues to expand its network of customers abroad. Its hybrid seeds are exported to Vietnam, Myanmar, Indonesia and India.
Its rice products, on the other hand, are sent to Saudi Arabia, Bahrain, Jordan, Kuwait, Singapore, Australia, United Arab Emirates (UAE) and United States of America (USA).
In addition, the company has taken steps to expand the production of its hybrid rice seeds in neighboring countries such as Bangladesh, Myanmar, India and Indonesia, and which are reportedly four of the world’s largest rice producers.