Central Azucarera Don Pedro Inc. (CADPI), a wholly-owned sugar mill subsidiary of the First Pacific Co.-controlled Roxas Holdings Inc., announced that it has permanently closed its business operations effective on Feb. 28, 2024 due to serious business losses and the government’s sugar importation.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said that, as a consequence, it is “forced to terminate the employment of all of its employees on the ground of ‘closing or cessation of operations’ under Article 298 of the Labor Code.”
In compliance with Article 298 of the Labor Code, CADPI said it has given notice both to the Department of Labor and Employment (DOLE) and the affected employees at least 30 days before the effective date of termination.
The effectivity date of the termination of all affected employees is on March 29, 2024. The company did not mention how many workers will go jobless by the end of this month.
The closure of CADPI operations and termination of its employees effective March 29, 2024 was approved by the Board of Directors of Roxas Holdings on Feb. 28, 2024. The notice of separation of employees was sent to the employees on the same day.
As reported in prior years, the RHI Group has incurred a net loss of P797 million and P938.9 million during the years ended Sept. 30, 2022 and 2021, respectively, and the group has deficit amounting to P3.92 billion as of Sept. 30, 2022.
First Pacific led by its managing director and CEO Manuel V. Pangilinan acquired 34 percent stake in RHI in 2013 and became majority shareholder later on.
RHI said that "CADPI’s closure of its operations and separation of its employees will essentially mitigate incurrence of manpower costs and other fixed costs."
The company added that the closure "will prevent further dissipation of resources as opportunities to resume normal operation of the sugar refinery business of CADPI has been affected and/or limited by the increased importation of refined sugar by the national government in the past years."
Furthermore, based on discussions between CADPI and the Sugar Regulatory Authority (SRA), CADPI was informed that the current inventory of refined sugar in the market must first be depleted before CADPI can offer refined sugar to the public.
“The depletion of the current inventory is projected to take around eight to 12 months, which is a significantly long period of non-generation of income by CADPI from its sugar refinery operations,” the firm said.
As to other indirect productive activities of the group, minimal turnover is not expected to support the group’s recurring costs. Thus, it said maintaining CADPI’s sugar refinery business proves to be extremely difficult and no longer viable.
The group said it is coordinating the divestment of certain assets, including idle assets, principally to pay its obligations. These activities are currently ongoing but no definitive agreement has been made with prospective buyers of said assets.
Established in 1927, CADPI is located in Nasugbu, Batangas where it produced and sold raw and refined sugar, molasses, and related products to traders and industrial customers. Its customers include multinational food and beverage companies.