TANDUAY Distillers Inc. (TDI) will re-submit a bid proposal to acquire the assets of sugar-milling firm Central Azucarera Don Pedro Inc. (CADP).
“We are talking with Manuel V. Pangilinan. We are trying to rebid because they said the last bid we submitted was quite low. Last time when we submitted three to four weeks ago, it was P4 billion something. I’ve been trying to get CADP for the last two years because it is adjacent to my plant. We are just separated by a river,” said Gerry Tee, overall head of LTGC Distillery Operations and Absolut Distillers Inc. chief operating officer.
TDI is currently conducting due diligence, after which the revised bid will be submitted “probably next week.” There are two to three other interested bidders.
Tee said TDI would bid for the asset, including equipment and land, not the company.
“We want to acquire the land and assets, refinery and distillery, not the company. We are not interested in their name. Just asset buyout. The land is around 200 hectares,” Tee said.
In an earlier disclosure to the stock exchange, TDI said it has always been on the lookout for opportunities to support, enhance and expand its operations. CADP, located near a subsidiary of TDI in Balayan, Batangas, is a logical target of interest as it will be complementary to its operations.
“The primary motive is for us to get our raw materials secured. Molasses is needed to produce alcohol. It’s the first time, I think, that a distillery will buy into a sugar plantation. It will complete the whole picture of Tanduay, because we do not have a sugar mill,” he said.
If and when TDI will succeed, Tee said the company would rehabilitate and modernize the facility in order to benefit more farmers.
“When we get it, we will need to rehab it and increase its efficiency. Our thrust is to invest and put in more capital into CADP just in case we win. Initially, it’s around P150 million to P200 million, but if we expand further in phases, it would be billions. The equipment, we will do these in phases, maybe total of four phases,” he said.
“We want to really gamble on CADP because we know we can help it and improve it by pouring investments and capitals. Bong Tan wants to make sure the sugarcane farmers are well taken care of. If we modernize the facilities, it will yield better results and their income will rise,” Tee said.
Sugarcane areas in Batangas are dwindling because of low income for the farmers.
“If your facilities are old and outdated, your efficiency goes down and that means less sugar for the farmers to get from the canes,” Tee said.
Earlier, the company was looking at putting its own sugar mill, but Tee said this was set aside pending the outcome of the bid. Should the company fail to win, Tee said the company will pursue earlier plans of putting up its own mill.
“It is cheaper to get my own mill, but CADP has a refinery and has a bigger land. If I make my own mill, it will be smaller because my land is limited. The CADP mill is capable of processing 12,000 tons per day. With ADP, there will be bagasse. We will just improve their facilities for us to generate more electricity from bagasse,” he said.