Bank now owns Dacongcogon sugar mill-A A +A
Friday, March 12, 2010
THE Philippine National Bank (PNB) has just bought the Dacongcogon Producers Cooperative Marketing Association, Inc. (DPCMA) in Kabankalan City.
The PNB foreclosed it with an outstanding loan of P51.43 million as of September 2009.
The auction of the 40-year-old sugar mill, which started as Dacongcogon Sugar and Rice Milling Company in August 1969, came on the heels of four-year financial and operational woes that eventually led to its foreclosure last month.
The DPCMA, located in far-flung Barangay Tabugon, had about 9,000 planter-members, including 7,000 associates.
The auction took place and that PNB was the sole and winning bidder.
The auction was held at the Office of the Clerk of Court of Regional Trial Court Branch 61 in Kabankalan.
A Sun.Star Bacolod source said the sale involved five parcels of land totaling 564,429 square meters or 56.44 hectares as well as buildings, furniture, fixtures, machines and equipment covered by 34 tax declarations, including, among others, staff houses, mill houses, a church, and hospital.
Also included were a number of buildings, offices, and mill station erected on the mortgaged properties along with machinery and equipment, and transport and heavy equipment, the source added.
In August 1996, PNB and DPCMA signed a memorandum of agreement, stating that the bank shall appoint another company to operate the mill if the latter fails to operate the mill profitably and results to a default of its loan.
The sugar mill is a legacy of the late Bacolod Bishop Antonio Fortich who established it with businessman-planter Benjamin Gaston after organizing the DPCMA then composed of more than 1,200 small planters in February 1968.
Former DPCMA chairman Rolando Parpa, whose group had been appealing to President Gloria Macapagal-Arroyo for the Philippine Sugar Corp. to takeover the mill with the PNB, had blamed the buyout of Legacy Group owner Celso de los Angeles Jr. in 2006 for the deterioration of the sugar central.
The DPCMA directors led by Wilfredo Miraflores then relinquished 70 percent of the mill’s assets to De los Angeles for the payment of its PNB debts.
In July last year, Parpa said De los Angeles failed to rehabilitate and improve the efficiency and increase the capacity of the mill.
He added that following the De los Angeles takeover, the mill stopped operating in crop year 2006-2007. In 2007-2008, its sugar production was merely 200,000 Kilograms (kgs), way below its annual output of 314,000 kgs. in the past three years while in 2008-2009, production dropped to only 50,000 Lkgs.
In July last year, mill workers had also complained of non-payment of their salaries and benefits amounting to P1.5 million.