Group: VMC takes 'desperate moves' as tonnage drops

THE Victorias Milling Company (VMC) appears willing to lose hundreds of millions of pesos by extending additional milling incentives to attract individual planters to deliver their sugarcane to them for crop year 2021-2022.

This was stressed, in a statement Sunday, November 21, by Vicmico Planters’ Association.

The group said that industry sources indicated that the VMC, fearing reduced volume after unilaterally severing ties early this year with them as long-time business partner and consequently with Vicmico Planters’ Multi-Purpose Cooperative, is giving milling incentive.

The amount is pegged at as much as P300, or a total package of P550 per ton cane, to attract farmers to deliver their sugarcane to the mill, it added.

Association president Aurelio Valderrama Jr. said VMC is desperate to secure substantial cane supply as it cannot assure itself of needed volume when it ended its decades-long partnership with the association after questions on transparency, mill efficiency and unreasonable penalties were raised by the planters' group.

Valderrama said the association was held hostage to the whims of some officers and directors further sowing confusion and division among its planters and farmers and in an attempt to shut down the association and ultimately the cooperative.

“Such moves are part of the under-handed tactics to make Vicmico Planters Association and Vicmico Planters Multi-Purpose Cooperative irrelevant just because they speak their minds out about the mill's practices,” he added.

The firm’s new "package" to planters, which took effect on November 8, 2021, includes milling incentives and other benefits per ton cane delivered direct to the mill from Victorias, Manapla and Cadiz areas.

“This is an incentive that is way above the usual trucking packages offered by other sugar mills,” Valderrama said.

Normally, he further said, the trucking package is determined based on the distance of the farm to the mill.

The VMC is currently giving a higher trucking package because last year it only offered P250 per ton, he added.

Valderrama disclosed that VMC keeps increasing its trucking packages after noting a decline in its current tonnage versus the year-ago level.

The mill was averaging 84,180.90 weekly gross tonnages during crop year 2020-21 and now down to only 71,260.4 tons per week with lower sugar recovered per ton of cane (lkg/tc) compared to other mills, the association said citing some sources.

As a result, VMC increased the total trucking allowance package from P250 per ton last year to P300 week-ending August 29, 2021 to September 19, 2021, it claimed.

It again to P400 week-ending September 26, 2021 to October 3, 2021; P450 for week-ending October 10, 2021; and currently at P550 just to assure itself of steady cane supply, it added.

The VMC, for its part, said that entering Calendar Year 2021 to 2022, part of the company’s strategy is to ensure capacity utilization of its sugar segment through a stronger and more relevant incentive scheme to attract more sugar planters to supply their sugarcane to the company.

The trucking allowance is only one aspect of this scheme that the management has undertaken after thorough scrutiny and understanding of the needs of the farmers during this time, where oil and fertilizer prices continue to rise, the firm said.

“Fertilizer costs have increased dramatically by three-folds compared to the last crop year. From around P800 per bag, it is as high as P2,500 per bag now,” it said, adding that “on top of that, you have the world oil price doubling as well from $40 to $80 per barrel.”

The management, in a statement, said another initiative that the company has engaged in for sustainability is the production of liquid fertilizer which it offers its nearby and willing partner-farmers for free.

The VMC remains committed to responding to the needs of its planters and the sugar industry, it added.