SL Agritech on course to meet 2017 profit goal

HYBRID RICE producer SL Agritech Corp. is on track to hit its profit target this year after it brought the prices of seed varieties back to their more lucrative 2016 level at a time when the seeds production area might double in size from a year ago.

SL Agritech Chairman Henry Lim Bon Liong said the firm’s top-line growth was doing well for the current financial year ending in May 2018.

“Okay naman. Parang double-digit growth naman kami (We’re okay. It’s almost like double-digit growth for us),” he said last week in a press briefing when asked about the company’s revenues.

As for net profit, Mr. Lim said “we are targeting P700 [million] plus,” which was supposed to be achieved for fiscal year 2016-2017 had it not been for the firm’s decision to abide by the request of Department of Agriculture (DA) Secretary Emmanuel F. Piñol to cut prices.

SL Agritech slashed the price of its high-yielding rice seed varieties to as low as P4,500 per 50 kilogram bag from P5,100.

“I promised the secretary of agriculture na ibaba ’yong presyo ng seeds ng bigas (to reduce the price of rice seeds).

Siyempre bago siya naging (Of course, before he became) secretary, we would like him to succeed also. So we go into P4,500,” said Mr. Lim. He said the move dragged the expected P750-million profit last year to only P500 million, although still higher than the P400 million in 2015.

“This year we are bringing it back to P5,100. We really have to hit that [target],” Mr. Lim said

The DA’s request is expected to make hybrid rice seeds more available to farmers. The technology is seen to boost the country’s chances of achieving selfsufficiency in the staple grain by 2020.

Hybrid seed users have been recognized for ambitious rice-yield levels, which can reach more than 16 metric tons (MT) per hectare.

The DA’s 2020 rice self-sufficiency goal, according to Mr. Piñol, will require breaching the current yield of four metric tons per hectare to at least six metric tons across the four-million-hectare area in the Philippines that is planted to rice.

As such, the DA is targeting to stretch the current hybrid rice area of around 500,000 hectares with an additional 1 million hectare area in three years.

Cathy B. Galura, SL Agritech senior vice-president, said another profit driver is coming from the expansion of the firm’s hybrid rice seed areas to 600,000 hectares from the prior crop year’s 350,000 hectares.

“We are entering the dry season. This is the peak,” she said, adding that 500,000 hectares is expected during the drying season.

SL Agritech holds 80% of the total market share of hybrid variety in the Philippines. The firm is known for its Doña Maria brand of premium rice offered in Miponica and Jasponica varieties.

It has various partnerships for hybrid rice seed production in Asian nations, namely: Vietnam, Bangladesh, Indonesia and Cambodia.