VMC Sugar Refinery Shutdown Threatens Industry, Workers

There is a reported move by the Victorias Milling Company, Asia’s largest sugar refinery, to stop refining sugar. The move has stirred fears of a new crisis hitting the sugar industry as well as mass-layoff of sugar workers.

By Karl G. Ombion
Bulatlat.com

Photo by Archie Rey Alipalo/Visayas Daily Courier

BACOLOD CITY -- The Victorias Milling Company, Asia’s largest sugar refinery which also provides much of the muscle of the Negros sugar-based monocrop economy, plans to stop refining sugarcane, reliable sources told Bulatlat.com.

If true, the company’s decision is seen to have serious repercussions not only on its 4,000 workers but also on the sugar industry – the Negros economy’s lifeblood - the sources said.

The sources, who included sugar planters and traders, said last week that the VMC management through a resolution presented by East-West Bank representative, Andrew Gotianum, proposed that the firm should no longer mill refined sugar as the end of the harvest season looms.

For many years throughout the milling season and the dead season (tiempo muerto) when no sugar supply is available, VMC which is based in Victorias City, Negros Occidental had been engaged in sugar refining using raw sugar coming from all over the province.

With refined sugar in short supply once VMC stops milling it, the price of this commodity could be affected. Worse, sugar planters would not have enough cash to pay their workers particularly when the dead season sets in.

The VMC sugar refinery is considered the backbone of the company. Its operation involves major departments including mills and boilers, mills gantry, laboratory, research, electrical, SWSD and cane supply. It also accounts as having the most organized and outspoken of the company’s skilled workers.

The refinery has also been the source of VMC surplus for sustaining its other subsidiary businesses, special subsidies for projects of the local and provincial governments, and private humanitarian foundations.

Dirty trick

Unrest has started to set in. Both VMC workers and various planters associations view the plan to close down the refinery as a dirty move by the Gotianums to boost their sugar refinery in Mindanao and sugar trading (export-import) businesses.

Gotianum is among the Chinese Taipans who have been investing stocks and buying properties in Negros. Others include Gokongwei, Aboitiz, and Lucio Tan, the fierce rival of the Cojuangcos in food and beverage business. Lucio Tan has already established in Negros his Distilleria de Bago and a huge water extraction and bottled-water processing plant in Barangay (village) Mailum, Bago City, the Asia Alcohol in Pulupandan town, and La Tondeña Inc. in Bacolod.

Gotianum, whose plan was reportedly backed by most of the board of directors, is said to have claimed that there is little profit that can be had from sugar refining.

If the plan materializes, Gotianum would become powerful: His group would then dictate the VMC milling and trading prices of sugar, and use profits from same to expand to other businesses, the sources said.

Many hacienderos – big and small alike - feared that they could be marginalized if Gotianum and his group succeeded with their plan.  Some of them charged that the plan is just a tactic to bleed the VMC, in order to boost Gotianum’s sugar refinery in Mindanao.

Planters interviewed by Bulatlat.com said that they will oppose the move. They will show the same unity and fierceness that they had mustered against the Gokongwei group who earlier planned to take over the company.

Contractualization

Guillermo Barreta of the national democratic trade union center, National Federation Sugar Workers–Kilusang Mayo Uno (NFSW-KMU), told Bulatlat.com that their group believe VMC will completely shut down its refinery.  Anybody who knows the anatomy of VMC would not make moves that would result in crippling the refinery, he said.

The move, Baretta added, will lead to mass-layoffs and the rehiring of fewer skilled workers. Part of the spin-off will be the importation of sugar where Gotianum has established a name. Department of Agriculture (DA) officials have also encouraged sugar importation which is cheaper than production.

NFSW-KMU had earlier denounced the big sugar millers and traders for taking advantage of the policies and agreements of World Trade Organization-GATT on sugar industry at the expense of the sugar workers and other labor forces dependent on the sugar industry.

The labor center noted that contrary to claims by the big miller-traders about serious losses, they are in fact reaping superprofits by engaging in spin-offs, merging, redundancy programs, coupled with intensified repression of workers rights and sabotage of workers unions.

Barreta said that Victorias is a classic case of big miller-traders benefitting from globalization policies of labor contractualization and free trade at the expense of thousands of poorly-paid workers. Some of VMC’s active and terminated workers have confirmed to Bulatlat.com research team that today only a thousand of more than 4,060  workers are regulars and this became so after the sugar milling giant resorted to its redundancy scheme and subcontracting program beginning late in the 1980s.

The more than 3,000 contractuals are now spread in almost all of the 20 departments of VMC and its subsidiary companies like the Victorias Food Processing Corp. and Victorias Quality Packaging Corp.

Barreta told Bulatlat.com that VMC has been using the flimsy defense of irreversible financial loss since 1996 in order to carry out massive contractualization and various labor flexibility schemes, and preserve its superprofits. 

New political realignments in Negros

Apart from the impact on labor conditions and the local economy, the recent VMC move has led some local economists and political analysts into projecting the potential realignments in Negros.

One of them, Edgar Cadagat, a veteran journalist and political analyst, who said that the main and dominant group is still the Cojuangcos who are now consolidating their political control of central and southern Negros on the basis of their past political gains and investments. He however opined that the Chinese Taipans led by Tan, Gokongweis, Gotianum and Aboitiz, cannot be ruled out from wresting from or sharing power with the Cojuangcos as shown by their business expansion in Negros and political networking. Bulatlat.com

Back to top

We want to know what you think of this article.