Alternative Courses of Action

Molasses Scarcity: A Case Study
On Victoria’s Milling Company’s
Shortage of Molasses
For Bioethanol Fuel Making
Prepared by:
Batigulao, Joanna R.
Cervantes, Chesca D.
Dela Cruz, Lorie Anne S.
Flotildes, Lorie Anne M.
Jaum, John Paul N.
Pagulayan, Elmer Angelo
Sta. Maria, Carlos Emmanuel C.
Traquiña, Rocel A.
Villarama, Mark Andrew
From BSBA 4OM-1

Table of Contents
I. Executive Summary
II. Viewpoint
III. Time Context
IV. Statement of the Problem
V. Statement of the Objectives
VI. Areas of Consideration
VII. Assumptions
VIII. Alternative Courses of Action
IX. Analysis
X. Conclusion
XI. Plan of Action

Executive Summary
Victoria’s Milling Company Inc. (VMC) has been one of the Philippines’ top-
producing sugar milling companies since 1919 and was founded by Don Miguel J.
Osorio. This integrated raw and refined sugar company is in Barangay XVI, Victoria’s
City, Negros Occidental. VMC has since diversified and formed Victoria’s Foods
Corporation, Cane town Development Corporation, Victoria’s Golf & Country Club,
Inc., Victoria’s Agricultural Land Corporation, and Victoria’s Green Energy
Corporation (VGEC).
Through its diverse business portfolio, Victoria’s Milling Company continues
to contribute to the economy as it ‘Nourishes, Powers, and Fuels’ the lives of the
Filipino people. The company’s mission is to transform sugar cane into sugar that
nourishes the body and into power that energizes industries and homes. Moreover,
with its vision of becoming a leader in the sugarcane industry, producing sugar,
power, and energy, identifies the top three (3) business of the company namely
Sugar Milling, Distillery, and Power Co-Generation.
The Victoria’s Milling Company, Inc. (VMC) Sugar Milling segment is one of
the nation’s biggest raw and refined sugar producers. It currently holds the most
significant share of refined sugar production in the province of Negros, and in the rest
of the country as well. VMC’s distillery business segment’s main activity is
manufacturing ethyl alcohol and other related byproducts has its plant rehabilitated
and put back in operation in 2011. The product is potable alcohol and can be used in
the manufacture of rum and other alcohol spirits. 3 Victoria’s Milling Company –
Strategic Management Paper, 2021
The Power Co-Generation business segment, along with the company’s
development into one of the most significant integrated raw and refined sugar
operations in the world, accounting for an average of 30% of the country’s daily need
for refined sugar, Victoria’s Milling Company has also evolved to produce power
being utilized for its primary operations and serving small communities within the
vicinity of the leading manufacturing plant in Victoria’s.
VMC is committed to ensuring its position in leading the sugar industry, and it
aims to develop arising niches in the Distillery and Power segment. Combined with
the company’s passion and is leadership structure, the firm is geared to better and
more productive years to come and prove the industry its ultimate purpose --- from
nourishing, powering, and fueling the lives of the Filipino people, to evolving into a
globalized firm addressing the world’s need for bioethanol fuel and other sugar
production-related products.
Viewpoint
This paper is written from the point of view of a consultant with the contents
aimed at recommending a solution to the problem experienced by the management
of Victoria’s Milling Company (VMC).
Time Context
This paper is written in the present time of December 2022 with the data used
being gathered during the same time period.
Statement of the Problem
The problem to be tackled in this case study will revolve around the shortage
of molasses supply that is used by VMC for the creation of their bioethanol products
such as fuel and rubbing alcohol.
Statement of the Objectives

This paper aims to identify the current level of supply of molasses of VMC. In
line with this, this paper also aims to identify the current sources of VMC for their
molasses demand. This paper also aims to identify the target and projected demand
of VMC for their current operation. And lastly, this paper aims to identify the
alternative sources for this demand by looking at other companies from the same
industry and the global supply situation of this material.
Areas of Consideration
Assumptions
This paper assumes that the supply of molasses in VMC comes only from its
production of sugar from a sugar cane. This means that the supply of molasses for
bioethanol production plant of VMC is directly affected by its own level of production
of sugar and its supply of sugar cane from its farm and suppliers.
In line with this assumption, this paper also assumes that the problems in the
supply chain as referenced below have not yet been resolved causing a shortage in
the input supply of sugar canes and thus affecting its production of sugar and,
ultimately, molasses for use in bioethanol production.
According to a news article from panaynews.net in July of 2021, VMC has cut
ties with Victorias Milling Company (VICMICO) Planter’s Association. VICMICO, as of
news article writing, holds 1,500 member planters and is considered as the biggest
planters’ association in Northern Negros. This decision has been seen to cost VMC a
huge reduction in millable canes in the range of hundreds of thousands of tons.
Adding further to the sugar supply problem, an article written for Bloomberg in
June of 2022 states that the Philippines, as a whole, has missed or failed in
achieving its sugar production target due to experiencing severe weather conditions
and higher cost of fertilization affecting and decreasing the yield. Moreover, this
supply crunch has been made worse by the delays experienced in the importation of
sugar importers.
Lastly, according to a news article written for Inquirer.net, the industry of
bioethanol production has appealed for importation of molasses to be used in the
production of ethanol. This appeal, however, has been opposed and declared as a
false claim of supply shortage. On the other hand, this has been proposed by the
Ethanol Producers Association of the Philippines (EPAP) to increase its utilization of
its plants from 300 days a year of operation to 345 days per year.
Alternative Courses of Action
According to the problem statement, the VMC's lack of molasses as they
participate in the production of bioethanol from sugar was the issue that needed to be
resolved. The most typical alternative solution in this molasses shortage situation is
to reopen certain sugar mills before the normal milling season. Even if it may not be
the ultimate solution, this could work for the company's long-term needs. One of the
biggest distributors of sugarcane in the Philippines, Mr. Ferrer, vice governor of
Negros province, said in a statement, "By (early reopening), they aim to alleviate
supply concerns; as a result, they will also be experiencing growth in their local
economy." This solution would not be as easy as we foresee because doing so
would make the company spend a lot more on fertilizers and other expenses, such
as salaries for the workers.
There is another option, although it is a temporary one. Importing from other

countries is only recommended when the company or other local suppliers are no
longer able to meet demand. For short-term solutions, it is necessary to permit the
importation of enough sugar to make up for local production deficiencies brought on
by the company's involvement in the production of bioethanol. To avoid misuse and
ensure that major industrial users and retail customers can have the sweetener when
they need it at fair pricing, the importation procedure should be streamlined and sped
up. Importation could seem depressing to our local suppliers, so the government
enacted a law regarding sugar importation to put the local suppliers at ease. The law
that was mentioned relates to the restriction on importing sugar from other countries.
The goal of this regulation is to ensure that customers and retailers are not
dependent on imported commodities, in addition to making life easier for local
providers such as the VMC.
In addition to reopening and importing, the corporation may be able to locate

an alternative plant that can make sugar instead of using sugarcane. The company
may at least do some research and discover the aforementioned option to help them
generate as much as possible. The issue with this kind of approach is that it would
not only take up a lot of their time but also cost them money. Whatever the approach,
a company would need to spend a lot of money to solve this particular problem. It is
up to the business to decide which a better solution is, and that will be taken into
consideration. They ought to make decisions that are not just convenient for them but
also for their consumers.
Analysis
Conclusion
Plan of Action
References
https://www.panaynews.net/vmc-at-war-with-negros-planters/
https://www.bloomberg.com/news/articles/2022-06-22/sugar-shortage-hits-the-
philippines-as-food-inflation-woes-mount?leadSource=uverify%20wall
https://business.inquirer.net/329345/sugar-producers-hit-appeal-to-import-molasses
Accomplishment Report

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Molasses Scarcity: A Case Study

On Victoria’s Milling Company’s

For Bioethanol Fuel Making

Dela Cruz, Lorie Anne S.

Flotildes, Lorie Anne M.

Jaum, John Paul N.

Pagulayan, Elmer Angelo

Sta. Maria, Carlos Emmanuel C.

Villarama, Mark Andrew

From BSBA 4OM-1

III. Time Context

IV. Statement of the Problem

V. Statement of the Objectives

VI. Areas of Consideration

VIII. Alternative Courses of Action

XI. Plan of Action

Statement of the Objectives

There is another option, although it is a temporary one. Importing from other

In addition to reopening and importing, the corporation may be able to locate

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