CITY OF SAN FERNANDO - An overhaul is ongoing in a sugar mill that President Aquino's family ceded to a new owner recently, leading to mass layoffs of workers and a temporary closure of the mill.
A new firm, owned mainly by the family of Cito Lorenzo, former agriculture secretary of the now detained President Gloria Macapagal-Arroyo, has taken over operations of Central Azucarera de Tarlac (CAT).
Its first order of business was to lay off workers in the mill, offering them up to P400 million in separation packages.
The Lorenzos assumed ownership of CAT through the joint venture CAT Resource Asset and Holdings Inc. (Crahi), composed of two companies-First Lucky Holdings Corp. and North Star Estate Holdings.
Crahi has offered up to P400 million in separation pay and benefits to 681 employees who are being retrenched, according to information released by the company to the Inquirer.
CAT has been closed to prepare the facility for the June to October off-milling season.
With the change in ownership, Martin Ignacio Lorenzo, of First Lucky Holdings Corp. assumed the position of chair and chief executive officer of CAT, while Fernando Cojuangco, of North Star Estate Holdings, is president and chief operating officer.
Crahi bought the majority shares owned by relatives of Mr. Aquino in CAT in 2014.
It has temporarily closed the sugar mill, including its refinery and distillery, as new employees are being hired and facilities are due for upgrade from June to October, reports gathered by the Inquirer showed.
CAT said it has no affiliation with Lorenzo's First Lucky Holdings Corp. But it said North Star Estate Holdings Inc. was organised as a holding company of Cojuangco.
"There is no affiliation between the North Star Estate Holdings Inc. and CAT, except that it is substantially owned and controlled by [Cojuangco], a member of the private shareholders, director, vice president and chief operating officer of CAT," it added.
Fernando is a son of the late Pedro Cojuangco, the eldest son of Jose Cojuangco Sr., who bought the more than 6,000-hectare Hacienda Luisita and sugar mill from a Spanish company in 1957. Pedro is the eldest brother of the late President Corazon Aquino, mother of President Aquino.
At least 28 per cent of CAT used to be owned by Jose Cojuangco & Sons Inc., 17 per cent by Luisita Trust Fund, 6 per cent by Tarlac Distillery Corp., 5 per cent by Luisita Marketing Corp. and 1 per cent each by 14 members of the Cojuangco family, including Mr. Aquino's four sisters, a 2014 report of CAT to the SEC showed.
Crahi's early retirement package for CAT employees consisted of P100,000 or 1.5 months for every year of service, whichever is higher; conversion into cash of unused sick leaves and unused vacation leaves (for supervisors and managers); additional 30-day salary; a midyear service bonus; a prorated 13th month pay and prorated Christmas bonus.
The CAT labour union has not made a statement.
Sugarcane grown in Hacienda Luisita are sold to CAT as planters rent vast portions of the 4,000 ha ordered distributed by the Supreme Court to 6,200 farmworkers starting in 2012.
The Tarlac Development Corp. (Tadeco) had said all the company's 4,500 ha of agricultural areas had been transferred to Hacienda Luisita Inc. (HLI) in 1989 when agrarian reform was first implemented at the estate in the form of stock distribution programme.
Addison Castro, former CAT corporate secretary, told the Securities and Exchange Commission that CAT and HLI were "two separate and distinct corporations."
From 2013 to 2014, CAT produced more than 1 million 50-kilogram bags of refined sugar, 1.7 million gallons of molasses, 6.6 million liters of alcohol and 2,567 tons of carbon dioxide.