Monday, March 2, 2009
DA woos Thai, Sokor Investors
Agriculture Secretary Arthur Yap is wooing private investors from South Korea and Thailand to bankroll big-ticket projects in the Philippines to meet the global demand for biofuel along with the country’s high-value crops and marine species.
Yap, in separate meetings with visiting business delegations from the two countries last week stressed that the Philippine agriculture can be a highly profitable enterprise for foreign investors.
He said the subsector for high value commercial crops, which include banana, pineapple, mango and coconut, offers opportunities for investors to develop postharvest and processing facilities for such products, expand areas for production and build new infrastructure.
Yap had met with the South Korean businessmen at the Manila Hotel. He also met the Charoen Pokphand Group of Thailand headed by its chairman and CEO Dhanin Chearavanont in Samal Island during President Arroyo’s visit to that island.
For banana, Yap said investment opportunities include the expansion of production areas; processing banana into flour, cereals and vinegar; banana production and processing into Inulin; packaging equipment; logistics; research and development; and farm-to-market roads (FMRs).
“Banana is a particularly desirable commodity because the Philippines has already established itself as one of the top banana-producing and exporting countries in the world,” Yap said. “Moreover, world demand for bananas is quite high.”
Japan, for instance, imports almost 1.2 million metric tons (MT), while Russia, imports 863,000 MT, and China almost 409,000 MT, Yap noted.
The Philippines supplies around 12 percent of the world’s demand for bananas, with exports reaching $404 million in 2007. It ranked second to Ecuador (4 million MT) in terms of export volume at 2.3 million MT.
Among all the fruits grown in the country, it has the highest yield at 6.8 million MT, with production growing by 7.8 percent in 2006. Cavendish bananas account for 41.37 percent of the country’s banana production. The Philippines is also the world’s number one banana-chip exporter with 38,000 MT valued at $36-million sold to overseas markets in 2007.
Mango, which can be processed into a number of products such as juice, puree, dried fruit and concentrates, offers opportunities in developing irradiation facilities, extended hot water- treatment tanks, freeze-dry facilities, quick frozen-banana products and processing plants, Yap said.
Yap said that while Mexico has started producing mangoes, the Philippines ’ production of the fruit is the finest in the world and the third most important fruit crop based on export volume and value.
“It is so good that 93 percent of our produce are consumed locally. Investments in mangoes, therefore, are very lucrative, since the Philippines’ own domestic market supports the commodity,” Yap told potential investors from Thailand and Korea.
The Philippines ranks seventh among the world’s mango producing countries.
Investment opportunities in pineapple, meanwhile, include expansion of production areas, research and development toward effective pest management, processing facilities and packing houses as well as FMRs, Yap said,
The Philippines ranks third in pineapple production, next to Brazil and Thailand, accounting for 10 percent of the world’s supply. Fresh and processed exports of the fruit were valued at $56 million and $166 million, respectively.
Pineapples, mostly grown in Mindanao, can processed into juice, jellies and jams, dried fruit, pineapple vinegar and fruit cocktail. The expensive piña or pineapple fiber can be used to make the Barong Tagalog—the country’s national dress.
For coconut, a crop with seemingly endless uses, Yap said investment opportunities include expansion of production areas, research and development, the coconut industry information network and the integrated coconut processing and marketing complex, where the return on investment is calculated at a whopping 130 percent in just six months.
The Philippines is the world’s number one supplier of coconut oil (crude and refined), accounting for about 50 percent of the world trade. Earnings from coconut oil and desiccated coconut are valued, respectively, at $578.72 million and $138.82 million.
Among the products and byproducts of coconut are virgin-coconut oil, coco coir, coco sugar and coco-methyl ester—a biofuel.
Another lucrative sector, Yap said, is the biofuels industry, where demand for feedstock such as coconut, is projected to reach a minimum of 331,746 tons and for jatropha 696,667 tons.
The same increase in demand for bioethanol feedstock such as sugar cane, sweet sorghum, and cassava is also expected, Yap said. Demand for these feedstock are projected to soar to 10.3 million tons for sugar cane, 14.42 million tons for sweet sorghum, and 4 million tons for cassava by 2015.
Investors, Yap said, can cash in on this high demand for biofuel feedstock by developing areas for feedstock plantations and building and operating refineries and distilleries for bioethanol production.
The Biofuels Law, he noted, likewise offers investors a number of incentives such as tax holidays and exemptions if they invest in this sector.
Seaweed production is another profitable investment opportunity considering that export demand for this product is high as shown by the massive volume of seaweed and algae exported in 2006 at 19.33 million kilos.
The Philippines is one of the leading producers and exporters of seaweed with markets such as the United States, and the European Union, Yap said.
The establishment of mariculture parks also offers investors opportunities to produce high-value commercial fish species such as grouper, red snapper, tilapia and king crab, Yap said,
“Investment in mariculture parks is desirable because of the sizeable domestic market,” Yap said.
The country’s average per capita fish consumption from 2000 to 2006, for instance is 32 kilograms per capita, which translates into demand of about 2.8 million metric tons in the Philippines alone.
Investment opportunity for poultry business was likewise presented to the CP Group of Thailand as the Philippines is an Avian Influenza-free country.
The other investment opportunities Yap offered investors are the construction of hatcheries for high-value species (grouper, seabass, abalone), fish processing plants, postharvest facilities, feedmills; intensified production of brackish water fishponds; fabrication of sea cages and other equipment; and aqua tourism.
Yap told the potential investors that investments are also open in production technologies, like quality planting materials for rice and corn as well as investments in genetic materials for dairy, cattle, hog and fish breeding.
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