Success Factors and Constraints in Marketing Non-Traditional Coconut Products in a Competitive Global Market

SUCCESS FACTORS AND CONSTRAINTS IN MARKETING NON-TRADITIONAL COCONUT PRODUCTS IN A COMPETITIVE GLOBAL MARKET

By:

Norberto M. Boceta '

A. Introduction

How I wish I could tell you to hold on to your seat, relax, fasten your seat belt as I guide you on a historical tour of the Philippine coconut landscape. I wish I could do just that.

But since we are in a stationary setting, let me settle for a quick tour via a big Philippine map.

Our coconuts which our loyal buyers abroad refer to as the best coconut in the world, are planted to some 3.0 million hectares spread over 64, out of 78 provinces, and, 1,195, out of 1,541 towns or municipalities in our 7,107 islands.

These islands and islets are found in the country’s three big groups of islands we call LUZVIMINDA (Luzon, Visayas and Mindanao). In these three big groups of island are scattered (some are clustered) 93 coconut oil milling plants; 63 coconut oil refineries; 10 desiccated coconut factories; 6 coconut shell charcoal/activated carbon manufacturing plants; 16 oleochemical plants; 35 decorticating plants; and thousands of coconut product dealers or traders.

These business establishments are responsible for churning out 49 coconut products and by products for export (Table 1). These are classified into traditional and non-traditional products. The former is composed of 3 food and 3 non-food products. The latter consists of 22 food and 21 non-food products.

We define non-traditional coconut products as the food and non-food products (from the meat, shell, water and husk and other parts of the coconut tree) that we stalled to export as early as 1979. This means that any coconut product and by-product other than copra, coconut oil, copra meal, desiccated coconut, coconut shell charcoal and activated carbon is considered non-traditional.*

* A Paper presented by PCA Deputy Administrator - PMDB & APCC’s NLO to the 36th COCOTECH Meeting in Phuket, Thailand on June 22, 1999.

154 B. Philippine Exports of Non-Traditional Products

Over the last five years, Philippine exports of 49 coconut products and by products to some 63 countries averaged 1.94 M MT (copra terms) or some 9.7 Billion nuts. This earned for the country US $ 952 Million.

The non-traditional coconut meat-based products shared 125,000 MT (copra terms). These, together with other non-traditional products earned for the country US S 99 M in foreign exchange receipts.

As can be seen in Table 2, the shares of the non-traditional products in total exports in volume and value are 6.6% and 13.16%, respectively. Evidently, through the years, the structure of export is still dominated by coconut oil. Placing second, both volume and value, is the oleochemical group. While the non- traditional products have grown in number from a handful in the mid 70’s to 43 now, as a group, they still have a lot of catching up to do.

Table 2 depicts the country’s export of the six traditional products and 43 non-traditional products. The non-traditional products are presented in detail by commodity, both in volume and value. Space and time limitations, however, prevent me from presenting in detail the performance of the 43 non-traditional products. Instead, only the value of this group is presented. However, as I zero in on five non-traditional products (the meat of this paper), their detailed performance is presented.

C. The Global Market For Five Selected Products

1. Fresh Young Coconut

Since 1978, we have been exporting fresh young coconut, or “buko”, as it is otherwise known in the Philippines, under a quota system. Up to 1988, the quota system was managed by the Philippine Coconut Authority (PCA). The export quota was allocated by PCA among Filipino exporters most of whom, for obvious reasons, are of Chinese descent. The Filipino- Chinese were the ones who pioneered in export to Taiwan. Until almost 10 years ago they were the only ones licensed by PCA to export the product.

In 1989, the government of Taiwan decided to manage the quota system. Hence, from an export quota, the system became an import quota. The Taiwanese government bids out to Chinese importers the annual quota. Whoever wins in the bidding gets the authority to import “buko” from the Philippines.

155 Table 3 shows the volume and value of export o f“buko” to Taiwan. Table 3-A presents a list of Filipino “buko” exporters.

There are five good reasons for our success in maintaining the Taiwanese “buko” market:

First, “buko” water is considered a health drink by the Taiwanese. The sterile and good tasting coconut water is, to most Taiwanese consumers, more than an energy drink. To them, coconut water is an aphrodisiac.

Second, our export price is very competitive.

Third, there is an established and well-functioning marketing system in Taiwan that enables the importers to pass on the “buko” to a network of retailers via an equally well established network of wholesalers.

Fourth, the quality of our “buko” meets the discriminating taste of Taiwanese consumers. It seems our “buko” gives the Taiwanese the vigor and vitality that they need.

Fifth, the short distance between Manila and Kaoshiung enables our buko to reach its Taiwanese destination in just 36 hours in containerized refrigerated vans.

If the Taiwanese learn that “buko” water dissolves all kinds of kidney stone, then, perhaps, our export will shoot up. However, instead of further boosting our exports, we would rather maintain the current volume as there are close to one hundred processing plants needing raw materials. Besides, fresh young coconut is a low value export crop.

The major constraint in maintaining the regular export of “buko” from Manila to Taiwan is the seeming success of the Taiwanese people in planting 1,000 hectares to tall varieties imported from the Philippines. It now appears that seednuts and seedlings imported from the Philippines more than a decade ago are now bearing fruits. The young tender coconuts from approximately 100,000 - 144,000 trees provide competition to “buko” exports from the Philippines. Another threat to maintaining the current export volume is the attractive price in the fast growing domestic market. These twin factors which may encourage exporters to look inwardly are engendered by increasing population and health consciousness in the urban areas. The influence of the tri-media has made a growing number of Filipinos aware of the desirability of “buko” over cola drinks. With “buko”, Filipinos have the best of both worlds. A refreshing energy drink

156 long medically proven to dissolve all kinds of kidney stones, apart from the protein and fiber-rich meat which is filling to the stomach.

A decade ago, coconut production in Taiwan was concentrated in just one area. Now coconuts are harvested in Kaoshiung, Pentong and Quelong.

A few years ago, buko shipments from Manila were limited to the consumption of people in Kaoshiung. Today, a good number of people from Taipei have their own 40-footer trailer (with forklift) used to transport fresh young coconut from Pentong and Kaoshiung to Taipei.

The price of fresh young coconut in Taiwan is stable as our export is governed by a floor price policy.

While the threat of domestic Taiwanese production displacing import from the Philippines looms large in the horizon, south Korea is quickly emerging as another destination of fresh young coconut. If the price offered by the Koreans improves some more, we foresee a dramatic shift in export from Taiwan to Korea.

The list of Filipino exporters is shown in Table 3-A.

2. Nata De Coco

It is universally accepted that nata de coco is a white, gelatinous food product obtained from the action of the microorganism Acetobacter xylinum on coconut water (from mature coconut) or coconut milk containing sugar and acetic acid (Boceta & Milla, 1994:23)

From a simple ingredient in salads, desserts and other confectioneries, uses of nata have branched out into different dimensions. As food, nata is used in:

a. chocolate b. fruit juice and fruit drink c. ice cream, salads and halo-halo d. daily products like yogurt, milk shake and processed cheese e. bulking agent for low calorie food f. texture modifiers for frozen foods g. bakery products h. sausages and sausage casings i. candies

157 In the industrial realm, nata is used as:

a. bacterial media b. additive for high grade paper c. fiberglass filter sheet d. acoustic diaphragms for audio instrument e. filter membrane f. packaging cloth g. insulation and packaging material for electronic components h. stabilizers for cosmetic i. acoustic boards and microchip components

As can be seen from Table 4, the annual average export of this product amounts to US $ 7.8 Million. Volume-wise, the average annual export equates to only 1.1 Million nuts, or 244.44 MT of copra, representing roughly a mere 0.0162% of the country’s production of coconut. Even at its peak in 1994, the nuts equivalent of nata export came up to only 3,177,770 pieces, or some 706 MT of copra, representing 0.0307% of average annual copra production.

The phenomenal growth in export of this product made it a leading export winner in the nineties. The dramatic jump in volume shipped out to Japan in 1993 and 1994 (increasing by as much as 3,782.45% and 4,014.85% from 1992) was due to the popularity of the product among health-conscious Japanese. It was such a craze in Japan that nata de coco processors sprouted like mushrooms in Metro Manila and Southern Tagalog provinces. Housewives; teachers; policemen; employees in the government and the private sectors; and, every Tom, Dick and Harry driven by the enticing call to cash in on the highly profitable nata de coco business plunged into nata de coco making with their hard-earned savings. A number of people invested their fortunes but harvested misfortune! Some people made a lot of money during these two banner years. However, as market plunged, so did the fortunes of a good number of producers who miscalculated the strength and consistency of the Japanese market. When the nata bubble burst, these producers went from NATA to NAD A.

Japan continues to be the leading market, cornering 80.54% of the total exports. Value-wise, Japan contributes 82% of the Philippine export receipts. Other major markets are the USA, Korea, Taiwan, Hongkong,and Canada.

Over the last four years for which data are available (1995-98), processed nata constituted 82% of the country’s total export of the product.

158 This came in various forms: in bottles, which found their way to Japan, USA, Saudia Arabia, Canada and Australia and some European countries; gallon size cans for Japan. The balance of 18% or approximately 1,020 MT was in raw form.

As stated earlier the product’s success in 1993 and 1994 in Japan was largely due to a faddish demand among the young population. As a health food, the Japanese believe that nata de coco prevents colon cancer.

We believe that food usage of nata de coco in Japan has now reached a plateau. However, consumption continues to diversify although a good number of well-entrenched Filipino exporters would not divulge the emerging uses - for obvious reasons. The current use is to blend it with yogurt. This use has been endorsed by two TV personalities. This accounts, perhaps, for the stable demand for the product. The normal/regular demand for the product in Japan starting in 1995 enabled this sector of the industry to weed out the processors and exporters who were not ready for the long-term competitiveness of this product in a highly quality-conscious market. The present producers of nata de coco have organized themselves into a cohesive group of quality, price and cost- conscious entrepreneurs who can now bargain from a position of strength with processors-exporters for more remunerative prices. This is a welcome development to the processors-exporters who, in their desire “to remain competitive have decided to bite the bullet.” The experience in 1993 and 1994 and the newfound strength of nata de coco producers have convinced the processor-exporters to embrace the principles and practices of Total Quality Management (TQM). Hence, these exporters are now able to improve product quality while at the same time passing their cost savings to importers by way of reduced prices.

To further improve the global competitiveness of nata de coco, a Nata De Coco Congress is scheduled in Manila on July 15, 1999. Up for discussion in this gathering of producers, processors and exporters, researchers and scientists are, among others, the challenges, problems and opportunities facing the sector.

I understand a number of researches is on-going in Japan. These researches dwell on industrial use of nata de coco as input to electronic products. If these researches succeed in proving the effectiveness of nata de coco, then the future demand for this product will go up. But as to whether nata de coco production in the Philippines will really increase is still uncertain since its production remains a function of the relative price of the product in its industrial and food uses vis-a-vis prices of copra, coconut oil and husked nuts. It is not easy to divine what the future holds for nata de

159 coco. We would rather wait for the next chapter to unfold in the Japanese nata research episode and see how it impacts on nata production and export.

Table 4-A presents the list of exporters of raw and processed nata de coco.

3. Coconut Cream Powder/Milk

Unlike in Thailand, this sector of the Philippine coconut industry is a small, but gradually growing one.

From 506 MT in 1991, export of coconut milk powder increased to 1,455 MT in 1998. It averaged 952 MT with an annual growth rate of 19%.

Earnings also registered an upward trend, from US $ 1.6 million in 1991 to US S 4.5 million in 1998. The annual growth rate was a hefty 19%.

Coconut milk powder is exported to about 45 countries. Belgium is the leading market gobbling up 43% (US $ 1.3 million). Other markets are Japan (US S 623,000), Italy (US $418,620), Taiwan (US $ 184,540) and Australia (US $ 160,870).

Promising markets are Korea, Singapore, PROC, Hongkong, Brunei, United Kingdom, Indonesia, Netherlands, Canada and USA.

Liquid coconut milk registered a relatively fluctuating trend, with coconut milk exports reflecting a positive growth rate of 16% yearly. It grew from a measly 532 MT in 1991 to a high 1,163 MT in 1998. Average export was at 884 MT annually.

Export earnings averaged US $ 1.3 million yearly with a growth rate of 13% yearly. It peaked in 1993 at US $ 1,755,890 from a low of US $ 852,310 in 1991.

Liquid coconut milk is exported to about 50 countries. Top markets are Japan (US $ 387,000), with a share of 30%, and USA at 29.5% (US $384,610). Other markets are Hawaii (US $ 166,000), PROC (US $71,000), Hongkong (US $44,000), Australia (US $ 40,000), Canada (US $ 38,000) and Taiwan (US $ 37,000).

Potential markets are Germany, Italy, United Kingdom, Belgium, Israel, Guam, Brazil and Saudi Arabia.

160 The leading exporters of liquid coconut milk export the product in both tin cans (12 and 14 oz/can @ 24 cans/case) and plastic bags (6 kgs/pack @ 3 packs/case: 2.85 kgs/pack @ 6 packs/case. 25-kilogram bags in boxes).

The existing uses of the liquid coconut milk and coconut cream are as follows: raw material in the production of coconut syrup; ingredient in the preparation of dishes for home consumption and for hotels and restaurants; ingredient in the preparation of drinks and beverages; raw material in the manufacture of ready to consume sauces, curries and ice cream; ingredient in the manufacture of chocolates, biscuits (like Ferrero chocolate, Nabisco biscuits, Hershey’s chocolates, Bounty bars, etc).

There are 5 factors that account for the growing acceptance of Philippine coconut milk and cream in the world market. These are:

1. Aseptic production and processing using state of the art facilities that guarantee world class quality; 2. As organic or biological food, coconut milk, either in liquid or powder form, is preferred by health-conscious buyers; 3. Emerging preference for vegetable oil-based milk over dairy milk; 4. Emerging trend in Europe, China and North America where retail outlets (supermarkets) open up Asian sections. Considering that diaspora is an Asian phenomenon, these Asian sections of retail outlets provide supply for the ethnic food needs of Asians and their families; 5. No additives or boosters are added making the product acceptable to buyers who go for pure, natural products.

As in exporting of any food products, there are always problems and challenges that stand in the way of marketing coconut milk/cream. These are: a. High cost of packaging materials. This translates into high price of finished products. This becomes critical in the face of high prices of coconuts engendered by high price of coconut oil abroad.

b. Dominance of Thailand in the world market. Thailand comers a good 90% of the market with its world class quality

161 and competitively priced coconut milk/cream which comes in various packages from consumer to industrial sizes. The competitive edge of Thailand in price goes with the big export volume.

c. Volatility in prices for husked nuts translates into unstable cost of production. The prices of husked nuts for coconut milk follow the prices of copra and husked nuts for desiccating. Since coconut oil’s price moves widely and sometimes wildly in the European and USA markets (coconut oil is merely a price taker), this downswing and upswing creates instability in domestic prices for raw material coconuts for coconut milk/cream production;

d. Slow growth of Filipino restaurants in countries with high levels of concentration of Filipino population. Unlike the Thais who, according to statistics, have put up 3,000 restaurants in China (Medina, 1999:521) that includes in their menu coconut milk, Filipinos are rather slow in this area;

e. Lack of sufficient and effective advertising and promotions that would project the beauty, utility, price competitiveness and accessibility of the product. This, we know, is a costly exercise. But to make it easy on the pocket of the exporters, this can be jointly shouldered by producers.

What are the prospects for coconut milk/cream in the near term? We guess the growth rate in export would continue.

We have a dream that we hope enterprising Filipinos will put into reality. Our dream is this: enterprising Filipinos will soon develop original Filipino flavors that shall come of age just like the Thai, just like the Japanese food which is going into retail stores of big multinational food retailers all over the world. When this happens, then there will be a phenomenal growth in the export of coconut milk and cream. When this happens, then the very lopsided market sharing between our friends from this wonderful country and the Philippines can, perhaps, change from the current 90:10 in favor of Thailand to something like 70:30 or 60:40, still in favor of Thailand.

The list of exporters of coconut milk/cream is shown in Table 5.

162 4. Coconut Coir Products

Compared to India and Sri Lanka, the world’s leading exporters of coir fiber products, what we have in the Philippines may be just “a flash in the pan.” At present, we have 35 processing plants converting coconut husks into various products. These plants have a combined rated processing capacity of 70 MT of fiber (CH3) and approximately 140 MT of coco peat per day. The coconut coir sector is a laggard in the colossal Philippine coconut industry. Its growth was stunted in the early 70’s by the surge in import of low-priced synthetic fibers. This forced the giant coconut husk processing plants to fold up. This coir sector now finds resuscitation with the advent of the Green Movement and the trend towards the use of environment friendly and biodegradable materials. Hence, gradually but surely, this sector is making its presence felt in the global market.

Coir fiber exports grew from a measly 235 MT in 1991 to 844 MT in 1998. Average annual export was 614 MT with a growth rate of 30% yearly. Export peaked in 1997 with shipment of 1,008 MT.

Export earnings were on the uptrend, averaging US $ 529,370 with an average growth rate of 57%. It almost hit US $ 1 Million in 1997.

Coir fiber products are exported to 16 countries. Japan is the No. 1 market with a share of 61% (US $ 323,180). Other leading markets, in descending order, are: Australia with 11% (US $ 60,000); USA with 9% (US $ 48,000); and Hongkong with 8.5% (US $ 45,000).

The export of coir dust started only in 1992 with 38 MT. This increased to 312 MT in 1998. The average annual export was 155 MT with growth rte of 90% annually.

Export earnings registered a mean of US S 24,330 yearly with growth rate of 152%. Export peaked in 1996 at US $69,250. Major markets are Japan (US $ 12,000); Taiwan (US $ 5,000); and, Korea (US $ 3,440).

The demand for both coir fiber products and coco peat is growing. The prices for baled fiber and manufactured fiber products are stable. Prices of compacted coir dust (in brick form) are stable to firm.

163 The growing demand for these products are attributable to the following favorable factors:

a. Individual and commercial users of both coir fiber/coco peat are fully aware of their attributes to improve the ecosystem;

b. Japan relies heavily on coir fiber for her furniture industry and other industrial uses;

c. In South Korea,

i. livestock especially cattle in fattening pens are protected from mud by spreading the muddy soil with thick layers of coco peat.

ii. coco peat is used as a carrier in the manufacture of waste decomposers, minimizing garbage and odor load, diseases borne by flies and other pests, and at the same time, turning waste into organic compost fertilizer.

d. Coco peat is a welcome substitute for peat moss as mining of peat moss is now banned in the USA.

e. Users of these products know fully well that future supply is sustainable as coconut is a renewable resource.

f. Consumers all over the world fully appreciate the beneficial effects to health (consumption of organically grown fruits/vegetables) and to the environment that these two products give. These products have just passed the introduction stage and are now well on their way, to use the words of economist W. W. Rostow, to the “take off stage”, that is growth.

g. The advocates of Save The Earth/Green Movement from advanced countries of Europe and the USA shift the demand for these products from stable to growing.

h. Evidently, use for coir fiber products is diversifying. Geotextile nets are used to prevent soil erosion. Fascine rolls are used in river banks to restore the life of rivers and

164 tributaries. Coco peat is used in hydroponics (soil-less agriculture) and in golf courses (the water holding capacity of coco peat, which is eight times its weight, reduces cost of watering).

i. Importers have the confidence of continuous supply as, at the current rate of production and exportation, not even 2% of the annual supply of coconut husk is converted into fiber and coco peat.

On the minus side, this sector is facing quite a number of constraints that impede its fast and orderly growth and development. These are:

a. High freight cost. This works against competitiveness, price- wise.

b. Competition among decorticating plants for husks unnecessarily raises the price of the raw material as processors that cluster in an area of limited coconut production fight each other for limited raw material supply.

c. Smaller volume for export due to small operating capacities. This is exacerbated by the absence of common facilities for downstream processing.

The trend is for demand in North American and Europe to further grow. A large segment of potential markets in these areas remains untapped. For instance, we foresee that, in the immediate future, the shipment of coco peat to the big vegetable factories in California (that use hydroponics technology) will shift from compacted, bricked form to bulk shipment. The Middle East countries, too, are big potential markets.

Tables 6 and 7 show the list of decorticating plants and exporters of coir fiber products and cocopeat.

5. Oleochemicals

The Philippines has abundant raw materials for the production of basic and intermediate cocochemicals. Basic cocochemicals are products produced from coconut oil while intermediate cocochemicals are products which use basic cocochemicals as raw materials. The chemical composition of coconut oil is similar to that of palm kernel oil. The difference between the two is that coconut oil contains a large volume of Cg

165 and Cio while palm kernel oil contains Qg. However, this difference is very marginal. As a result, basic oleochemicals and derivatives produced from coconut oil compete with those manufactured from palm kernel oil. (Patino, et.al, 1999:1)

The industry is composed of the basic oleochemical producers of fatty alcohols, fatty acids, methyl esters and glycerine as by-product; and the surfactant or oleochemical derivative producers involved in the manufacture of alcohol sulfates, alkyl phosphates, amines, distearates, etc. The derivative producers source their raw materials from the basic chemical producers.

The local cocochemicals industry is largely export-oriented since the domestic market is too small to support an economic size plant. Hence, aside from providing the Philippine coconut industry a big boost in terms of expanded market base, the industry also increases the country’s dollar earnings through exports of cocochemical products which are more value- added products relative to coconut oil or copra (Patino, 1999:1).

The country’s export of basic oleochemicals, in copra equivalent, averaged 125,000 MT annually, valued at US $ 75 M. The derivatives and by-products value-wise, averaged US $ 23.9 M.

The major chemicals (fatty alcohol, fatty acid, and methyl ester) are exported to Netherlands, USA, Japan, Germany, Thailand, Indonesia, South Africa, Malaysia, Iran, New Zealand, Thailand, Peoples Republic of China, Brazil, Korea, Singapore, Taiwan, and other countries.

Starting in 1990, this sector of the coconut industry saw a definite trend towards the increasing use of natural-based raw materials. From 1988 to 1991, ethylene prices where at a premium over coconut oil making natural-based fatty alcohols highly competitive. This period provided the impetus for the capacity expansion in natural alcohols especially in the ASEAN region. Upon completion of the new fatty alcohol plants during the period 1993-95, additional demand for feedstock, palm kernel oil and coconut oil resulted in prices rising above that of ethylene. The high prices of natural feedstocks over the last five years has resulted in a slow down and even a reversal of the trend toward naturals (Patino, 1998:2, underscoring supplied). Table 8 shows the comparative prices between ethylene and crude coconut oil from 1986 to 1998. This table is reproduced in Figure 1 in a graphical form for a better comparison.

166 The following explains the reasons for the successful export marketing of Philippine oleochemicals:

1. Oleochemical-based products biodgrade easily; hence, friendly to the environment.

2. Based on life cycle inventory, natural-derived surfactants have the advantage of having a lower overall energy requirement compared to petrochemical-sourced surfactants. Both on the calorific value of oleochemical raw materials and on the process and transport energy, oleochemical surfactants show an advantage over those produced from petrochemicals (Patino, 1998:2)

3. Demand for surfactants grow at 3-4% annually.

4. Processing plants for petrochemical-based surfactants were running at full capacity thereby allowing natural-based chemical plants to fill the supply gap. This coincided with 2 years when ethylene’s prices were lower than coconut oils (Table 8)

5. Philippine oleochemical plants were meticulously designed to specifically meet the stringent quality requirements of foreign buyers.

6. Natural oleochemicals are also more replenishable.

The future of oleochemical manufacture hinges on the price of coconut oil vis-a-vis ethylene. This is a critical factor as the cost of raw material constitutes 80% of total production cost. As the marketing of oleochemicals is not always characterized by “smooth sailing”, there are problems that stand in the way of maintaining, much less expanding, the current market. A few are cited here:

a. The niche market for oleochemicals is small. This is the personal care product area which constitutes 30% of the entire market.

b. The bigger the premium of coconut oil price over ethylene’s, the greater is the temptation for detergent/soap manufacturers to switch to petroleum-based chemicals.

167 c. The additional processing capacity of synthetic oleochemicals which will be operational by next year will surely pose competition to the naturals.

d. The confirmation by a thorough R & D and the eventual exploitation of the earlier finding that there is no difference between synthetic-based and natural-based soaps and detergents insofar as their effects on the environment is concerned, is of grave concern to the oleochemical manufacturers.

The Philippine manufacturers and exporters of oleochemicals and their production capacities are shown in Table 9.

D. Prospects For The Non-Traditional Products

1. Fresh Young Coconut

The niche market in Taiwan will continue. The volume of export may, however, vary depending on Taiwan’s own harvest of young coconuts. However, whatever volume may be lost in Taiwan may be more than recovered in Korea as initial shipments are very encouraging.

As the pressure from both importers and exporters mount, it is expected that, within the next 2 years, Taiwan will revert to a totally free market system by discarding the quota system implemented via bidding.

2. Nata de Coco

We remain bullish about the demand for nata de coco in its current food uses. Fearless forecast is that export volume may remain at 5,520 - 6,000 MT at worst, or rise to 7,020 - 7,500 MT at best. The latter figure is easily attainable given a little marketing push to target Filipino and Asian communities in Europe and North America. The serious research being undertaken by Sony of Japan may result in a breakthrough that will make nata de coco an inseparable input to electronic products. A more realistic scenario of what the future holds for nata de coco will be unveiled by July 15 Congress of Nata De Coco Producers, Processors and Exporters. In the meantime, I urge you to eat nata, as I do

168 regularly after each meal. This explains why I am slim, healthy and, as my wife will confirm, very strong.

3. Coconut Cream/Milk

The phenomenal growth of ready-to-eat meals marketed all over the world by transnational companies and their network of retailers augurs well for an expanded demand for this exotic and biological product from coconut meat.

Realistically, I do not foresee the day when the Philippines will overtake Thailand in the coconut milk/cream market. But one thing is sure, though. Filipino exporters of this product will be happy to be given by our ffiends from Thailand a bigger share of the market. Our exporters are very much aware of what entails to expand the market. In fact, right now, a coconut milk processing plant is expanding its processing capacity in anticipation of increased demand.

4. Coconut Coir Products

The laggard which is just crawling now will definitely walk. After walking fast, it will run.

The export of fiber products and coco peat is expected to quadruple in 2-3 years time. This phenomenon is attributable to the dynamic and aggressive marketing stance taken by a leading exporter of these products. This will be made possible by a cooperative undertaking among small decorticating plants that will have a common downstream processing facility to cope up with increasing demand. As this happens, Philippine export will become more competitive due to economies of scale in processing and transport.

5. Oleochemicals

The prospect for this sector is this: demand will continue to increase by 3-4% annually. The capability of the manufacturers to meet this demand is, however, contingent upon two factors: the price of coconut oil vis-a-vis ethylene’s and the reliability of supply of coconut oil. In the long term the viability of oleochemical manufacture depends on their backward linkage with plantation size coconut based farming system and the integrated processing of the coconut fruit. Only in this way

169 can the oleochemical manufacturers be assured of competitive price of coconut oil.

E. Conclusion

In thirty minutes, I have tried to paint to you in broad canvass with somewhat broad strokes what the markets for the five non-traditional coconut products from the Philippines look like. What I have described may not be an exact replica of what the actual and prospective situations are as exporters themselves would describe them. But what I have just presented to you are actual figures that our office monitors. The success stories and constraints were gathered from my interviews of some exporters. If I may have deviated from the actual situation, to get right back on track, you may write directly to the exporters of these products. The reasons for providing you the lists of exporters are two-fold: First, to answer your questions which I cannot answer - either by email or fax. Second, to serve as ready reference if you want to do business on these products - either as an importer or commission agent.

Let me end my presentation with this reminder: As members and as descendants of a BIG INTERNATIONAL FAMILY OF NUTS, LET’S CONTINUE CONSUMING AND PROMOTING THE USE OF COCONUT PRODUCTS.

nmbcctech99

170 REFERENCES

Boceta, Norberto M. & Mill a, Perfecto D. The Nata De Coco Craze. Coconuts Today. (Manila, Philippines, vol XI, No. 1, October 1994)

Patino, Evelina L. Coconut Industry Demand-Supply Matching. 1998.

______. The Economics of An Integrated Coconut Oil/Oleochemical Industry Plant. 1998.

______. Oleochemical Vis-a-vis Petrochemicals. Environment- Friendly Coconut And Coconut Products. Proceedings O f The XXXIV COCOTECH Meeting, July 14-18, 1997, Manila, Philippines.

Market Development Department, Philippine Coconut Authority. Export Statistics On Traditional & Non-Traditional Coconut Products & By-Products.

______. Lists ofExporters and Decorticating Plants.

Medina, Tomas, Marketing Status of Coconut Products For Export. Proceedings: 35th Annual Convention of the Philippine Association of Food Technologists, Robinson Galeria, Ortigas, Pasig City, Nov. 18-20, 1996.

171 TA B LE 1. LIST OF TRADITIONAL AND NON-TRADITIONAL COCONUT PRODUCTS AND BY-PRODUCTS FROM THE PHILIPPINES

A. TRADITIONAL PRODUCTS

1. Copra 2. Coconut Oil 3. Copra Meal 4. Desiccated Coconut 5. Coco Shell Charcoal 6. Activated Carbon

B. NON—TRADITIONAL PRODUCTS

FOOD NON FOOD

1. Fresh Coconut L Major Coco—Chemicals 2. Husked Nuts a. Fatty Acid 3. Liquid Coco Milk b. Fatty Alcohol 4. Coco MUk Powder c. Methyl Ester 5. Coco Chips 2. Other Coco Chemicals 6. Macapuno a. Refined Glycerine 7. Frozen Coco Meat b. Alkanolamide 8. Bukayo c. Acid Oil 9. Coco Candy 3. Coir (Processed) 10. Coco Jam 4. Coir Waste 11. Nata de Coco 5. Coir Dust 12. Coco Biscuit 6. Coco Husk 13. Special Creamed Coconut 7. Coco Husk Chips 14. Shortening 8. Coco Husk Powder 15. Margarine 9. Coco Shell Charcoal Powder 16. Coco Vinegar 10. Coco Shell Powder 17. Coco Water 11. Coco Shell 18. Coco Water Concentrate 12 Coco Lumber 19. Coco Soy Sauce 13. Toilet/B ath Soap 20. Coco Liquor 14. Laundry Soap 21. U bod 15. Sham poo 16. Paring Oil 17. Coco H andicraft

172 TABLE 2. EXPORTS OF COCONUT PRODUCTS (1994-1998) (Volume in 000 MT, Value in US $000 FOB)

. TRADITIONAL PRODUCTS 1994 1995 1996 1997 1998 AVERAGE

VOLUME Copra 23.70 33.75 3.09 7.00 3.60 1433 Coconut Oil 87L92 1365 _56 82937 1,08091 1,179.09 1,06537 Copra M eal 586.17 787.51 49239 571.02 536.77 59437 Desiccated Coconut 75.95 7335 7038 76.79 7L93 73.72 Coco Shell Charcoal 40.49 3536 4L07 4L04 3732 39.09 Activated Carbon 15.81 9.49 19.94 2834 28.02 2032

Total (Copra Terms) 1,526.71 2 3 1 5 .0 2 1,428.36 1,841.45 1 386.38 1,81938

VALUE Copra 8,643.85 12,87927 135430 2,79930 1399.00 5,415.14 Coconut Oil 489,266.96 841,193.13 598,14629 66835634 706,779.05 660,72835 Copra M eal 54,029.89 69,944.86 58,749.05 52311-43 35,12231 54,07131 Desiccated Coconut 71,06821 68,682.84 85,91837 88388.87 72,762.78 7734435 Coco Shell Charcoal 9,194.06 7356.64 9318.44 11367.45 9384.75 9,48437 Activated Carbon 17,156.80 10,631.69 21,122.03 31,42735 29370.70 n 21,941.71

Total 649,359.77 1,010,888.45 775,108.66 854,850.74 854,718.58 82838534

NON-TRADITIONAL PRODUCTS

VOLUME Major Coco Chemicals 1/ 125.98 138.27 115.26 133.52 111.73 124.95 VALUE Major Coco Chemicals 66,127.97 85,610.04 72352.72 82,98331 67,868.14 75,028.48 Other Coco Chemicals 2/ 23,872.03 28389.96 27,44728 22,016.49 18,13136 23,97132 O thers 3/ 35,940.17 18,945.90 25,606.44 21352.66 2L005.41 24370.12 Total 125,940.17 132,945.90 125,606.44 126352.66 107,005.41 123370.12 GRAND TOTAL VOLUME 1,652.69 2,453.29 1 3 4 3 .6 2 1 3 7 4 .9 7 2,098.11 1,944.54

VALUE 775,299.94 1,143,834.35 900,715.10 981,203.40 961,723.99 952355.36

ERCENTAGE SHARE TO TOTAL EXPORT VOLUME Traditional Products 9238 9436 9233 9334 94.67 93.44 Non—Traditional Products 7.62 5.64 7.47 6.76 533 6 3 6

ERCENTAGE SHARE TO TOTAL EXPORT EARNINGS Traditional Products 83.76 8838 S6.G5 87.12 88.87 86.84 Non—Traditional Products 1634 1L62 13.95 12.88 1L13 13.16

. / Aggregate a t .hitry AJcaooi. Metfiyl i n f e r and Fitly Add in copra terms. './ Inciudm Refined G ^erine, Alkaneiamide and Acid Oil 3/ Refen to other coco food and nm food products. Market Development Department TiUpptnw fV rAnnr Authority 173 TABLE 3 PHILIPPINE EXPORTS OF FRESH YOUNG COCONUT VOLUME IN MT; VALUE IN US $ 000 FOB 1979-1998

TAIWAN OTHER COUNTRIES TOTAL YEAR VOLUME VALUE VOLUME VALUE VOLUME VALUE

1979 44 12.62 675 240.10 719 252.72 1980 110 2734 597 196.01 707 22335 1981 334 4331 491 21636 825 259.77 1982 240 17833 943 187.02 U 8 3 36535 1983 1371 24337 572 163.06 2,443 406.63 1984 6,417 720.65 881 219.67 7398 94032 1985 4,633 492.09 380 78.63 5,013 570.72 1986 6,432 890.73 527 117.96 6359 1,008.69 1987 4394 736.98 1,035 236.14 5,629 973.12 1988 2327 373.01 593 131.95 2 3 2 0 304.96 1989 4357 1347.10 1,624 331.69 5,781 1378.79 1990 3369 1,01630 3,710 732.86 7379 1,749.06 1991 3371 1,10039 1,183 28830 4354 1388.69 1992 4329 1311-60 917 225.75 5,146 133735 1993 4,132 1,120.62 1374 31930 5,406 1,43932 1994 2,672 738.00 995 311.66 3,667 1,049.66 1995 3,776 138032 1,000 303.95 4,776 1384.47 1996 4344 1355.04 2,466 61338 6,710 1,868.62 1997 3378 137430 633 321.07 4,611 139537 1998 2323 687.70 2350 73035 4,873 1,418.05

174 T A B L E 3 - A PHILIPPINE EXPORTERS OF FRESH YOUNG COCONUT

ALL SEASON FARM CORP. KORPHIL MARKETING & DEV’T CORP. Km. 62 Pres. Laurel Highway 1602 -B Tektite Towers, Exchange Road Brgy. San Roque, Sto. Tomas Ortigas Center, Pasig City 4229 Batamxas 1600 M etro Manila Phone'': (632) 531-25 -22 (Manila) Phone : (632) 634-64-55 to 58 0918-842-63-90 Fax: (632) 634-64-54 Fax: (632) 533-52-38 M r. Hyunchong Um — Pres ./Gen. Mgr. M r. L in co ln JL Tan, Jr. — P resident M s. G loria C. Balderram a — G en. Mgr. LLANES BUKO 3rd Street, EDSA Central, Mandaluyong City ASIA PACIFIC EXPRESS CORP. 1550 Metro Manila Room 809 Cityland 10 Tower II Phone : (632) 633-53-46 to 47; 6815 Ayala Ave. cor. dela Costa SL, Makati City 673-45- 70 1006 M etro Manila Fax: (632) 632 -91-53 Phone : (632) 894-3911/894- 5424 Telex : 23312 RHP PH Fax : (632) 893-2113/893-0312 M r. Armando L. Llanes — President M s. Amelita D. Se mills — Gen. Manager Mr. Carlo C. Canamaque — M arketing Mgr. ROSUA INCORPORATED Room 316, Padilla delos Reyes Building ECCLESIASTES ELEVEN INTL. CORP. 232 Juan Luna Street, Binondo 304 Celery Road, Building 3 1006 Metro Manila PH Complex, Taguig Phone : (632) 241-67-39; 241-66 -89 Metro Manila Fax : (632) 241-68-64 Phone : (632) 838 -47-02; 838-45-53 M r. R o b e rt Sua Fax:(632)838 -4 7 - 52 M r. Leonardo F. dela Cruz — Pres. STANFILCO DIV. OF DOLE PHILS., INC. Dona Socorro SL, Belisario Heights EDMUNDO DELA PENA ENTERPRISES Lanang, Davao City 391 M. R. Lat SL, Maivar Phone : (6382) 234- 02-41; 235-23-41 Batan gas Fax : (632) 233-15-12; 235 -2 3 - 43 Phone : (6343) 778-19-32 M r. M ario M . M orillo — Gen. Mgr. M r. Edmundo dela Pena — G e n . Mgr. TAI—PHIL PASSION LTD. CORP. FAR EAST CONTAINER LINE, INC. 558 Quirino Avenue, Tambo, Parahaque 5th Floor, J.S. Contractor Building 1701 M etro Manila 432 Magallanes SL, Intramuros Phone : (632) 831-15 -43; 831-82-36 1002 M etro Manila Fax:(632)831-82 -35 Phone/Fax: (632) 527-67-71 M r. Yang Chi Hai Telex : 63268 ETPP DR M r. Jackson T.S. Gan — PresJGen. Mgr.

GOLDEN EXPORT 1974—D Obisis Street, Pan da can 1011 M etro Manila Phone : (632) 563-02 -66; 524-01-62 Fax: (632)522-29-16 M r. Irineo Amores — P roprietor

175 Table 4. PHILIPPINE NATA DE COCO EXPORTS 1989 - 1998 Volume in Metric Tons

DESTINATION 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Average

N orth A m e ric a 165.17 109.05 124.87 125.83 199.86 357.54 275.24 328.11 398.10 455.18 253.90

E urope 14.12 12.22 12.99 16.97 83.32 62.67 56.03 107.64 113.28 31.41 51.07

Asia & Pacific 77.16 53.87 188.23 454.62 13,959.26 15,409.30 5,741.60 5,603.64 4,568.80 5,377.76 5,143.42

Middle East 52.81 24.99 30.29 42.30 61.40 59.34 68.84 60.62 58.21 50.57 50.94

TOTAL 309.26 200.13 356.38 639.72 14,303.84 15,888.85 6,141.71 6,100.01 5,138.39 5,914.92 5,499.32

Growth Rate -3 5 .2 9 78.07 79.51 2,135.95 11.08 -6 1 .3 5 -0 .6 8 -1 5 .7 6 15.11 245.18

PHILIPPINE NATA DE COCO EXPORTS 1989 - 1998 Value in US $ 000 FOB

DESTINATION 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Average

N orth A m e ric a 183.48 197.86 224.84 232.40 304.24 612.45 517.38 647.28 769.02 855.05 454.40

E u ro p e 22.63 18.78 24.09 31.28 114.73 96.11 109.17 179.34 170.51 58.35 82.50

Asia & Pacific 76.63 70.89 260.51 714.67 25,531.61 21,717.92 6,841.90 6,450.86 5,027.70 5,193.42 7,188.61

Middle East 53.43 47.78 53.42 78.16 109.04 109.43 129.76 112.03 109.20 95.34 89.76

TOTAL 336.17 335.31 562.86 1,056.51 26,059.62 22,535.91 7,598.21 7,389.51 6,076.43 6,202.16 7,815 27

Growth Rate -0 .2 6 67.86 87.70 2,366.58 -1 3 .5 2 -6 6 .2 8 -2 .7 5 -1 7 .7 7 2.07 269.29

SOURCE: MARKET DEVELOPMENT DEPARTMENT, PCA 176 Table 4-A DIRECTORY OF PHILIPPINE PROCESSORS/EXPORTERS OF NATA DE COCO

1. STANFOOD CORPORATION 2350 Gamban St., Balut Balut, Tondo, Manila Tel. No: (632)253-7704/253-7707 Fax No: (632)253-0104 Contact Person: Mr. Raymund C. Yan Ms. Zeny Ruiz

2. KHENG-RON-LI ENTERPRISES Room 904 Enterprises Bldg. 524 Quintin Paredes St., Binondo Manila Tel No: (632)241-1050 Fax No: (632)241-1041 Contact Person: Mr. Ronnie Ching Chi Tek

3. KORPHEL MARKETING & DEVELOPMENT CORPORATION 1602-b Tektite Towers, Exchange Road Ortigas Center, Pasig City Tel No: (632)634-6455 to 58 Fax No: (632)634-6454 Contact Person: Mr. Hyunchong Um

4 FITRITE, INC 145 Gen. Evangelista Ext. Caloocah, Metro Manila Tel. No: (632)363-6061 Fax No: (632)361-4472/361-7338/361-4472 Contact Person: Mr. Leon Solidum-Office Manager Ms. Josie Fong 5

5 JONA’S INTERNATIONAL PHILS., INC 17 Clemente St. Barangay San Agustin Novaliches, Quezon City Tel. No: (632)936-7239 to 41/ 938-9037/930-6001 to 05/418-6500 Fax No: (632)936-7245/939-5828 Contact Person: Mr. Philip Young - President Ms. Cathy Mendoza - Export Manager

177 6 NEWTON FOOD PRODUCTS MFTG. CORP 84 Ramon Delfin St., Manilas Valenzuela, Metro Manila Tel. No: (632)291-6792/291-6772 Fax No: (632)291-6792 Contact Person: Mrs. Ligaya Uy - Export Manager

7. FLORENCE FOOD CORPORATION 1051 North Bay Boulevard Navotas, Metro Manila Tel. No: (632)282-4283 Fax No: (632)281-2840 Contact Person: Mr. Henson Laurel - President Ms. Annette Arce - Export Manager

8. DALISAY SWEETS 18 de Jesus St. San Francisco del Monte Quezon City Tel. No: (632)928-5477/929-5844 Fax No: (632)920-1164 Contact Person: Mr. Jim Falcatan

9 SAN PABLO CHOICE FOODS, INC Phil. Center for Population Devt. Complex (Metropole) Pasong Tamo Ext., Taguig, Metro Manila Tel. No: (632)810-4986/810-4941 Fax No: (632)810-4064/810-7392 Contact Person: Ms. Claudette Cordon - President

10 FCG TRADING PHILS., INC 9 Guirayan St., Araneta Subd. Quezon City Tel No: (632)715-1154/715-7753 Fax No: (632)715-1165 Contact Person: Ms. Cora Alforja

FN. : NDC DIR

178 Table 5 DIRECTORY OF PHILIPPINE MANUFACTURERS/EXPORTERS OF COCONUT MILK CREAM/POWDER

1. ATSON COCO PRODUCTS Coconut milk cream/powder TROPICANA FOOD PRODUCTS Km. 84 Maharlika Highway San Pablo City, Laguna Tel. No.: (093) 562-49560/562-3688 (093) 562-3288/562-0088 Fax No.: (093) 562-0088 Contact Person: Mr. Tiu Sing-President

2. FIESTA BRANDS, INC. Coconut milk powder 3rd Floor 1052 EDSA Magallanes Drive, Makati City Tel. No.: (632)804-0730 Fax No.: (632) 804-0748-49 Contact Persons: Mr. Romeo I. Chan - President Ms. Divine Linan - Marketing Services Assistant

3 NEWTON FOOD PRODUCTS Coconut milk cream MFG. CORP. 84 Ramon Delfin St., Manilas, Valenzuela Metro Manila Tel. No. (632) 291-6792 Fax No. (632) 291-6792 Contact Person: Ms. Ligaya Uy- Export Manager

179 4. SIRAWAN FOOD CORPORATION Coconut milk cream 2281 4th Asia Industries Bldg. Pasong Tamo Ext., Makati City Tel. No.: (632) 816-7179 810-5681 Fax No.: (632) 816-7185 Plant: Sirawan, Toril District Davao City Tel.No.: (6382) 291-0678 Contact Person: Mr. Victor Consunji-President Ms. Lucy C. Reyes-Export Manager

5. STANFOOD CORPORATION Liquid coconut milk 2350 Gamban St. Balut, Tondo, Manila Tel. No. (632) 253-7704 253-1312 Fax No.: (632) 253-0104/283-0104 Contact Persons: Mr.Raymund Yan-President Mrs.Adela Yan-General Manager Mrs.Zeny Ruiz-Export Manager 6

6. UFC Group of Companies Coconut milk cream Ortigas Center, Pasig City Tel #: 636-0279 Fax#: 637-2494 Contact Person: Ms. Arlene Flernandez Accounting Manager

Fn, participants Table 6 PHILIPPINE COIR DECORTICATING PLANTS

1. COMPANY RUELO COCO FIBER INDUSTRIES ADDRESS Bgy. Masico, Pila, Laguna, Philippines CONTACT PERSON MR ALBERTO RUELO RATED CAPACITY 2 mt / day (CH3) TEL. NO. 0912-319-7445

2. COMPANY SORIANO FIBER INDUSTRIES ADDRESS Barangay San Mateo, San Pablo City, Philippines CONTACT PERSON MR FRANCISCO SORIANO POSITION President RATED CAPACITY 4 mt / day (CH3); 6.7 MT/mo.(CH2), 6.7 MT/mo. (CH4) TEL. NO. 0063-49-562-11-57

3. COMPANY HUA YEI ENTERPRISES ADDRESS Masapang, Victoria, Laguna, Philippines CONTACT PERSON MR TUNG-LIANG CHOU POSITION Proprietor RATED CAPACITY 2 mt / day (CH3)

4. COMPANY DIZON (OLD ASIA FIBER) ADDRESS San Pablo City, Laguna, Philippines RATED CAPACITY 2 mt / day (CH3)

5. COMPANY JMY FIBER INDUSTRIES ADDRESS Basa St., San Pablo City, Laguna, Philippines CONTACT PERSON BELEN YAP POSITION Proprietor RATED CAPACITY 9.6 mt / mo. (CH3)

6. COMPANY DC FIBER INDUSTRIES ADDRESS Barangay Palayan, Nagcarlan, Laguna, Philippines CONTACT PERSON ERNESTO ITORALBA POSITION Proprietor RATED CAPACITY 2 mt / day TEL. NO. 0063-2-735-31-35

181 QUEZON

7. COMPANY LUTUCAN MULTI PURPOSE COOP. INC. ADDRESS Lutucan, Sariaya, Quezon, Philippines CONTACT PERSON ENGR BERNARDO PACO POSITION President RATED CAPACITY 2 mt / day (CH3) TEL. NO. 0063-2-842-78 (Manila Office)

8. COMPANY TIAONG FIBER INDUSTRIES ADDRESS Bgy. San Agustin, Tiaong, Quezon, Philippines CONTACT PERSON MR SEBASTIAN JA VENA POSITION General Manager RATED CAPACITY 2 mt / day (CH3)

9. COMPANY YELLOW BAR COERCRAFT ADDRESS Barangay Manggalang, Sariaya, Quezon, Philippines CONTACT PERSON MR MARIANO SASON POSITION Proprietor RATED CAPACITY 3.5 mt / day TEL. NO. 0912-331-6741

10. COMPANY TIAONG AGRICULTURAL MULTI - PURPOSE COOPERATIVE INC ADDRESS Tiaong, Quezon, Philippines RATED CAPACITY 4 mt / day (CH3)

11. COMPANY FCX INTERNATIONAL ADDRESS Mauban, Quezon, Philippines CONTACT PERSON MR M.B. CLAVERIA POSITION President RATED CAPACITY 2 mt / day (CH3) TEL. NO. 0063-2-716-5708 (Manila Office)

12. COMPANY LOPEZ MULTI-PURPOSE COOP ADDRESS Lopez, Quezon, Philippines RATED CAPACITY 2 mt / day (CH3)

182 13. COMPANY SAN JOACHIN COCO FARMERS MULTI-PURPOSE COOPERATIVE ADDRESS Brgy. San Joachin, Ma. Aurora, Quezon, Philippines CONTACT PERSON MS RE VELINA BENITEZ POSITION President RATED CAPACITY 2 mt / day (CH3)

14. COMPANY INTEGRATED COCO FIBER CORP. ADDRESS Sariaya, Quezon, Philippines CONTACT PERSON MR DONALD NAZARENO POSITION Manager RATED CAPACITY 2 mt / day (CH3) TEL. NO. 0063-2-829-9641

15. COMPANY BUNOTEX ADDRESS San Roque, Sariaya, Quezon, Philippines CONTACT PERSON MS. CRISTINA CEDENO POSITION Proprietor RATED CAPACITY 1.5 mt / day (CH3)

16. COMPANY FIBERTECH DEVELOPMENT CORPORATION ADDRESS Candelaria, Quezon, Philippines CONTACT PERSON MR JOEL DELA ROSA POSITION Export Manager RATED CAPACITY 2 mt/ day

17. COMPANY BEL FIBER ADDRESS Sariaya, Quezon, Philippines CONTACT PERSON MR LUIS VISCOCHO, JR POSITION Proprietor RATED CAPACITY 2 mt / day TEL. NO. 0063-42-71-36-68

BATANGAS

IS. COMPANY ASIA FIBER CENTER ADDRESS Sto. Tomas, Batangas, Philippines CONTACT PERSON MR OLIVER CO POSITION Plant Manager RATED CAPACITY 2 mt / day TEL. NO. 0063-2-725-65-65

183 BICOL 19. COMPANY ALBAY MULTI-FIBER INDUSTRIES ADDRESS Tabaco, Albay, Philippines CONTACT PERSON MR FRANCISCO SORIANO RATED CAPACITY 4 mt / day (CH3)

20. COMPANY BICOL BAY EXPORT ADDRESS Legaspi, Albay, Philippines CONTACT PERSON MR RICHARD HUENEFELD POSITION President RATED CAPACITY 2 mt / day (CH3)

21. COMPANY JUBOKEN ENTERPRISES ADDRESS Guinobatan, Albay, Philippines CONTACT PERSON DR JUSTINO ARBOLEDA POSITION President RATED CAPACITY 1.5/day (CH3) TEL. NO. 0063-52-4846-012

22. COMPANY SANDIGAN NG 3VIAGSASAKA ADDRESS Irosin, Sorsogon, Philippines CONTACT PERSON MS. NENITA HONAS AN POSITION President RATED CAPACITY 2 mt / day (CEB)

23. COMPANY CASTILLA DEV’T. COOP ADDRESS Castilla, Sorsogon, Philippines RATED CAPACITY 1.5 mt / day (CH3)

24. COMPANY BEAM INCORPORATED ADDRESS Bulan, Sorsogon, Philippines CONTACT PERSON MR GASPARESBER POSITION Director RATED CAPACITY 2 mt / day (CH3)

25. COMPANY MIC MAI COCO ENTERPRISES ADDRESS Pinamurbahan, Mobo, Masbate, Philippines CONTACT PERSON MR JUN ESPINOSA POSITION Proprietor RATED CAPACITY 3 mt / day TEL. NO. 0063-56-333-211-20 (Plant Site)

184 26. COMPANY FATIMA MULTI-PURPOSE COCO COIR PROCESSING PROJECT ADDRESS San Agustin, Iriga City, Philippines CONTACT PERSON MS. JEAN FILLON POSITION Proprietor RATED CAPACITY 2 mt/day (CH3)

VISAYAS

27. COMPANY PCA - LOAY COOPERATIVE ADDRESS Bohol, Philippines CONTACT PERSON MR E. ROMERO POSITION PCA Provincial Manager RATED CAPACITY 1.5 mt / day (CH3)

28. COMPANY SOMOGI - CATARMAN COOP ADDRESS Catarman, Samar, Philippines CONTACT PERSON MR SAMUEL GELERA POSITION Manager RATED CAPACITY 1.5 mt / day (CH3)

DAVAO

29. COMPANY DAVAO com FACTORY ADDRESS Davao City, Philippines CONTACT PERSON MR SLL VINO CABANAS POSITION Proprietor RATED CAPACITY 1 mt /day (CH3)

30. COMPANY R. ALFARARA - TORIL ADDRESS Davao City, Philippines CONTACT PERSON MS. ROSEL ALFARARA POSITION Proprietor RATED CAPACITY 0.5 mt/day (CH3)

31. COMPANY LEGASPI OIL COCONUT FIBERS CORP. ADDRESS Mabini, Davao Oriental, Philippines CONTACT PERSON POSITION RATED CAPACITY 3 mt / day

185 32. COMPANY PTRI - DOST MATI COOP ADDRESS Mayo, Mati, Davao Oriental, Philippines CONTACT PERSON SAMUEL MONTON POSITION Vice President for Operations RATED CAPACITY 2 mt / day TEL. NO. 0063-2-631-1531

33. COMPANY PCA-MAIDEN ADDRESS Mayo, Mati, Davao Oriental, Philippines CONTACT PERSON SOCORRO PUEBLO POSITION Manager RATED CAPACITY 2 mt / 1day (CH3)

34. COMPANY BF INDUSTRIES - TORLL ADDRESS Davao City, Philippines CONTACT PERSON MR BONIFACIO FERNANDEZ POSITION Proprietor RATED CAPACITY 1.5 mt / day (CH3)

35. COMPANY SARANGANICOCOTECH ADDRESS Kling, Klamba, Sarangani Prov., Philippines CONTACT PERSON MR MINRAD O R 0 $ 0 POSITION Plant Manager RATED CAPACITY 2 mt/day (CH3), coimet TEL. NO. 0063-2-527-784

Total Capacity = 70.8 mt/day a:/coirlist/COIR-FIBER’ 99

186 Table 7 Philippine Exporters of Coconut Coir Fiber Products & Coco Peat

COMPANY NAME/ADDRESS CONTACT PERSON & TELEPHONE NO.

1. Natural Organic Resources Mr. Santos Reyes, Jr. Mfg., Inc. (63)-97-378-91-70 Masapang, Victoria, Laguna

2. Woosam Corporation Mr. Roman Donatello Diaz Unit 1701 Centerpoint Bldg. (63) 2-633-9741/42 Garnet Street, Ortigas Center Fax No. (63)2-633-9766 Pasig City, Philippines

3. Juboken Enterprises Dr. Justino Arboleda Maharlika Highway President Travesia, Alb ay (63) 52-4846-012 Philippines (63) 2-924-9577

4. Mic Mai Coco Enterprises Mr. Moises Espinosa, Jf. Pinamarbuhan, Mobo (63) 56-333-2121 Masbate, Philippines

5. Asia Fiber Center Mr Roger Go San Vicente, Sto. Tomas President Batangas, Philippines (63) 2-725-8565 (63) 2-722-66-36

6. Soriano Fiber Industries Mr. Francisco Soriano San Pablo City President Philippines (63)49-562-1157 (63) 2-801-95-65

7. AIM Manufacturing Corp. Ms. Monette D. Gaw San Pablo City President Philippines (63) 49-246-5850

8. DBI Phils. Co., Inc. Mr. Eric In San Vicente 4000 Vice President San Pablo City (63) 49-6843 Laguna, Philippines Fax No. (63)49-562-6189

187 TABLE 8 COMPARATIVE PRICES OF ETHYLENE & CRUDE COCONUT OIL U.S. Contract, CIF USA

YEAR ETHYLENE CRUDE COCONUT OIL (c/lb) (c/lb)

1986 16.00 13.46

1 9 8 7 15.50 20 .5 4

1988 28.50 2 5 .1 7

1 9 8 9 30.20 23 .8 4

1990 25.20 15 .8 2

1991 22.20 20 .1 6

1 9 9 2 22.40 26.55

1993 21.50 20.95

1994 25.00 27 .9 0

1995 26.50 30 .7 2

1996 22.20 34 .4 4

1 9 9 7 18.00 30.35

1998 13.58 3 0 .4 7

Source: Marketing Data File (P&G WIOP presentation) for ethylene prices UCAP for CNO prices 1998 date for ethylene price from ICISLOR

188 TABLE 9 EXISTING OLEOCHEMICAL PRODUCERS IN THE PHIILIPPINES

; NAME OF COMPANY PRODUCT LINES CAPACITY (MT/YEAR)

Basic Oleochemicals:

United Coconut Chemicals, Inc. Fattv Acids, Fatty Alcohol, Glycerine 114,3211 i Pilipinas Kao, Inc. Fatty Alcohol, Glycerine, Fatty Amines 93,485

S e n b e l Fatty Alcohol, Methyl Esters, Glycerine, 12,400 Alkanolamides i D & L Industries M ethyl Esters, Glycerine, Alkanolamides 6,000 ■

Lina Holdings Oleochemicals, Inc. M ethvl Esters, Fatty Acids, Refined Glycerin 4 9 ,2 0 0 ! j Primo Oleochemicals, Inc. Fatty Alcohol, Glycerine 51,751 ! ijUnistar Oleochemicals, Inc. Cocofatty Acid Methylester, Coco 7,500

Monoethanolamide, Coco Diethanolamide i Derivatives: I Chemphil Albright & W ilso n Coco Fatty Alcohol Sulfate 14,400:

Royal Industrial Coco Fattv Alcohol Sulfate 15,500

Stepan Phils. Coco Fatty Alcohol Sulfate 36,000

Unilever (PRC) Coco Fatty Alcohol Sulfate 1 9 ,2 0 0 ! i Optim os Industrial Dev., Inc. Surfactants 14.000 !

Downstream:

International Pharmaceuticals G lycerine 600!

Sakamoto Orient Chemicals Corp. G lycerine 8 ,0 0 0 ; ; 1 By-Products:

Countryside■j Millers, ' Inc. Low FFA Oil, Cochin Oil, Crude Fatty Acid, 1,800 Acidulated Oil, Stream Distilled Oil

Source: Board of Investments - Industry Development Council

189 ''igjiri- i

(Sm uw: USA :m

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

ETHYLENE — 16.00 15.50 28.50 30.20 25.20 22.20 22.40 21.50 25.00 26.50 22.20 18.00 13.58

CRUDE COCONUT OIL — 13.46 20.54 25.17 23.84 15.82 20.16 26.55 20.95 27.90 30.72 34.44 30.35 30.47

190