Bernardo M. Villegas
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Role of Agro-Industrial Business Corridors (Part 2)

          Actually, the planned Clark City agro-industrial business corridor will not be the first of its kind.  Already, there is a thriving agro-industrial estate in the island of Mindanao, the ANFLO Industrial Estate (AIE) strategically located in a 63-hectare property between Davao City and Tagum City.  Despite sporadic peace and order challenges, Mindanao is still the agribusiness paradise of the Philippines and is a vital part of the East ASEAN Growth Area (EAGA) or BIMP (Brunei, Indonesia, Malaysia and the Philippines).  AIE is well positioned and designed to fully develop the vast potential of the agribusiness sector of the Davao Region and the whole island of Mindanao by providing a ready market for the region’s agricultural produce and efficiently export them to the rest of the world as it is already doing in the cases of pineapples, bananas and coconut products.  AIE is a self-sustaining ecozone (with all the tax and other incentives of economic zones) with complete facilities for manufacturing, cottage industries, warehousing and other agro-industrial operations.

         As reported in the Business World, this agro-industrial business corridor offers ready-built standard factory buildings for lease to locators who are looking to immediately start their operations.  The appropriate infrastructures have been built, such as a wide road network; a drainage system; sufficient water and power supply from trusted providers; and sewage collection, treatment, and disposal systems.  Any agri-business operation, whether manufacturing, warehousing, cold storage or other forms of logistics, can be readily started within AIE.  Especially timely during these times of the pandemic is the cold storage facility already available for lease.  Such a facility is not only critical for food products but also for anti-COVID 19 vaccines that require cold storage facilities

         AIE is registered under the Philippine Economic Zone Authority (PEZA), which will enable its locators to avail of attractive PEZA incentives, such as tax holidays and other exemptions.  The presence of the corridor makes for a smoother and easier process of doing business in the country where red tape and endless bureaucracy can still be an obstacle, especially to foreign investors.  Exporters and importers will find the location of AIE especially favorable because it is a short distance from the Davao International Container Terminal, Mindanao’s premier container terminal for the efficient import and export of mainly agricultural produce.   AIE not only has easy access to different cities within the island of Mindanao and the Philippines, but is also strategically located to do business with the countries of the East ASEAN Growth Area as well as the other countries of the ASEAN Economic Community (AEC).  Already AIE has 18 locators as of June 2021, represented by 18 nationalities and belonging to diverse industries such as food processing, plastics, packaging, warehousing and storage.

         AIE has defied the adverse economic impact of the pandemic.  As of January 2021, it reported that workers in the park doubled to 686, from 289 a year ago.  Four locators were able to start their operations in 2020, while a Japanese company engaged in the premium packaging of products was scheduled to start operation in July 2021, a healthy sign that the pandemic has not stopped Japanese investors from considering the Philippines as an attractive site to which to transfer some of their manufacturing operations.  Last November 2020, AIE was the first prize winner of the Best Industrial Development award at the Eighth Property Guru Philippine Property Awards.  Encouraged by these initial positive responses, AIE intends to roll out during the next two years two additional industrial phases which will be available for lease or sale starting at 4,000 square meters per industrial lot.

         It is our hope that these two specific examples of agro-industrial business corridors  will inspire many other groups to establish similar agro-industrial zones in key regions of the Philippine Archipelago, starting with those regions that were identified more than ten years ago in a study funded by the U.S.A.I.D as potential competitors to Metro Manila as regional and international trading hubs. These were Batangas City in Luzon; Iloilo City in the Visayas; and Cagayan de Oro City in Mindanao. With the  Build, Build, Build program of the Duterte Administration, there have been sufficient improvements in infrastructures and connectivity to widen the choice to include many other potential agro-industrial corridors such as Davao, General Santos, Puerto Princesa, Tuguegarao, Laoag, and Butuan, among many others.  It is not too late for the Philippines to join the agri-business tigers of Asia today, such as Thailand, Malaysia, Indonesia and Vietnam.  The main motivation our leaders should have in promoting agro-industrial corridors should be the eradication of poverty in the next decade or so.  The processing plants that will  be located in these zones can serve as integrators for thousands of small farmers who, either through cooperatives; the nucleus estate model made famous by the Malaysians (and called by some bankers in the Philippines as corporatives);  contract growing and other means of consolidating the operations of the small farmer beneficiaries of the expired agrarian reform program.  I have no doubt that agro-industrial zones can do much to reduce the poverty incidence in these “rurban” regions where they will be located.  For comments, my email address is bernardo.villegas@uap.asia.