Bernardo M. Villegas
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A Dream Project in Leyte (Part 1)

 Eastern Visayas (Samar and Leyte) suffers from one of the highest poverty incidences in the country.  Being predominantly a coconut-producing region, this fact demonstrates that coconut farmers are among the poorest of the poor in our society.   That is why, I was very elated when I received a most detailed feasibility study of a highly integrated agribusiness venture to be located in the town of Babatngon, a remote area in Leyte, from Nu Agri Asia Corporation (NAAC), a consulting firm dedicated to the premiumization of coconut products, natural and organic beverages, and snack items.  NAAC specializes in New Product Development and Manufacturing Technology and focuses primarily on the Natural and Organic Beverage and Snack category.  Their team of experts have extensive experience in developing coconut-based products, alternative-dairy products, premium (100% natural) tropical juices and functional beverages.  It has a sister company, CocoTek Solution Inc., which is the main project management company that has the know how to execute the complex manufacturing aspects of the projects.

            I must say from the outset that the proposed project is overly ambitious, especially as regards mobilizing thousands of farmers to supply its demand, not only for coconuts but also for a good number of high-value fruits and vegetables.  It is also assuming the high risk of locating in one of the most typhoon infested regions in the Philippines (just remember the devastation wrought by Typhoon Yolanda in 2013).  I, nevertheless, would like to summarize the content of the feasibility study in this article in order to get corporations and individuals with large investible funds to at least take a look at the potentials of large-scale food manufacturing primarily based on coconuts and the multiple products that can be intercropped between the coconut trees.  In contrast with the “nucleus estate” perfected by the Malaysians in their palm oil industry in which the small farmers lease their lands to a large corporation, the approach to the consolidation of the small coconut farms being considered by this project in Leyte is the cooperative system.  As the CEO of NAAC, Mr. Dan Baron, wrote in an email: “We can go as far as to form a coconut farmer cooperative in the region and have the COOP participate as an equity share owner in the project.  The member farmers can earn additional income by using a point system internal to the cooperative—and based on the amount of raw materials they directly supply.  We have used this system effectively in other projects and it seems to be a favorite of the farmer.” Let me just point out that the positive experience of Mr. Baron and his team is in contrast with the general rule in the Philippines that most farmer cooperatives (or for that matter other forms of cooperatives) have not been successful.

            Despite the risks involved, I am describing this project for the benefit of a good number of large business enterprises that have been inspired by President Marcos Jr., as simultaneously the Secretary of Administration, to contribute to the greatest need of the country for food security and at the same time bringing  down the high poverty incidence today of some 17% nationally (and much higher in coconut regions)  to single digit of 9% by the end of his term.  With high risks come potential high rewards because, as described below, the processing of coconuts provides a most diversified range of food products that have attained very high demand, not only in our domestic market, but all over the world, especially China and our rich neighbors to the north, i.e. Japan, South Korea, and Taiwan.  As described in the Executive Brief of the Feasibility Study, the Babatngon Project is an integrated food terminal complex and high-value fruit and vegetable processing facility.  As regards infrastructure, the first steps will be the building of the processing facilities and the cold storage.  Then, there will be the infrastructures to accommodate additional locators to join the complex.  With worldwide emphasis (including the Philippines) on both food and energy security, this integrated food factory and additional locator “estate” can greatly benefit the region of Northern Leyte.

            The processing facilities, unlike any in the region, include the following:

            -Processing 300 – 350 tons per day input of de-husked mature coconut from local farmers.

            -Processing of another 300 – 400 tons per day of fruit and vegetables—including mango, banana, calamansi, watermelon, sugar cane, cacao, coffee and many others.

            -Production of coconut products (non-dairy beverages, coffee creamer, coconut water, milk and cream.

            -Production of up to 200 tons of young coconut for water and tender coconut meat  processing.

            -The processing of fruit juices, puree, and pure vegetable soups—all with 12 to 18 month ambient shelf life and using the most advanced UFT technology and modern packaging.

            -The processing of LONG LIFE – FRESH juices using the amazing MST technology.

            -The processing of all the agricultural products using SoniqForce Adar dry particle technology.

            -Efficient IQF processing of any fruit and vegetable product, with special emphasis on mango as an anchor.

            -Frozen storage with a capacity of 3,000 pallet positions.

            -Canteen, laundry, conference and administrative facilities.

            -Additional spots open to other agriculture-based locators.

            High-value processing will be the focus of the project as there must be a means to create non-commoditized products that face high demand in both domestic and global markets, especially in China and the Northeast Asian economies.  This starts with the ability to process liquid food and beverage products of all viscosities (thickness of liquid).  Liquid technologies also include the company’s MST processing, which will allow for fruit and vegetable juices to be processed without pasteurization while still achieving “semi-sterile” status.  This unique technology will allow the refrigerated product to last for as long as 90 days and still taste fresh.  There will also be new retail packaging solutions that use 80% less material than the traditional Tetra Pack.  The food service application includes brand new dispensing technology for aseptic (long shelf-life) beverages.  This pack will last months without the need for refrigeration.  Unlike most of the production of coconut-derived products in the Philippines, this project will not be packaging in bulk, thus escaping the commoditization of the finished goods.  To be continued.