Dr. Nerlita M. Manalili
Managing director
NEXUS Agribusiness Solutions
Vega Center, College, Los Banos, Laguna
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Background and Process of the Study
Industry Situationer
The Primary concern
Emerging Products
Selected Cases
Constraints and Potentials
Possible entry points
Strengthened positions in the Coco chain
Validation of Identified Options: built Scenarios
Concluding Remark
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Done In preparation for a Regional Knowledge
Sharing workshop on enhancing farmers’ market
power in the value chain in Asia (AFA’s initiative)
About successful (and promising) cases of
marketing arrangements in a commodity chain
Focus on selected coconut value chain in Quezon
( the intention is one that will later on be
applied/adopted or out scaled in the near future)
Secondary
Information
Key
informant
Scenario
Building
Assessment
& Validation
Process
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Coconut oil (Crude and Refined)
Banana (fresh)
Tuna
Pineapple & Pineapple Products
Dessicated Coconut
Tobacco (manufactured)
Seaweed and Carageenan
Centrifugal sugar
Milk and Cream Products
Fertilizer (Manufactured)
Philippines - 2nd largest producer in volume & value
Quezon Province Accounts for more than half
of the region’s coconut produce
Coconut Farmers,
biggest in Poverty Group
In spite of contribution to GVA and
Agricultural trade:
 Coconut
Farmers Form
The Biggest Poverty Group
 Income
From Copra is P900P1000 per hectare/month
 With
2 Hectare Ave. per
Family of six, Income per
month is P2,000
Source: Dr Justino Arboleda
Coco Sugar
Coco Water
Young coconut (Buko)
Coco Fiber
Others (sugar from shell)
92.78 percent increase in 2011 exports volume of coco sap
sugar with 70,000 kilograms (km) compared with 36,310 km
in 2010.
Tremendous leap of 224.20 percent increase in exports
volume from a low of 11,200 km in 2009 compared with
2010 figures.
“Exports was driven by global health concerns specifically
diabetes and obesity,” the PCA Administrator bared. The
World Health Organization (WHO), 2011 statistics revealed
that 346 million people are diabetic worldwide.
Coco sap sugar has a low glycemic index (GI) of 35 compared
to regular cane sugar, thus it can be recommended for
diabetics (FNRI, DOST).
Exported to 11 countries namely: Japan, USA, Middle East,
Korea, Hongkong, Norway, Canada, Switzerland, France,
Australia, and New Zealand. Among these countries, USA
ranked as the number one exporter (PCA).
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second biggest non-traditional export
USD1.445 million from sale of 1,450,129 liters.
United States was major destination controlling
969,164 liters or 66.8% of total business (PCA)
Said to be cost effective in bigger scale of
operation
Need to be processed immediately to avoid
spoilage
Coco husk as goldmine –
 Philippines produces 15 billion nuts a year,
meaning also 15 billion coconut husks.
 Only a very small portion of this is processed
into something of value. In fact the Philippines
exports only about 4,500 metric tons of coconut
coir a year.
 Kerala, India earns $600 million a year from
different products out of coconut husk.
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PCA
Largest Farm Waste
in the Philippines
8 Billion Husks are
burned or thrown
away
3 Billion Husks
Used as Fuel to
make Copra
Source: Dr Justino Arboleda
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a new kind of coconut sugar can be extracted from the
shell of mature coconut? It looks unimaginable but the fact
is that a P2-billion company has been set up at the DADC
Economic Zone in Sta. Cruz, Davao del Sur, to produce the
novel product.
The company is called CJ Toyota Tsu Sho Philippines, Inc.,
said to be a joint venture of Japan’s biggest car company
and a Korean partner. The company has a huge processing
facility that was inaugurated about a couple of months
ago.
The product is called Xylose coco sugar and is said to be
for export to Japan and Korea. The product comes in very
fine powder form that is immaculate white. It is very sweet
and is said to be used for the manufacture of toothpaste,
chewing gum and possibly other products that need
sweetener.
Source: Zac Sarian
Agri Plain talk
Coco sugar
backyard ( Armida Monghe)
commercial (Pasiolco Agri Ventures
Young coconut
Peter Paul Phils Corp
Coco Wonder
Coco Coir (husks)l
Armida Monghe
Coco Sugar Producer
Lopez, Quezon
Rosauro Monghe
Coco Wine (Tuba) Producer
Lopez, Quezon
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20 gallons of coco
wine per week
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sold at P180/gallon
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P3,600/week;P14,400
per month gross
income
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Coco Wine
2 gallons coconut sap = 1
kilo coco sugar
Sold at P250/kilo
(produce 4 times a week
P1,000/week; P4,000 per
month gross income
Coco sugar
Sap gathered in the evening
Sap gathered at 6 a.m.
P10, 000.00 annual rent for 65 coconut trees,
producing only wine before, now coco sugar is also produced.
Pascioclo Agri Ventures
Maureen Pasciolco , Owner
Tiaong, Quezon
Lopez
Limited market
Selling price P250/kilo
Production cost ???
Production trial & error
4-5 hrs cooking
What
Account for
differences
Market
Knowledge/In
fo
Technical
know how
Tiaong
there is market
selling price P280n -320/kilo
Production cost < 190/kilo
procedural- own /contract out
6hrs -10 hrs cooking
Ordinary plastic packaging
Packaging
no brand
Producer
Non Quezon
Producer/Wholesal
er
Organic, package
sizes local, export
specialized packaging
branded
Producer
Wholesaler
/Retailer
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initial investment of P1.42 million.
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annual net profit of P201, 762.48.
◦ Based on the projected 10-year income
statement and cash flow, before financing
◦ income is realized at first year of operation
◦ initial investment fully recovered in 3.64 years.
Source: PCAARRD
UGMA
URBAN Poor
Selling price
P12
20-25 (22,5)
No of Pcs
2,000
2,000
Revenue
P24,000
P 45,000
Cost buko
P 6-9 = 7.5
15,000
P 24,000
Hauling
transpo (elf – 7,000pcs)
Hauler.driver
8,500
850.00
Storage P1.00/nut
2,000
Concerns
High Reject - Improper selection of
young coconut - (training needed)
Appropriate tool
Storage
Short supply
(specially with
rejects)
High transpo cost
(maximize load/trip
URBAN
POOR
UGMA
Train harvesters
Collection
efficiency to
enusre timely
payment
Ensure
consistency of
delivery
Manage storage
concern to reduce
unnecessary
overheads
Ensure continous
supply
Target for just in
time delivery to
avoid shortages
and overstocking
Target transpo
cost efficiency
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Have buying stations with accredited farmer
supplier per station
Usually sourcing coconuts from Catanuan,
Calauag, Padre burgos, Bondoc Peninsula &
Lopez
Have one coop currently supplying the Co.
(could be a future possibility
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Private Enterprise Working with a group of small
farmers and local workers in the provinces.
built small Processing Facilities in Provinces of
Luzon, Visayas and Mindanao providing livelihood
to small farmers and local workers.
We implement sustainability-oriented on organic
farming, quality and farm productivity improvement.
Some percentage of sales are given back to the
farmers as incentives in form of organic fertilizer,
coconut and cacao seedlings in order them to plant
more and some are provided with monetary
incentives to promote continues organic farming
activity.
More of salaried employees (not cooperative)
Utilizing coco waste for fiber
Income from Labor:
P1.50 /coi about 20-30 pcs/day
P550 /10 meter net,
2 persons in a day
P275/person/day
Source: Juliet Escasa,
Hagakhakin Gumaca
Technology Available
Quality Standards
Oven Type Drier
(Copra)
Ohmic heating method
(coco water)
Coco Sap Sugar
Coco fiber
- produce white hygienic copra
P200,000 – 250,000 investment
250 kg/day capacity(C/o Coco wonder)
- pasteurization of Coco water
P2.3 million budget alloted in
2013 for laboratory scale
research on a pre-processing
method for coconut water to
minimize production loses due
to fermentation & mishandling.
- Hands- on Training offered
by Pasiolco Agri ventures
- Dr. Justino Arboleda of Bicol
offering technical assistance
Classification
Premium (superior
quality)
Specification
Cream to light yellow
Tolerance
5.0%
Moisture content is <4%
Class I (good quality) Light brown to brown
10.0%
Moisture content is not >4%
Class II
Includes the coconut sap sugar 10.0%
that did not qualify as Class I
and premium but satisfied the
minimum requirements of the
product standards
In terms of activities
In terms of coordination
& management
To improve on his current
segment as chain participant
 To add more activities and
move to other chain
segments
(if within their competencies)
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Vertical integration
Horizontal Integration
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To participate in decision
process
In setting norms and
standards
Through innovation
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Integration
of post-farm activities
2
4
CHAIN
Activity integrator
no
participation in
chain
Management
CHAIN
Participant
CHAIN
(CO-) OWNER
participation
in chain
mnagement
CHAIN
Partner
1
3
Specialization
in farm production
Source: Regoverning Market (with modification by NMM)
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Enhance quality
Add value and
Process products
no
participation
in chain
Management
Integration
of post-farm activities
CHAIN
Chain
co
(CO-) OWNER
owner
Chain activity
integrator
Chain
Participant
Cooperatrive business
Product development
Branding, marketing
participating
In chain
management
CHAIN
Chain
Partnerpartner
Know more about improving
Farming systems and quality
Of product (to have better
Chance at the market and
Specialization
Get better prices)
Farmer study groups
Specialized activity/
Knowledge & Negotiation
Skills get to influence
chain decisions
in farm production
NEXUS Agribusiness Solutions
Source: Regoverning Market
(with enhancements by Manalili)
Sample Action Plan: Redesign Option for Coconut
Objectives
Strategies
Entry Points
Identified
Market
SC Model
1.Chain
Optimization
Increase capacity to
comply with standards
to ensure quality
 Continuous farmers’
training
 Farmers’ Commitment
to adhere to good
agricultural Practices
Sustain farmers
education and
value formation
through NGOs
collaborative
assistance to
farmer groups
Modern
retailers (like
supermarkets
hypermarkets,
groceries,
specialty shops)
Coco Sugar
Pasiolco Agri
Ventures
Meet grade/certification
requirements (organic)
Quality
 of international
standards
Organic
Certification
Continuous
quality upgrading
Quality - userrecognized
Modern
Retailers
Coco Wonder
Pasiolco Agri
Ventures
2.Integral Chain
Care
3.Chain
Differentiation
Premium Positioning
New marketing concepts
E- commerce
Agency selling
Coco fiber
Dr. Arboleda
Export markets
Coco fiber
Dr. Arboleda
Coco wonder
Well
differentiated
Product/product
delivery system
International
Markets
Institutional
Markets
Coconut house
Ugma-Urban poor
model
Integration of Post Farm activities
• Chain
Activity
Integrator
• Chain coowner
Enhance quality
of copra
Add value
(sugar, sauce,
juice
Improve on
production
No participation
Farm mgt
Intercropping
• Chain
Participant
Cooperative
Branding
Innovative
marketing
(Buko Alliance
Farmer study
Group
active participant
Agham sa
Pagniniyog
• Chain
partner
Specializing in Farm production
Source: Regoverning Market (with enhancements by Manalili)
FGD Questions & Outputs
your Current
products (Major,
secondary?
How are they sold
Brought to market
Any other activities
(production, mktg)
That you wish to do
With your coconut?
What stops you from
Doing so?
Questions Asked
Other than current
How do you see
livelihood what other
your Community
initiatives do you
5 years from now?
need to further
(other issues)
improve on your
o small processing plant
situation
per barangay
o intercropping
o Village based mftng
• ginger, gabi,
oProduct enhancement • rambutann, lanzones oDomestically sold
new coco products
• Explore new methods oLivestock raising
-coco milk
- of Cooking copra
• Ruminants, goat,
- coco sauce
Copra
(standard coco drier • native pigs, chicken
(copra rejects)
PCA, DOST DTI)
Whole Nut
(ideas not materializing)
- nata de coco, jam
- processing coco milk
o stable selling of buko
centrifugal
oCoco Life
Farm gate
skillstodevt (identificatn)
- of trading (copra,buko, • coco levyhildren don’t want
- traders
•Product development
Go into farming, need to oAgham sa Pagniiniyog
- market
oCertify indiginous
-Sauce, Juice, sapal
Look
for
other
municipal --coconut virgin oil
Knowledge
Alternatives, or make
Lucena
-Ubod ( program planting Coconut farming viable oShellane like fuel prod
(Technical training)
oTraining & extension
needed
Current
Current with changes
SCENARIO BUILDING
Entirely new scenario
Manalili 2002
Concluding Insights
No existing marketing arrangements (beyond
the usual arms length buyer seller relationship
were observed in the coconut commodity chain,
given the selected cases studied.
though there are a number of promising buyer –
farmer supplier relationship if given proper
impetus for development, (brokering-in, guidance,
collective marketing, enabled environment