Coconut farmers form coop to build processing plant in San Juan, Batangas
A group of coconut farmers in San Juan, Batangas has formed a cooperative to build a 91-million coconut processing plant under a public-private partnership model intended to turn out products for exports, increase their incomes, and replant seedlings to replace old coconut trees.
Proponents hope to enlists 3,500 farmers as coop members. So far about 300 have signed up.
The project is supported by the Philippine Coconut Authority (PCA) which has committed to donate a 30-million processing plant, according to Cristanto Gualberto II, General Manager of the San Juan Coconut Producers & Processing Cooperative (SJCPPC).
A memorandum of agreement was signed between the PCA and cooperative officials last August 27, 2015 at Megamall, Mandaluyong City during the Coconut Week Celebration.
The total project’s capital cost requirements are to be raised from equity of coconut farmers/coop members ( 23.15 million or 25.5 percent); PCA grant for processing plant ( 30 million or 30 percent); and loans and investments ( 37.67 million or 41 percent).
A number of non-government professional organizations has likely committed to lend management knowhow and expertise to make the plant’s operation successful. They are UPLB Prelude Alumni Volunteers Association, Asian Solidarity Council, Kasama Ka Organik Kooperativ, and Life Learning Organization of Peace Foundation.
Gualberto said the proposed processing facility is designed to process 20,000 nuts at two shifts a day, a volume that is less than 11.5 percent of the total coconut production of the town. It will have a daily output of 1,430 liters of virgin coconut oil (VCO) which will be exported to a committed buyer in Japan. This partner Japanese company reportedly has a standing offer to buy the plant’s 20 metric ton VCO output per month. At the same, the plant will have a processing by-products of include coco water, coconut shell paring cake and paring oil, and coco flour and coconut charcoal which have ready markets..
Thousands of coconut farmers who are coop members will immediately enjoy increased income once the processing plant comes into operation because the coop will buy dehusked coconuts a 7 per price, around 30-40 percent higher than the prices paid by private traders are present. Farmers will also be taught intercropping/multiple cropping as well as livestock raising to maximize their incomes. Farmers incomes are projected to increase by 3-4 times their present earnings.
He said that all stakeholders in the project (coconut farmers, copra processors, traders, exporters, service providers and end-users) will be horizontally integrated and their activities coordinated to improve the project’s competitiveness by ensuring efficiency.
Gualberto said the cooperative will enter into a service agreement with a professional management team (PMT) whose members come from the professionals helping the coop.
The cooperative will be run as a “social enterprise,” Gualberto, who has extensive business experience in managing coconut farm and running a VCO plant in Mindanao, has been endorsed by the farmers and barangay officials of San Juan as the social entrepreneur who will run the project as general manager.
Gualberto added that the project has a capacity building component which envisages the operation of a Life Community Center where members of the farm households can acquire useful knowledge and skills in participatory governance, social entrepreneurship, environmental conservation and management of change. The LCC will be instrumental in preparing young leaders from the household families to take over management of the project in the future.
Based on the feasibility study, the project revenues are estimated to increase from 72 million at 80 percent production capacity to 91 million at 100 capacity. On the other hand total costs will be at 34.36 million at 80 percent capacity and 42 million at 100 percent capacity. Projected net income will be 10.4 million at 80 percent capacity and 15.57 million at 100 percent capacity. Pay back period is placed at 3.6 years while break-even volume will be at 50 percent capacity.