GOING BANANAS OVER 'SABA'  /  $500 M TO MOVE PETRON OUT OF PANDACAN

MANILA, APRIL 9, 2011 
(MALAYA BUSINESS INSIGHT) BY IRMA ISIP - Taking off from the success of a company in introducing to the world microwavable "saba" bananas, the government wants to expand and exploit the product’s potential to become a $12-million a year export business.

The Department of Trade and Industry (DTI), in a project brief, has identified microwavable banana as a flagship project to target more overseas Filipinos, attract P500 million of investments, expand the hectarage planted to the Cardaba variety by another 800 hectares by 400 farmer-entrepreneurs and provide 800 jobs.

Microwabable saba, introduced by Sagrex Foods Inc., was served as a snack to participants in trade and investment mission seminars in Saudi Arabia organized by DTI in 2005.

Sagrex, using quick-freeze technology from the Department of Science and Technology (DOST), developed new product lines in microwavable form such as spring rolls or turon and fries.

Soon, Sagrex was shipping out its first 20 metric tons of frozen banana products to Saudi Arabia.

The export has grown in volume and no less than 12 containers are sent monthly to the United States, Middle East, Canada and other Asian and institutional markets.

Under the integrated saba banana integrated program, the government hopes to provide sustainable livelihood to indigenous peoples, sugar workers and banana farmers, and expand and sustain the supply of microwavable bananas for the domestic and export markets.

According to the DTI, the prospect of Philippine bananas in the domestic and foreign markets is very promising.

The DTI project brief said a memorandum of agreement has been signed to formalize the cooperation among partners that include DTI, DOST, Department of Agriculture, Department of Labor and Employment, National Coalition of Indigenous Peoples, Land Bank of the Philippines, Development Bank of the Philippines and the private sector.

The DTI said capturing just 20 percent of the 12 million OFWs would translate to a demand of 6.6 million kilograms of microwavable bananas alone.

This potential market will require almost 800 hectares of new small plantations that can provide relatively good income and livelihood for 400 farmers with two hectares each. These 400 farmers will employ two helpers each for a livelihood for 800 people.

Planting the giant saba variety, which has double the yield of the traditional variety, can help increase harvest to an average of 60 tons per farmer.

This translates to annual sales of P360,000, which is more than four times the P75,000 revenue from the native/traditional variety.

To ensure a market, Sagrex will buy the farmers’ produce at P6 per kilo.

The program aims to further increase the yield to 35 tons per hectare per year.

This means Sagrex will have to increase its capacity eight times, from 500 kilos per hour to 4,000.

The DTI said compared with the Cavendish variety, which is grown in plantation scale in Mindanao, the Cardaba is grown by small/backyard farmers.

"The problem in the Cardaba banana sector is the low volume of supply which forces the prices up. With the increasing demand for raw material in banana chips and the local requirement for banana cue, there is a need to encourage increased production in order to sustain competitiveness in the export of chips and provide for the development of new product lines such as the microwavable banana, the DTI said.

Petron to spend $500M to move out of Pandacan BY JOHN LOURENZE POQUIZ

Petron Corp., the country’s largest oil refiner and distributor, is set to spend at least $500 million to relocate its main storage facility out of the Manila’s Pandacan district, Petron chairman and chief executive Ramon Ang said.

Ang said San Miguel Corp., majority owner of Petron, will finance the relocation.

He said the company intends to finish the relocation of the storage facilities in two to three years.

In December last year, Petron told the Supreme Court, which is hearing a case on the Manila city government’s decision to eventually close down the Pandacan facility, that it no longer intends to keep the old depot because of "economic and business" considerations.

"Paalis na kami talaga. Nag-file kami sa Supreme Court last year to say that we are moving out of Pandacan within our promised five-year period," And said.

Ang said that transferring to a facility with a bigger port, Petron could cut its transport costs by leasing larger oil tankers.

"Kasi yung barko na naghahatid sa Pandacan, kailangan 1,000 tons lang, maliliit lang. Mababaw kasi ang Pasig river. So bago naming lilipatan, 20,000 tons na," he said.

Last year, Ang said that SMC bought a stake in Harbour Center, the new North Harbor operator.

"We did not invest to join them in their pier operation. We invested since we saw the opportunity to locate the depot in Pandacan to North Harbor as well as a grain terminal for Purefoods," Ang said.

In March 2009, the Supreme Court ordered Manila’s local government to remove the oil depots from Pandacan. It mandated strict enforcement of Ordinance 8027 declaring Pandacan as a commercial and not an industrial zone.

In May the same year, Manila Mayor Alfredo Lim signed Ordinance 7177, which created zones for medium and heavy industries. In effect, it repealed Ordinance 8027 and superseded the Supreme Court order, thus allowing the oil depots to continue operations in Pandacan.


Chief News Editor: Sol Jose Vanzi

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