The agriculture unit of Hong Kong-based First Pacific Co. Ltd. said that it is moving forward with its planned investment for a palm oil plantation in the Philippines, but remained hesitant over other crops because of changing weather conditions.
Manuel Pangilinan, First Pacific managing director and chief executive, said that the company’s Indonesian unit, Indofood Agri Resources Ltd., has visited Davao Oriental for potential investment opportunities for palm oil.
“They are still assessing the areas that may be available for a palm oil plantation,” Pangilinan said, adding that the company expects to come with a result during the board meeting next week.
He said that the prospective area in Davao Oriental is around 30,000 hectares, or just about 10 percent of the area planted to palm oil by Indofood.
“It’s large in Philippine standards, but not in global standards,” he said.
In Indonesia, Indofood’s palm oil plantation is around 240,000 hectares, making it the third-largest palm oil company in the world.
Earlier, Pangilinan said that they were looking for a “sizable hectarage,” which can be developed into agricultural lands planted to palm oil, sugar, rubber, coffee and cacao.
Besides acquisition of palm oil areas, Pangilinan said that the company is looking at establishing a processing plant that would supply both local and export markets.
For bananas, he expressed apprehensions despite “attractive” prices for the commodity, saying that changing weather conditions may impact its investments.
“We’re looking at the banana industry because it’s attractive. The moment you enter in agriculture, it is a commodity business . . . there is no production differentiation because bananas are bananas and palm oil is palm oil,” he said.
“We are attracted to bananas as well because that is one crop to some degree has influence in the pricing, because we are one of the biggest exporters in the world so that is quite attractive for pricing consideration,” he added.
Pangilinan, however, said that the recent typhoons that hit the seaboard of Mindanao has caused major concerns for the company.
“We are concerned with the impact of weather change on the industry, because they [bananas]are quite fragile plants,” he said.
In December 2012, Mindanao was hit by Typhoon Pablo, which inflicted over P22.2-billion worth of damages to over 50,000 hectares of plantations.