Foreign investors cite the lack of a long-term plan as a hindrance to investing in the Philippine cocochemical sector.
Despite the growing appeal of the country to foreign partners as an investment site, Evelina Patiño, executive vice president of the United Coconut Chemicals Inc., said on Tuesday that the Philippine coconut industry may not likely be attractive to private business investments.
“Our foreign partners with advanced downstream technology [in cocochemical sector]are unwilling to invest in the country, because of absence of long-term plan for increasing coconut production,” she said.
Dean Lao Jr., president of Philippine Oleochemical Manufacturing Association, said that manufacturing in the country can still grow if there is focus given to the domestic coconut oleochemical industry.
“We cannot make everything, but we if can make four to five chemicals [in the cocochemicals industry]. . . then [the country will]be able to compete,” he said.
According to Patiño, the coconut sector “should focus on replanting hybrid copra” to raise the quality of coconut oils in the country.
Most of the country’s coconut production goes to exports, which take up 65 percent to 70 percent of the total produced coconuts, while the remaining is domestic consumption.
Behind Asean neighbors
The Philippine cocochemical sector also lags behind its neighboring countries, particularly Malaysia, Indonesia and Thailand.
The Department of Science and Technology-National Academy of Science and Technology (DOST-NAST) said also on Tuesday that the country’s cocochemical sector should raise its productivity by not only engaging in coco methyl ester and crude coconut oil production, but also in fatty acids processing.
Coco methyl ester and glycerin are chemicals derived from coconut oils undergoing the process of trans-esterification, which the country is doing now because of cheaper costs. Coco methyl esters and glycerin are mostly used in producing crude oils and bio-fuels for export to other countries to be converted to refined oils.
Fatty acids, on the other hand, are derived from coconut oils through hydrolysis that is an expensive process and requires investments.
Patiño also said that the country’s cocochemicals industry is behind its Southeast Asian neighbors since what is only produced in the Philippines are coco methyl esters.
“The Philippines has been into trans-esterification, due to biochemicals [campaign]. . . our future is more transerification-based,” said Lao, who is also the managing director of Chemrez Technologies and an official of the Philippine Oleochemical Manufacturing Association.
On the other hand, William Padolina, DOST-NAST president, said that the “highest value added we can get in coconut industry is the cocochemicals sector”—urging the country to focus on manufacturing of cocochemicals.
“Let us put our 90-percent effort on this. Wag na muna ’yung iba, ito na muna ang unahin [Let us focus on this rather than other products],” he said.
Lao said that the Philippines is also importing “raw coconut materials from Indonesia and Malaysia” despite having the largest coconut plantation in the world.
Some nine million metric tons (MT) of fatty acids are produced worldwide. The Philippines only contributes a mere 150,000 MT of fatty acids, while Malaysia and Indonesia supplies about 42 percent of the acids produced.