Government rubber firm eyeing production increase

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State-run ZNAC Rubber Estate Corp. (ZREC) is fertilizing a 500-hectare rubber plantation in Zamboanga to raise productivity by 40 percent to 60 percent.

For the first time in 15 years, ZREC President Allan Umali said that the company will restore fertilization activity in its sole rubber plantation in Tampilisan, Zamboanga, as the government aims to maximize revenue generation, which stood at P12.88 million in 2012.

“We started fertilization this year. That is the way to properly increase harvest and income for the government and for our farmer-partners,” Umali said, who is also Department of Agriculture assistant secretary for administration.

The government has a 70:30 revenue sharing commitment in the rubber farm. The 30 percent goes to Tampilisan farmers as an assured source of livelihood.


Umali also said that the government has sustained net earnings from ZREC even if the company stopped receiving Priority Development Assistance Fund (PDAF) support since 2011.

This is amid current inquiry by the Commission on Audit (COA) into ZREC’s alleged turnover of PDAF, or more commonly referred to as “pork barrel” to an allegedly nonexistent nongovernment organization (NGO).

“ZREC is self-sustaining. Its revenue even increased to P21 million in 2011 even if we withdrew from receiving PDAF since the new government took over. We’re complying with the recommendations of COA regarding its audit report,” he said.

Umali said the alleged turnover of ZREC’s PDAF fund to an NGO named Pangkabuhayan Foundation Inc. (PFI) occurred before his holding office at ZREC. The PDAF fund held by PFI, reported to be totaling P199.6 million, was identified to have come from the 2009-2010 PDAF of three senators.

Aldrin Mejares, ZREC plantation manager, said that fertilization should help reverse any ongoing weakness in the price of rubber in the market.

Average selling price of rubber by ZREC declined from P78 a kilo in 2011 to P49 a kilo from 2011 to 2012, according to Marianne Ebio, ZREC finance officer. This primarily caused a decline in the net income of ZREC from P21.332 million to P12.875 million in the period.

ZREC is further instituting reforms in operations in order to raise the quality of the rubber from Tampilisan. This should raise the company’s own rubber selling price.

“The poor quality of rubber at Tampilisan makes selling price lower. Wrong practices have rendered the products unclean, so prices dropped. Asec. [Assistant Secretary] Umali wanted us to be business-focused, so we’re working on improving production and rubber quality,” he said.

Selling price in Tampilisan decreased even if production of coagulated rubber increased to 184,089 kilos in 2012 from 131,287 kilos in 2011.

ZREC’s buyers of coagulated rubber are Standard Rubber Corp., DCL Rubber and NJ Rubber.

Among the reforms in cleaning up rubber operations is the use of formic acid, a cleaning and antibacterial agent, in rubber.

The use of battery solution makes the raw rubber product retain water, bringing down selling price, according to Mejares. Poor quality raw rubber makes finished products like tires become easily defective. Tires may become brittle, causing tires to explode easily.

ZREC is eventually implementing a system that will use ethril on rubber trees. Ethril is an antibiotic that has an effect of raising rubber latex production from trees. It is appropriately applied when the trees are up for slaughter. The ZREC trees are at the tailend of their productive life as these are now around 30 to 35 years old.

James Konstantin Galvez

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