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By Ira Karen Apanay, Senior Reporter
A Filipino company that provides livelihood for
3,000 farmers and competes with China for the supply of tomato paste
to multinational fast-food restaurants is in danger of losing its
edge—or even closing.
Northern Foods Corp. (NFC) is financially
strapped, its chairman, Bernardo “Jojo” Mitra, told The Manila
Times, adding that the company has put in a request for P190 million
in November 2007 with the Agricultural Competitiveness Enhancement
Fund (ACEF).
“We need a new plant,” said Mitra, also the
administrator and chief executive officer of Livelihood Corp. (Livecor).
“Our plant is so old. We cannot compete with importers from
China.”
The 25-year-old tomato paste processing plant
needs to be replaced with a new and globally competitive facility to
be able to compete with foreign importers of tomato paste,
particularly those from China, Mitra explained.
Northern Foods has had to make do for some time
now, he told The Times. Present management was able to arrest
declining sales from 2003 to 2005, and sales increased in 2007 to
P154 million, the highest in the history of Northern Foods, he said.
The Agricultural Competitiveness Enhancement
Fund has a P6.6-billion fund and is appropriated to support local
agricultural sectors harmfully affected by importation. It finances
agricultural researches, study grants and scholarships, and advanced
post-harvest equipment.
Northern Foods now supplies tomato paste to 37
companies, including Jollibee, McDonald’s, KFC and Mister Donut
for the fast-food restaurants, and Unilever, Del Monte
(Philippines), Nestlé Phils. Inc., Heinz (of UFC Phils. Inc.), San
Miguel Foods Corp./Purefoods Poultry, Purefoods (of Hormel),
Hunt’s (of Universal Robina Corp.), Monde Nissin, for sauce and
ketchup manufacturers.
“Sales for the calendar year 2007 is expected
to reach 3,816 metric tons or an increase of 19.36 percent from
previous year,” according to documents supplied to The Times.
Northern Foods has a 10-percent surplus production from the targeted
3,000 metric tons for 2007, the records also say.
“Average selling price for each calendar year
[2006 and 2007] was also able to increase by present management by
16 percent from year 2005 as a result of strategic marketing,” the
market performance report also said.
Mitra took over Northern Foods Corp. in 2001
when it was “losing heavily.” The company is owned by the
Livecor and by virtue of Executive Order 223, is now an attached
agency of the Department of Agriculture.
Northern Foods manufactures tomato paste and
sources out its raw materials from 3,000 Ilocano farmers who
annually enter into a contract-growing agreement with the company.
The company’s processing plant, located at
Barangay San Joaquin, Sarrat, Ilocos Norte, was designed,
manufactured and installed by the Franrica Manufacturing Corp., an
American company. Northern Foods has a capacity of 500 tons of fresh
fruits a day and produces an average of 4,500 metric tons of tomato
paste every processing season.
Mitra said Northern Foods supplies 25 percent of
the 15,000 metric tons of tomato paste consumed in the Philippines
every year. Before the company started, the country imported all its
tomato paste from several countries, including Taiwan and the United
States.
DA wants locals to take over
Agriculture Secretary Arthur Yap said he wants
the local government of Ilocos Norte to take over Northern Foods,
although, he still have to discuss the matter with officials there.
When asked about the 3,000 contract growers that
may eventually lose their source of income if the plant closed down,
Yap said that is the reason why he wants to talk with local
officials.
Ilocos farmers plant an average of 850 hectares
of tomatoes, which they harvest from mid-January to mid-May and sold
exclusively to Northern Foods.
Yap added that the tomato-paste company is
losing badly, and he wants the Agriculture department to move out of
that business.
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