Because of difficulty in securing commercial-scale agricultural lands in the Philippines, hybrid rice producer SL Agritech Corp. (SLAC) over the weekend said that it may shift its planned joint venture with the Manny Pangilinan-led First Pacific Co. Ltd. to Indonesia.
Henry Lim Bon Liong, SLAC president and chief executive officer, said that the company is now scouting for rice plantations in Indonesia that would meet the land requirement of the Pangilinan group.
“Right now, our direction is toward Indonesia because to be honest, we are having a hard time looking for land in the Philippines. Originally, the plan was to acquire 3,000 hectares of land in Iloilo, but the group of Manny Pangilinan wants to secure more than that,” Lim told reporters.
“However, this is still preliminary, we are still open for more negotiations,” he added.
At present, Lim said a joint study is being done on rice production with SL Agritech as a seed supplier.
“We should be proud that a Filipino firm is trying to expand in other nations,” he added.
Pangilinan, First Pacific managing director, said in a chance interview that his group is confronted with land availability problems.
“We’re sorting out the land issue because it’s not clear to us what sort of approvals we need to implement on the project. Until we find that out, that’s the only way that we can proceed with a detailed feasibility study,” he said.
Earlier, First Pacific was eyeing around 30,000 hectares of agricultural land in Davao Oriental for palm oil production and processing.
“If the numbers work, that’s the time that we can proceed with the detailed feasibility study,” he said.
SLAC—whose products include hybrid rice seeds, rice products, insecticides and fertilizers—is banking on its partnership with Hong Kong-based First Pacific to boost the business, as the hybrid rice developer gears up for the revival of its initial public offering (IPO).
Incorporated in 2000, Lim said the SLAC continues to entertain investors but wants to grow internally before it plans to conduct an IPO.
“At time, I don’t think it’s prudent to do an IPO right now. We have investors coming in also so we want to grow internally before we do the IPO,” he said.
In the meantime, Lim said that the company is ironing out an agreement with international supermarket chain Carrefour for the distribution of it Doña Maria premium rice varieties Jasponica and Miponica varieties in the Middle East.
“We will only have to change the packaging [of the products]. They need a large volume but we will start with around 60 tons per month,” he said.
Lim added that he expects the deal to be finalized by September, adding that among the export destinations in the Middle East will include Dubai, Qatar and Saudi Arabia.
At present, SLAC ships hybrid rice seeds to Indonesia, Bangladesh and Myanmar. The seeds are cultivated in those countries to produce rice seeds to be sold to farmers.
The firm is considering export of seeds to Nigeria and is planning to expand its operations in Indonesia, Bangladesh, Myanmar and Vietnam.
SL Agritech is a subsidiary of the Sterling Paper Group of Companies. It was formed in 1998 to perform research work on hybrid rice.