A Dubai-based firm, which offered to finance the construction of silos costing $1 billion in major rice-producing areas in the country, said the postharvest facility will allow the Philippines to become an exporter of cereals.
B2Firms DMCC (B2Firms) CEO Marco Mattocia told the BusinessMirror that the country’s “very weak” postharvest facilities and good credit rating enticed his company to venture into the country’s farm sector.
Mattocia noted that the Philippines recently received a positive credit outlook upgrade received from Standard & Poor’s while affirming its credit rating of “BBB” for long term and “A-2” for short term.
“Our specialists are convinced that with this investment. The Philippines will move from importing cereals to exporting them in short term, with benefit for farmers, for labor employment and for the prices of the rice in the market” Mattocia told the BusinessMirror via e-mail.
“For these reasons we trust in the possibility that the Philippines is a solid country to make this project,” he added.
The National Food Authority (NFA) Council received last week B2Firm’s unsolicited bid to extend a loan of $1 billion to the Philippine government for the construction of postharvest facilities, including big grain silos.
Under its proposal, B2Firms will construct four grain silos capable of storing up to 60,000 metric tons of paddy in five major rice-producing areas, according to Agriculture Secretary Emmanuel F. Piñol.
“[The proposal] fits into the program of the NFA to focus more on local procurement and leave the importation to the private sector,” Piñol said in an interview with reporters last week.
Piñol said B2Firms’s proposal was referred to the NFA for technical review.
The NFA technical team will submit its recommendations to the NFA Council (NFAC), which will then review the proposal and the recommendations made by the food agency’s technical team.
“Personally, I like the idea,” Piñol said. “Because I feel this is where our grains industry is very weak in: postharvest facilities. The NFA is still using storing rice in dilapidated warehouses.”
“We are in the process of really modernizing our grains facilities from postharvest to storage and even up to marketing,” he added.
Piñol said the $1-billion loan from an Italian bank is payable in 10 years. He said B2Firms is part of an Italian conglomerate funded by the Italian government.
“It will be a turnkey project covered by a loan from an Italian bank. It’s a business opportunity for Italian companies,” he said in a separate SMS to the BusinessMirror.
“They will bring in the technology and build the project. It will be also the first major engagement in agriculture between Italy and the Philippines,” he added.