PHL weaves growth potentials of Manila hemp

In Photo: Shoes made from abaca and other indigenous fibers are displayed in a shopping mall in Manila. The Philippines is looking to further the growth potentials of abaca, known globally as “Manila hemp”, with the first-ever abaca-made unmanned aerial vehicle in the pipeline.

FROM producing high-quality textiles to the first-ever abaca-made unmanned aerial vehicle (UAV)—this is how the Philippines plans to stretch the potentials of abaca fiber.

According to former Philippine Fiber Development Authority (PhilFida) Executive Director Victor Prodigo, PhilFida is moving closer to this goal.

The development of an UAV, commonly known as “drone,” is nearing fruition, according to Prodigo, following successful meetings with three Philippine universities and the Department of Science and Technology (DOST).

“If the funds will be approved, then the universities—University of the Philippines Diliman, Ateneo de Manila and De La Sale University—in partnership with PhilFida and DOST-Pcaarrd [Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development] will create the first drone made of abaca,” Prodigo told the BusinessMirror.

“Abaca is lightweight and at the same time durable that can withstand severe hits, making it ideal [for the parts of a drone].”

Abaca fiber is three times stronger than cotton and two times stronger than sisal fibers, making it the strongest type of plant fiber.

Due to its ideal quality for manufacturing, abaca fibers are extensively used to produce ropes, woven fabrics, tea bags, currency paper, cigarette paper, diapers and bed sheets, among others.

Abaca grading, or the quality of abaca fiber, is determined based on the strength, cleaning, color, texture and length of the fiber.

In terms of cleaning, the standard graders for hand- and spindle-stripped abaca fibers are: S2, S3 (excellent quality); I, G, H (good quality); JK, M1 (fair quality); and Y, OT (residuals).

Prodigo said they are expecting to produce the first drone prototype before the year ends should the funding for the project be approved on or before June.

“We already have the available facilities,” the former PhilFida chief said. “The three universities will provide expertise in communication, engineering and design, while PhilFida will provide the laboratory and raw materials.”

Bank notes

PRODIGO also disclosed there are already ongoing talks between PhilFida, the Department of Agriculture (DA) and the Bangko Sentral ng Pilipinas (BSP) to produce banknotes locally using locally sourced abaca fiber and locally made security notes.

“The Central Bank is buying security papers from London, where our currency is also being made. So we had a preliminary meeting with the Central Bank to discuss the possibilities of buying security notes locally instead of importing,” Prodigo said. “That’s a good start as they want to prioritize Filipino-made products.”

Prodigo said the United Kingdom imports from the Philippines raw materials, such as abaca fiber and pulp, that are needed to manufacture security paper. After which the UK exports the security paper back to the Philippines to be used for the manufacturing of bank notes, Prodigo explained. The UK remains to be the top importer of local abaca fiber and pulp to date.

“So what they [BSP] want now is to produce the security paper locally,” Prodigo said. “There are no definite projects on how it would happen but they are willing to put up needed facilities or get investors who would produce the materials locally.”

Prodigo also said they are looking at the possibility of having the name “Manila hemp” patented. Globally, abaca fiber is known as Manila hemp as the Philippines accounts for at least 85 percent of global abaca production.

Road map 2017-2022

IN the Philippine Abaca Roadmap (PAR) 2017 to 2022, a copy of which was obtained by the BusinessMirror, the government noted that bankrolling various interventions aimed at hiking abaca output to 221,238 metric tons (MT) by 2022 would require a budget of P7 billion.

The government also intends to expand abaca plantations to 231,859 hectares from the current 181,859 hectares.

Under the road map, the PhilFida would expand abaca plantations by 17,000 hectares this year, by 10,000 hectares next year, 9,000 hectares in 2019 and another 9,000 hectares in 2020. The government is targeting to increase abaca plantations by 5,000 hectares in 2021.

PhilFida, an attached agency of the DA, is targeting to expand plantations in the Davao region by 13,000 hectares and by 8,530 hectares in Northern Mindanao. These additional plantations would be concentrated in lowland areas.

“In the past several years, our abaca supply has been insufficient, because developments were focused on the upland areas,” Prodigo said. “Yes, there’s a huge abaca hectarage in the upland, but supply or production is limited.”

He explained that “the limitations are caused by, first, cultural management—the farmers do not do much fertilization—and, second, they only harvest twice a year.”

According to Prodigo, farmers harvest around May and December, “because the abaca plantations are far from them, given that they live in the lowlands.”

The PAR noted that “planting from upland to lowland to convert unproductive and idle lands has gained support among farmers and the private sector.”

In five years the PhilFida is targeting to rehabilitate 50,000 hectares of abaca plantation: 800 hectares this year; 7,000 hectares in 2018; 10,000 hectares in 2019; 20,000 hectares in 2020; and 5,000 hectares in 2021.

The road map indicated that the rehabilitation and expansion of abaca plantations would increase output to 80,000 MT this year; 106,600 MT in 2018; 124,852 MT in 2019; 154,645 MT in 2020; 190,632 MT in 2021; and 221,238 MT in 2022.

The annual abaca output of the Philippines is pegged at 72,734.71 MT.

Interventions

UNDER the road map, the PhilFida would allocate P5.55 billion, or 80.38 percent, of its total budget for fiber production.

The PhilFida plans to set aside P910.906 million for its fiber-processing and utilization programs and P400 million for its research and development. The remaining P44.92 million would be used for fiber-trade development.

The PhilFida would also introduce an “intensive planting method,” which seeks to boost yield per hectare by shortening the growth period of harvestable abaca plant to 12 to 16 months from the typical 18 to 24 months.

The increase in output is expected to boost the country’s annual abaca-fiber exports by 10 percent to 15 percent annually starting this year until 2022, according to the road map.

Data from the PhilFida showed that last year’s abaca output of 72,734.71 MT was 8 percent higher than the 67,328.94 MT recorded in 2015.

The Bicol region remained as the top abaca-producing region in the country, accounting for 39 percent of the total output. Its production reached 26,685.1 MT last year, 14.1 percent higher than the 2015 record of 17,708.56 MT.

The bulk of the abaca produced by the Bicol region came from the province of Catanduanes, accounting for 88 percent of the total output. The province’s production in 2016 reached 25,167.06 MT, 6.9 percent higher than the 23,540.48-MT recorded output in 2015.

Abaca exports

DATA from the PhilFida also showed that export revenues from abaca in January to October 2016 reached $113.52 million, which is 17 percent higher than the $96.95 million recorded in the same period in 2015.

Abaca pulp accounted for the lion’s share of the earnings at 68.4 percent. Exports receipt from abaca pulp grew 18.4 percent to $78.50 million, from $66.30 million earned in 2015.

The UK and Germany were the top two importers of local abaca pulp during the 10-month period, accounting for 37 percent and 32.3 percent of purchases, respectively.

Abaca-pulp exports to the UK grew by 38 percent to 7,161.856 MT, from the 2015 record of 5,189.646 MT.

However, abaca-pulp exports to Germany declined during the 10-month period by almost a quarter, or around 19.2 percent, to 6,214.938 MT, from 7,695.483 MT recorded in 2015.

PhilFida data also showed that export receipts from abaca fiber in the January-to-October period expanded by more than a quarter, or 27.5 percent, to $21.071 million, from the year-ago level of $16.52 million.

The UK and Japan were the top two importers of local abaca fiber during the 10-month period, accounting for 48.3 percent and 37.1 percent of the total exports, respectively.

Shipments of local abaca fiber to the UK increased by 7.8 percent to 5,469.375 MT from 5,075 MT volume imported in the same time period in 2015. Meanwhile, Japan’s purchase of local abaca fiber declined 2.5 percent during the 10-month period from 4,304.5 MT in 2015 to 4,195 MT last year.

Despite the continuous increase in the revenues earned by the country from abaca exports, Prodigo said the Philippines is not meeting the whole demand for abaca by the global market.

“Although our abaca exports are continuously increasing, in reality we are not meeting the total global demand for it,” Prodigo told the BusinessMirror. “According to one of our consultants, there’s still a 50-percent global market share or demand that the Philippines can fill or supply.”

Cooperativism

FOR more than a decade now, Catanduanes remained the top abaca-producing province in the country.

Catanduanes’s output accounted for more than a quarter, or 32 percent, of the total abaca produced by the country last year.

And for Catanduanes-based Pinoy Lingap-Damayan Multipurpose Cooperative (PLDC), increasing the production of abaca fiber is a challenge they are willing to take.

“We were challenged and encouraged by [Agriculture Secretary Emmanuel] Piñol to increase our abaca production, because there’s a growing demand in the world market,” PLDC General Manager Antonio Jimenez Jr. told the BusinessMirror. “So in the part of PLDC, we will be venturing into abaca production.”

Jimenez said the PLDC plans to identify idle lands, “where there’s no agricultural production at all.”

“We might enter into a lease-contract agreement, then we will plant abaca in the identified areas.”

Jimenez added that the PLDC is looking at idle lands situated in the mountains, as most of the abaca production in Catanduanes bountifully thrives in the upland areas.

“Yes, it’s easier to grow abaca in the lowland areas rather than in the mountain side due to logistical concerns, but there’s no sufficient lowland areas here in Catanduanes as most of them are already planted with rice,” Jimenez explained. “Besides, there are a lot of idle mountain lands here that we can convert to productive abaca-producing areas. We are looking at planting at areas of the mountain near the roadside to ease logistical concerns and expenses.”

PLDC is a 12,000-strong cooperative, with 4,000 members being abaca farmers. The remaining members are rice farmers and government employees, among others, according to Jimenez.

Government support

THE Catanduanes-based PLDC is one of the beneficiaries of the DA’s Philippine Rural Development Project (PRDP).

Under the DA-PRDP, the PLDC was given P25.4 million worth of development assistance to raise the commercial value of abaca from P55 per kilogram to P75/kg, a feat the PLDC successfully achieved in October last year.

The components of PLDC’s P25.4-million enterprise project funded by PRDP include two warehouses to house the raw and semi-processed fibers, several trucks and forklift for delivery, tools and equipment, and working capital for operating expenses and cash for buying raw materials.

Citing PRDP’s timetable, Jimenez said they expect to receive the first tranche of the funding assistance by April this year. He said they expect construction of the warehouses completed by October.

Lessons learned

PRIOR to the DA-PRDP assistance, the PLDC had no experience in dealing with abaca trading, except for the fact that many of their members happened to be abaca farmers themselves.

“We really studied hard, especially because at first, we had difficultly learning the right pricing of abaca fiber, including the grading of the commodity depending on the quality,” Jimenez said.

Jimenez said before the PLDC ventured into abaca trading, the barangay-level abaca traders were the sole ones in power, controlling the farm-gate price of the province’s top agricultural product.

“When we ventured into abaca trading—given that the PRDP’s coverage is province-wide—we adopted the abaca pricing in Virac, Catanduanes,” Prodigo said. “Because the farmers in our locality didn’t have the capacity to go to Virac every week to sell their abaca fibers, they just resort to selling them to barangay-level traders.”

According to Jimenez, when the PLDC adopted the farmgate pricing in Virac for abaca fibers, barangay-level traders followed suit.

“They also increased their buying price of abaca fiber from the farmers,” he added.

PLDC plans

TO date, Jimenez said the farmgate price of raw abaca fiber in the province of Catanduanes has remained above the P70-per-kilogram mark, with barangay-level traders even offering higher buying prices today.

At present, PLDC’s buying price of abaca fiber is dependent on its quality. Jimenez said their buying price, for example, for S2-grade abaca fiber could reach as much P76 per kilogram.

PLDC buys raw abaca fiber which they process into specific grade requirements of their client-manufacturers. Jimenez said based on PLDC’s data, they are buying 25 MT to 35 MT of raw abaca fiber weekly.

Jimenez said the PLDC currently sells abaca fiber to Leyte-based Pulp Specialty Philippines Inc. (PSPI), which has an abaca manufacturing plant in Caraga, Albay. The PLDC also sells to Albay-based rope-manufacturer Pacific Cordage Corp.

Jimenez said they are now looking at their third abaca manufacturing client, the Las Piñas-based Pacific Continental Co. Inc., which buys S3-grade abaca fiber at P11.50 higher than the Catanduanes price of around P70/kg.

Image credits: Nonie Reyes

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