Oriental Mindoro VCO VCA With NOL PDF

Value
Chain Analysis for

Virgin Coconut Oil (VCO)

covering the Province of Oriental Mindoro

Province of Oriental Mindoro
Philippine Rural Development Project
Table of Contents

Page
No.
EXECUTIVE SUMMARY 1
SECTION 1 – INTRODUCTION 3
A. Background Information and Objectives 3
B. Objectives of the VCA 4
C. Methodology 5
SECTION 2 – OVERVIEW OF THE INDUSTRY 6
A. Product Description 6
B. Production Trends 12
SECTION 3 – NATURE AND SCOPE OF THE INDUSTRY 20
A. Value Chain Mapping 20
B. Key Players and Functions 22
C. Nature of Inter-firm Relationships 24
D. Price and Cost Structure 26
SECTION 4 – MARKETS AND MARKET OPPORTUNITIES 33
A. Markets and Market Trends 33
SECTION 5 – SUPPORT SERVICES 41
A. Financial Services 41
B. Non-Financial Services 41
SECTION 6 – ENABLING ENVIRONMENT 43
A. Formal Rules, Regulations and Policies 43
SECTION 7 – CONSTRAINTS AND OPPORTUNITIES 46
SECTION 8 – COMPETITIVENESS DIRECTIONS 49
SECTION 9 – CONCLUSION AND RECOMMENDATIONS 50
ANNEX 51

ii

List of Tables
TABLE DESCRIPTION Page
NO. No.
1 Production Performance of Top 5 Coconut Producing Countries, 2010- 13
2014
2 Volume of Production by Region, Philippines, 2010-2014 14
3 Volume of Coconut Production with Husk and Average Growth Rate by 16
Geolocation, 2010-2014
4 Volume of Production (MT) by Municipality, Oriental Mindoro, 2010- 17
2014
5 Wholenut Production and Estimated Volume of VCO Production by 19
Municipality, Oriental Mindoro, 2014
6 Snapshot of Relationship Assessment 25
7 Cost and Return per Hectare of a Coconut Farm, 2014 26
8 Cost and Return per Month of a Coconut Consolidator, 2014 27
9 Cost and Return Analysis for Fresh-Wet Process for One Month 28
10 Cost and Return Analysis for Fresh-Dry Method for One Month 28
11 Analysis of Processes Used in Oriental Mindoro 29
12 Relative Financial Position of Players in Fresh-Wet Process 31
13 Relative Financial Position of Players in Fresh-Dry Process 31
14 Virgin Coconut Oil and volume of exports in MT by country, 2008-2014 33
15 VCO Volume Requirement of International Market, 2013 35
16 Monthly capacity, average yearly production and supply share by VCO 36
processors in Oriental Mindoro, 2014
17 Chemical and Fatty Acid Composition of Virgin Coconut Oil 37
18 Some Existing Providers and their Services, Oriental Mindoro 41
19 Non-financial Services Provided by Institution to Coconut Industry 41
20 Subject and Coverage of Formal Rules, Regulations and Policies 43
21 Summary of Priority Constraints/Opportunities and Interventions 46

iii

List of Figures
Figure DESCRIPTION Page
No. No.

1 The Virgin Coconut Oil 6
2 VCO processing Technologies in Oriental Mindoro 11
3 National Coconut Production, Philippines, 2010 – 2014 14
4 Coconut Production Share by Province, MIMAROPA, 2014 15
5 Oriental Mindoro Coconut Production (wholenuts), 2010 - 2014 16
6 Area Planted to Coconut by Municipality, Oriental Mindoro, 2014 18
7 Value Chain Map for VCO, Oriental Mindoro 21
8 VCOs produced in Oriental Mindoro 24
9 Revenue, Cost and Profit Ratio for One Liter VCO from Production to 29
Processing (Medium Category Processor)
Processing – Micro Processor (Cooperative)
Processing (Grower – Micro Processor)
12 Export Volume and Value Chain of VCO in the Philippines, 2001– 34
2013
13 Philippine VCO exports by Destination, 2013 34
14 Non-traditional exports of the Philippines, 2010-2012 36
15 Visualization of Geographic Flow of VCO in Oriental Mindoro 40
16 Synthesis of Competitive Vision 49

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EXECUTIVE SUMMARY

The world demands for healthful, organically grown farm produce. Virgin Coconut Oil’s
(VCO) global demand is huge due to the increasing cost of health care, aging population,
growing evidence of health benefits in food ingredients, among others but the countries
suitable for coconut production to produce VCO are limited. It is in this aspect that the
Philippines should capitalize and have focus so that coconut productivity and profitability
programs be instituted that could bring impact on the lives of the majority small coconut
farmers.

For the VCO export, although the Philippines is the second largest coconut producing
country of the world, the country has only exported 1.8 MT of VCO valued at
US$19,810.00 in year 2001. An exponential growth of its export was recorded in 2013, as
it grew with a total export volume of 7,061 MT worth US$2.461M. Major export
destinations of VCO include United States of America (USA), Canada, Germany, Lithuania,
United Kingdom, New Zealand, Australia, Russia, Finland, and Turkey. USA and European
countries remain the top markets of VCO due to the demand for products made from
natural ingredients.

Oriental Mindoro is presently producing 178,045 liters of VCO per month through its four
processors, namely: All Coconut Organics Company Limited in Gloria, a medium category
processor, Bigaan Agrarian Reform Community Organization (BARCO) in San Teodoro,
Calima Socio-Economic Multi-Purpose Cooperative (CASEMPCO) in Pola and Victoria’s
Virgin Coconut Oil in Victoria, all three being micro category processors.

The value chain of virgin coconut oil in a medium category processor starts from coconut
production as source of primary inputs for VCO processing, sourcing of matured nuts
which are supplied by accredited consolidator/traders and sourced from identified
coconut growers to medium scale VCO processing. Two cooperatives formed another
value chain whose coconut grower-members are the main source of their raw materials
for VCO processing. Another value chain is exemplified by a coconut grower turned VCO
processor who raised her own coconuts, process it into VCO and sell it in the local market.
Accredited nurseries, agricultural stores and financial institutions provide inputs to
coconut farmers. Consolidator/traders pick up and deliver the matured coconuts to one
VCO processor while some coconut farmers directly deliver matured coconuts to two
cooperative processors. Their produced VCO are marketed within the province and even
to other provinces and countries like Japan and the United States of America.

Some major/critical constraints in the commodity value chain identified are outdated
machineries, low product quality of some VCO producers, poor road condition in some
coconut producing areas and inefficient marketing of product. These can be addressed
through the provision and upgrading of machineries/equipment, conduct of Good
Manufacturing Practices (GMP) trainings, construction of farm-to-market roads and
establishment of marketing database, conduct of market matching and product
promotion.

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With the synergized relationship between and among various players in the value chain,
the province of Oriental Mindoro can become MIMAROPA’s center of coconut production
and agro-industrialization.

2

SECTION 1: INTRODUCTION

Background Information and Objectives

The Philippine Rural Development Project (PRDP) is a six-year flagship project of the
Department of Agriculture (DA). It is designed to establish the government platform for
an inclusive, modern, climate-resilient, market-oriented, and value-chain oriented
agriculture and fisheries sector.

Externally, it will focus on expanding market access and improving competitiveness.
Internally, it will introduce reforms in operating the DA bureaucracy.

In order to support these development objectives, specific objectives below were
enumerated, as follows:

§ At least, 5% increase in annual real household incomes of farmer beneficiaries;
§ 30% increase in income for targeted beneficiaries of enterprise development
§ 7% increase in value of annual marketed output
§ 20% increase in number of farmers and fishers with improved access to DA
services

To facilitate the achievement of the above- mentioned objectives, PRDP will be sustained
by four main components, namely:

§ I-PLAN: Investment for Agriculture and Fisheries Modernization Program (AFMP)
Planning at the Local and National levels
§ I-BUILD: Intensified Building-Up of Infrastructure and Logistics for Development
§ I-REAP: Investments for Rural Enterprises and Agricultural and Fisheries
Productivity
§ I-SUPPORT: Implementation Support to PRDP

Under the I-PLAN Component, the AFMP planning will be enhanced through science-
based tools which include Value Chain, Vulnerability and Suitability Assessment (VSA),
Participatory Resource Appraisal (PRA), and Climate Change Adaptation (CCA).

The component also intends to harmonize the Provincial Commodity Investment Plan
(PCIP) with the regional AFMPs that consist of the annual planning and budget system.
Thus, the positive output of this study is required.

Results of these studies will serve as basis for the other PRDP components (I-BUILD and
I-REAP) in the establishment of strategic and climate-resilient infrastructure facilities,
creation of marketable surplus commodities and installation of market and production
support facilities, among others. Such programs will bring about increase in the number
of smallholder groups operating in viable enterprises, enhanced producer productivity
and strengthened resiliency to climate change and adverse weather conditions.

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More importantly, PRDP will also partner with the Local Government Units (LGUs) and
the private sector in providing key infrastructure, facilities, technology, and information
that will raise incomes, productivity, and competitiveness in the countryside.

MIMAROPA, also known as Region IV-B, is a region of the Philippines located in Luzon. It
is among the sixteen (16) regions where PRDP will be implemented. Based on the
Philippine Statistics Authority (PSA) data, the region is the 5th producer of coconut in the
Philippines, accounting for 3.57% (growth rate) of the total national produce from 2013
-2014 (PSA, 2015).

Oriental Mindoro, one of the five MIMAROPA provinces, ranks 2nd to Palawan in total
coconut production in the region per 2014 Philippine Coconut Authority (PCA) record.

Coconut was selected from among the Regional Agriculture and Fishery Modernization
Plan’s (AFMP) list of commodities for MIMAROPA as a priority commodity of the Province
of Oriental Mindoro for PRDP.

The province utilized the predefined criteria in assessing the coconut’s suitability, market
potential, its impact on the poor and number of coconut growers/producers.

The Value Chain Analysis for Virgin Coconut Oil considered all the factors affecting the
ability of coconut farmers to access markets profitably, resulting from the interventions
in the value chain. Conducting such was particularly vital in upgrading existing chains
and identifying market opportunities for farmers and other stakeholders.

Objectives of VCA

The objectives of the Value Chain Analysis (VCA) are listed below:

1. Understand end-market opportunities that can spur inclusive growth;
2. Identify key constraints to end-market opportunities;
3. Describe the market chain, the various actors, their functions, and nature of
inter-firm relations;
4. Formulate interventions to address key constraints and opportunities;
5. Identify investment opportunities that will be the basis of the Provincial
Commodity Investment Plan; and
6. Promote collaboration between the national and local governments and the
private sector.

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Methodology

The Virgin Coconut Oil Value Chain Analysis is a combination of primary and secondary
data gathering, Value Chain mapping, analysis of opportunities and constraints and
discussion of findings and recommended interventions with industry stakeholders.

Primary data gathering involved conduct of key informant interviews and focused group
discussion among four Coconut Growers, three Traders/Coconut Growers, four
Processors and Provincial PCA Manager.

The survey questionnaire used consisted of seven (7) parts: basic information, inputs,
production and employment, income and costs, buyers, support markets and enabling
environment.

Secondary data gathering came from various sources namely:

§ Philippine Statistics Authority
§ Philippine Coconut Authority
§ Plant Quarantine Service
§ Department of Agriculture
§ Department of Trade and Industry
§ Local Government of Oriental Mindoro

In coming up with the proposed interventions for the Value Chain for Virgin Coconut Oil
of Oriental Mindoro, primary and secondary data gathering, Value Chain mapping,
analysis of opportunities and constraints and discussion of findings and recommended
interventions with industry stakeholders proved to be necessary in order to identify
proposed interventions.

Through these processes, critical issues, risks and complications are clearly identified.
This is vital in the formulation of action plans and identification of activities and outputs
to be delivered. More importantly, this procedure is useful in determining key
organizations that will play an active part in the implementation of the proposed
interventions.

The limitations of the study are the following:

§ Apprehension of some value chain players in disclosing relevant information
(trading capacity of traders and production capacity of processors)
§ Only those processing technologies utilized by local VCO processors are described

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SECTION 2: OVERVIEW OF THE INDUSTRY

Product Description (Virgin Coconut Oil)

Coconut oil is certainly not an unfamiliar name,
but virgin coconut oil might be. Unlike what
many might assume, it is not simply another
name given to the ordinary coconut oil by some
company just to increase sales numbers by
claiming that it is the purest available form.

There is really a substance called virgin coconut
oil and, if not entirely, it has some important
differences from ordinary coconut oil. These
differences mainly lie with the source (more
specifically, the physical form of the source), the
method of extraction, and its subsequent
benefits. Virgin coconut oil is rapidly gaining in
popularity throughout the world in comparison
to ordinary coconut oil, and it is not without
good reason (Figure 1).

Figure 1. The Virgin Coconut Oil

Differences Between Virgin Coconut Oil and Ordinary Coconut Oil

Extraction

The main difference between ordinary coconut oil and virgin coconut oil lies in their
processes of extraction. While the former is extracted by cold compression or cold milling
of copra (another name for dried Coconut kernels) with a moisture content of around six
percent, the latter is extracted from the coconut milk obtained from fresh coconuts.
Thereafter, using processes such as fermentation, churning (centrifugal separation),
refrigeration, and the action of enzymes, the oil is separated from the water or moisture.
In some cases, this fresh coconut oil is boiled to obtain the oil by evaporating the water
or moisture.

However, in the case of virgin coconut oil, the raw materials and the process of extraction
should not allow any involvement of heat. Therefore, in good and reputable firms that
manufacture virgin coconut oil, throughout the whole process, the utmost care is taken
to ensure that the kernels and the raw material, i.e. the coconut milk, are not subjected to
heat or sunlight. In some cases, virgin coconut oil is also extracted directly by cold
compression of fresh dried coconut meat. This is also called micro-expelling.

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Appearance

Virgin coconut oil looks slightly different from ordinary coconut oil and this
differentiation cannot be made with the naked eye. This difference is mainly due to the
presence of certain colloidal and other particles and moisture within it. On the other hand,
ordinary oil is refined and is mainly left with the fatty acids in it and almost nothing else.
Ideally, virgin coconut oil should be as clear as water. However, its color may vary slightly
depending upon its processing.

Virtues

Virgin coconut oil has a very good taste and smell, like that of fresh coconuts, since it is
derived from fresh coconuts and is subjected to very low, if not totally nil, heat and
sunlight. It is also not refined. This preserves all the natural goodness of this oil, including
a high content of Vitamin E and minerals, which are otherwise almost completely robbed
from ordinary coconut oil during processes like heating, filtration, refining, and
bleaching, which are done to make it colorless and odorless. Furthermore, virgin coconut
oil is very effective as a moisturizing agent. Its antioxidant properties are far better than
those of normal coconut oil.

Composition

The two products do not differ much in composition, except for the fact that a few good
things, such as some polyphenols, vitamins, and minerals that contribute to the taste,
fragrance, and goodness of coconut oil are found more in virgin coconut oil than the its
ordinary counterpart. Furthermore, it is richer is medium chain fatty acids, good
cholesterol, and has almost no trans fatty acids.

Virgin Coconut Oil is oil obtained from the fresh, mature kernel of coconut by mechanical
or natural means, with or without the use of heat, without undergoing chemical refining,
bleaching or deodorizing and which does not lead to the alteration of the nature of the
oil. VCO is an oil which is suitable for consumption without the need for further
processing (PNS/ BAFPS 22:2004).

Health Benefits of Virgin Coconut Oil (cold pressed):

Virgin coconut oil is nature’s richest source of lauric acid which protects your heart by
reducing total cholesterol and increasing good cholesterol, has a small amount of
vitamins and minerals and choline is one of the most abundant nutrients (0.3 mg per 100
g of oil). It also contains vitamin E (0.9 mg per 100 g of oil) and vitamin K (0.5 mcg per
100 g of oil). Both vitamins are important for cardiovascular health and contains a small
amount of iron (0.04 mg per 100 g of oil). Below are specific benefits that can be derived
from VCO.

1. Thyroid-stimulating: Research shows that coconut oil contains a medium-chain fatty
acids accelerate that stimulates metabolism, gives you more energy.

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2. Get candida in check: Coconut oil has a good quantity of caprylic acid in it which is
well known to kill off excess candida by targeting harmful bacteria.

3. Lowers cholesterol: It is rich in lauric acid which protects your heart by reducing total
cholesterol and increasing good cholesterol.

4. Helps with weight loss: Here is an interesting fact about coconut oil; even though it is
a fat, it actually helps with weight loss. The healthy medium chain fatty acids do not
circulate in the bloodstream like other fats; they are sent directly to the liver and are
converted into energy. Thus the body does not store the fat in coconut oil as fat; it uses it
to produce energy instead.

5. Helps keep diabetes in check: It does not produce an insulin spike in your
bloodstream. Instead it helps control blood sugar by improving the secretion of insulin.
Note: This is not a free pass to eat a lot of sugar and other dumb carbs.

6. Reduces heart disease: studies on people in the Pacific Islands found that their total
caloric intake included thirty to sixty percent from fully saturated coconut oil. These
Pacific Islanders have nearly non-existent rates of cardiovascular disease.

7. Gastrointestinal malabsorption diseases: Combining Vitamin E supplements with
coconut oil through the skin proved to be a good alternative for those with
gastrointestinal malabsorption diseases. Study in Canada 1999 University of Western
Ontario.

8. Supports the immune system: It is rich in lauric acid, a nutrient that supports the
body’s immune system.

9. Good for the skin: When applied externally it forms a protective antibacterial layer
protecting the infected body part. Also, coconut oil speeds up the healing process of
bruises by helping to repair damaged tissue.

10. Nourishing for the brain: Studies show that it improves cognitive function, and
stalls, or even reverses, neurodegenerative diseases in their early stages.

11. Ancient medicine: Coconut oil has been part of Ayurvedic medicine for 5,000 years
in India.

12. Speeds Recovery: People in Panama drink a glass of coconut oil to protect
themselves from illness as it is also believed to speed recovery from sickness.
http://www.care2.com/greenliving/the-amazing-health-benefits-of-virgin-coconut-oil.html

General Uses of Virgin Coconut Oil

People primarily buy VCO as a food supplement or for nutraceutical purposes because
VCO is believed to contain health-giving additives and have medicinal benefits. VCO’s
growing number of beneficial effects on human health is supported by medical literature.

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1. For cosmetics and skin care products – Virgin Coconut Oil is a common
ingredient in cosmetics and skin care products since VCO promotes health of skin
and hair as well as anti-oxidant.

2. For general health and wellness - VCO promotes weight loss and increase of
metabolism. Most of the studies claim that VCO is essential in losing weight, faster
and easier by taking one spoonful in morning and late afternoon before meal. A
study revealed also that VCO increases and boosts metabolism that keeps the
weight off. VCO also improves and prevents various digestive-related ailments due
to its content saturated fats that help control parasites and fungi that cause
indigestion and other digestion-related problems. Other benefits of VCO are as
follows: reduce stress, maintains energy, supports the body’s immune system and
used as dietary supplements.

3. For food consumption – For diet-conscious, instead of using vegetable oil, butter
or margarine, VCO is used as good alternative. VCO is used in baking, preparing
pasta and salad paired with olive oil, frying and even in smoothies and juices.

4. For pharmaceutical and medicinal uses – Virgin Coconut Oil is pondered as
functional food because of its numerous health benefits such as: it maintains the
LDL and HDL cholesterol level, it keeps diabetes, reduces the risk of heart disease,
gastrointestinal malabsorption disease, improves cognitive functions, boost
thyroid function to increase energy, prevents Dementia and Alzheimer disease.

Downstream Products from Virgin Coconut Oil

Profitability in VCO production can be enhanced by processing some of the VCO into
downstream products such as hand-made bath soaps (ordinary and herbal), massage oils,
moisturizing body oil, body butter and other skin care products, and hair conditioner.
This was demonstrated in the Philippines, where small scale producers of VCO survived
the competition with big processing plants by going into VCO-based downstream
products. The VCO industry in the Philippines started with farmer producers linked to
traders/exporters and with small producers. However, when the world demand for the
product became bigger, big manufacturers of coconut milk and desiccated coconut added
VCO to their product lines. These plants, which have been in the coconut manufacturing
business for decades, hold all quality certifications (ISO, HACCP etc.) with some also
having organic certification. Hence, the majority of small scale producers, who were
producing only VCO, had to cease operations because institutional buyers preferred the
VCO produced by the larger, better accredited companies. The profitability of the VCO
operation is, therefore, dependent on maintaining the goodwill of the companies that buy
it.

1. Moisturizing toilet/bath soap

Soap is a household necessity, assuring manufacturers of a ready market. There are now
several home- scale producers of VCO in the Philippines like in Marinduque and some
other parts of the world who use this method. A VCO-producer cooperative in
9

Marinduque produces VCO-based bath soaps by infusion with aromatic flowers like Ilang-
ilang, rose, and other aromatic herbs. In Papua New Guinea, some trainee are producing
VCO and converting it into soap. It was reported that miners in Papua New Guinea prefer
the VCO-based soap that he produces because it lathers and cleans well, even in hard
water. Another trainee in the Marshall Islands has, since 2006, been producing VCO and
converting some of it into a fragrant body oil by infusion with aromatic leaves. In Fiji, a
trainee from Vanua Levu is producing VCO which she converts into herbal soaps for
tourist shops. There is now an association of small-scale VCO producers using the
modified natural fermentation method in Fiji.

2. Aromatherapy/massage oils

Aromatherapy is the general term used for the application of essential oils from aromatic
plants, shrubs and trees for the treatment of both medical and psychological conditions,
and for wellness and beauty, as in cosmetic preparations. Essential oils are extracted from
different parts of different plants, e.g. lavender and ylangylang from flowers; eucalyptus,
lemon ti-tree, tea tree and patchouli from leaves; cinnamon from leaf and bark, etc. Each
essential oil has specific therapeutic values and applications to address a particular
human condition. For example, certain essential oils are believed to ease aching muscles
and relax a tired body, and others to decongest stuffy noses and promote easier breathing.
Massage is the main method used by aromatherapists for the application of essential oils
for various purposes. The oils are combined with specific plant oils, generally called
carrier oils, to form the massage oil. A carrier oil has to be hypoallergenic (i.e. it does not
irritate even the most sensitive skin) and it must be easily absorbed by the skin.

Virgin coconut oil (VCO) has been shown to be an excellent carrier oil, and carrier of
choice among expert masseurs and therapists, because it is hypoallergenic and easily
absorbed, as well as having anti-microbial properties. Results of several researches done
at the Dermatology Department of the Makati Medical Center in the Philippines as
reported by Verallo-Rowell (2005) have confirmed VCO’s anti-microbial properties. It
should be noted that VCO obtained from the fresh-wet process (coconut milk route) is
better suited to aromatherapy application because it is very light in texture.

3. Skin care products

The use of coconut oil as skin moisturizer has been known in PICTs and other coconut-
producing countries for hundreds, if not thousands, of years. VCO does not cause skin
irritation and can be applied to even the most sensitive skin. Hence, one of the major
applications of VCO is as a base oil for hypoallergenic cosmetics and skin care products.
This end-use comprises the bulk of the VCO currently being exported from the
Philippines. Adding attractive or therapeutic fragrances to VCO either through the use of
essential oils or by oil infusion will enhance its marketability as a skin conditioner. In
addition, a VCO-based product which can be used as a natural substitute for petroleum
jelly can be easily made in the kitchen.

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4. Hair care products

Coconut oil conditions the hair and scalp. Pacific Islanders, especially women, have been
massaging coconut oil in their scalp and hair for thousands of years. In many countries,
not only women, but men and children also put coconut oil in their hair. VCO is, however,
much better than crude, copra-derived coconut oil for hair conditioning. The addition of
essential oils like ti-tree, rosemary and patchouli, which are believed to have a good effect
on the hair and scalp, enhance the efficacy of VCO as a hair conditioner. When using
rosemary, the procedure for oil infusion should be followed. It should be noted, however,
that the concentration of the essential/herbal oils in scented oils for hair care should be
lower than that used for massage oils. Hence, after infusion, the infused oil is diluted with
VCO on a 1:1 ratio and then it is packaged and sold as hair conditioner. Rosemary,
patchouli and ti-tree can be easily cultivated in PICTs’ tropical weather. Rosemary is well
known as an herb for cooking and can be bought in supermarkets.

(Extracted from:///C:/Users/214/Desktop/VCA%20Files/VCO/Processing%20Manual
%20VCO%20PICT_chap%207-Annex.pdf)

Virgin Coconut Oil Processing in Oriental Mindoro

The general processing technologies for VCO are fresh-dry and fresh-wet processes. The
fresh-dry process involves obtaining VCO directly from fresh coconut meat. Before
extracting, it requires drying of fresh comminuted kernels (ground, grated, milled). On
the other hand, fresh-wet process involves extraction of coconut milk either mechanically
or manually with or without addition of water. Figure 2 shows the fresh-wet and fresh-
dry processes utilized by VCO processors in Oriental Mindoro.

Figure 2. VCO Processing Technologies in Oriental Mindoro

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The fresh-dry process involves the following procedural steps:

1. Shelling – removing the brown shell from the husked nut in order to free the fresh
kernel.
2. Peeling – removing the brown outer layer of the meat
3. Chopping – reducing the size of the meat into four to eight pieces before placing in
the granulator
4. Granulating – reducing the size of meat into granules, the size of which is as big as
a corn kernel
5. Drying – removing moisture from the meat
6. Expelling – separating oil from the dried meat granules
7. Settling – placing of oil in a tank to allow resideus to settle at the bottom
8. Packaging - placing of VCO in containers

The fresh-wet process involves the following procedural steps:

1. Cutting/Halving – cutting the nut in half
2. Grating – separating meat from the shell using a manual or mechanical grater
3. Extracting – separating milk from the grated meat
4. Fermenting – placing milk in a container for the fermentation process to proceed
through the action of bacteria
5. Harvesting – separating oil from the water

Production Trends

Global Production

It is observed that most of the top producers of coconut in the world in terms of volume
of production and are planted/harvested belongs to the Asia due to agro-climatic
conditions of the continent ideal for coconut farming (See Table 1). Of these top
producers, only the Philippines performed a negative growth rate in terms of volume of
production, posing a threat to the Philippine coconut industry. One of the major reasons
is the infestation of coconut scale insects or cocolisap, which was first cited in 2009.
Another is the occurrence of strong typhoons, such as Typhoon Yolanda, which is the
strongest typhoon ever recorded in the Philippines and caused major destruction to
coconut-producing regions such as Eastern Visayas and CALABARZON. Also, aging of
coconut trees continuously affect the national production, as some trees have been
reported to have reached their senility, almost producing nothing for an entire year.

In terms of yield, a there is a different story. Brazil leads the top 5 coconut producing
countries with an average of 11.02 MT/ha, while Indonesia attained the 2nd place with
almost half of the performance of Brazil, average of 6.13 MT/ha. Philippines places last
among the 5, having an average of 4.32 MT/ha. This is an indication how Indonesia seems
to utilize their coconut lands more than the Philippines, and aging coconut trees is said to
be the culprit. According to PCA, replanting of senile and unproductive coconut trees in
our country seem to be an uncommon practice.

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Table 1. Production Performance of Top 5 Coconut Producing Countries, 2010-2014

Ave.
Country 2010 2011 2012 2013 2014 Average Growth
Rate, %
Volume of Production (MT)
Indonesia 18,000,000 17,500,000 19,400,000 18,300,000 19,102,130 18,460,426 1.70
Philippines 15,510,283 15,244,609 15,862,386 15,353,200 14,696,280 15,333,352 -1.29
India 10,840,000 10,280,000 10,560,000 11,930,000 11,078,873 10,937,775 0.85
Brazil 2,843,453 2,943,651 2,931,531 2,820,468 2890,286 2,885,878 0.45
Sri Lanka 1,990,440 2,057,320 2,224,500 2,513,000 2,181,000 2,193,252 2.81
Area Planted/Harvested (HA)
Indonesia 2,980,000 2,980,000 3,000,000 3,000,000 3,087,770 3,552,847 0.90
Philippines 3,575,944 3,561,981 3,573,806 3,550,491 3,502,011 3,009,554 -0.52
India 1,895,900 2,070,820 2,137,000 2,159,000 2,140,000 2,080,544 3.14
Sri Lanka 394,840 394,840 417,000 394,836 394,836 399,270 0.07
Brazil 275,091 270,541 257,742 257,462 250,554 262,278 -2.29
Yield (MT/HA)
Brazil 10.34 10.88 11.37 10.95 11.54 11.02 2.86
Indonesia 6.04 5.87 6.47 6.10 6.19 6.13 0.79
Sri Lanka 5.04 5.21 5.33 6.36 5.52 5.49 2.95
India 5.72 4.96 4.94 5.53 5.18 5.27 -2.02
Philippines 4.34 4.28 4.44 4.32 4.20 4.32 -0.78
Source: FAOSTAT

Domestic Production

There was a fluctuating trend in coconut production in the country from 2010-2014, with
an average coconut production of 15,333,355.21 metric tons and an average growth rate
of -1%. For year 2012, coconut production grew by 3.83 percent and decreased in year
2013 at 3.21 percent. Notably, the decrease in production in 2014 was due to the
occurrence of strong typhoons (Yolanda and Pablo).

According to PCA, Super Typhoon Yolanda damaged some 44.12 million coconut trees in
Central Philippines when the super typhoon made its onslaught in November 2013. This
caused the coconut production to decrease to 15.35 million MTs in 2013 from 15.86
million MTs in 2012. The Philippine government has set aside P2.8 billion in 2014 to
rehabilitate the coconut areas badly damaged by the typhoon. In 2015, 4.3 million trees
were planted in farms that are affected by super typhoon Yolanda and the PCA is eyeing
to complete the rehabilitation by 2017.

Also, there was an occurrence of coconut scale infestation. The pest (Aspidiotus rigidus)
is a subspecies of coconut scale that was originally from Indonesia. It was 2009 when it
was first officially detected in Batangas by PCA and DA, when about one million trees
valued ₱33 billion had already been infected and the situation already needed the
declaration

The cocolisap was first detected locally in 2009 in Batangas. by PCA and DA in 2010, when
approximately one million trees valued at ₱33 billion had already been infected and the
13

situation already needed the declaration of a state of calamity in CALABARZON and

Basilan Province.

Figure 3. National Coconut Production, Philippines, 2010 - 2014
16,000,000
15,800,000
15,600,000
15,400,000
15,200,000
metric tons
15,000,000
14,800,000
14,600,000
14,400,000
14,200,000
14,000,000
2010 2011 2012 2013 2014
Coconut Production 15,510,282.61 15,244,609.30 15,862,385.83 15,353,199.94 14,696,298.35
Source: PSA

Davao Region ranked first in coconut production for the last five years with 16.42% share
to national production followed by Northern Mindanao and Zamboanga Peninsula (Table
2). These regions are located in Mandanao, where typhoons rarely occur.

Table 2. Volume of Production by Region, Philippines, 2010-2014
Ave.
REGION 2010 2011 2012 2013 2014 %Share Growth
Rate, %
PHILIPPINES 15,510,282.61 15,244,609.30 15,863,800.92 15,354,334.19 14,696,298.35 100.00 -1.29
Davao Region 2,635,866.63 2,627,248.20 2,720,232.61 2,275,979.56 2,332,089.54 16.42 -2.66
N. Mindanao 1,757,164.52 1,745,949.54 1,816,501.47 1,816,577.68 1,838,404.69 11.71 1.15
Zamboanga Pen. 1,713,018.08 1,557,621.30 1,730,428.16 1,743,791.81 1,659,014.20 10.96 -0.52
Eastern Visayas 1,769,081.84 1,769,951.50 1,771,459.42 1,623,585.95 1,191,923.25 10.60 -8.70
CALABARZON 1,394,637.70 1,390,853.78 1,417,438.97 1,434,803.72 1,380,490.99 9.15 -0.23
ARMM 1,254,755.49 1,269,268.40 1,311,218.90 1,327,298.98 1,356,181.58 8.50 1.97
Bicol Region 1,269,537.97 1,201,706.92 1,240,458.84 1,255,507.48 1,124,411.51 7.95 -2.84
SOCCSKSARGEN 864,270.35 879,867.50 985,175.40 1,040,610.03 1,071,706.81 6.31 5.60
Caraga 974,213.35 879,399.51 880,883.08 834,917.16 821,512.71 5.73 -4.10
MIMAROPA 659,219.26 712,899.74 745,488.54 779,134.54 806,928.97 4.83 5.20
Western Visayas 472,744.91 459,783.73 477,952.54 470,652.72 359,825.93 2.92 -5.97
C.entral Visayas 429,717.04 438,266.53 451,036.96 458,992.52 448,110.88 2.90 1.07
Central Luzon 210,442.31 212,648.27 209,025.05 179,360.22 189,174.44 1.31 -2.34
Cagayan Valley 67,320.27 59,761.10 66,232.77 71,560.70 74,372.18 0.44 2.89
Ilocos Region 37,378.91 38,476.03 39,315.99 40,482.32 40,977.71 0.26 2.33
CAR 913.98 907.24 952.23 1,078.78 1,172.97 0.01 6.56
Source: PSA
14

MIMAROPA ranked 10th with only 4.83% share to national production, but this region has
a good performance for the past years, having 5.20% average growth year.

It is worth mentioning that in year 2013, coconut hectarage also decreased from 3.573 M
hectares to 3.550 M. This declining situation is not only due to the super typhoons that
hit the country but could also be explained by the unwarranted cutting of coconut trees
due to the total log ban which more than offset the increase in newly planted and
replanted areas.

For the past five years, there was an increase in coconut production in the MIMAROPA
provinces. However, PSA data showed that production in the southern part of Oriental
Mindoro and Romblon decreased beginning year 2013 presumably due to the damaging
effects of Typhoon Yolanda.

For year 2014, Oriental Mindoro contributed 16% to the total regional coconut
production (Figure 4). Palawan and Romblon contributed the greatest shares, 43% and
30% of the regional production, respectively.

Figure 4. Coconut Production Share by Province, MIMAROPA, 2014
Marinduque Occidental
9% Mindoro
2%
Romblon Oriental
30% Mindoro
16%
Palawan
43%
Source: PSA

According to PSA data, in terms of average growth rate, Palawan registered the highest
with 13.55% followed by Marinduque and Occidental Mindoro with 4.89% and 3.45%,
respectively (Table 3). PCA’s salt fertilization program contributed to the positive growth
rate in production in these provinces. Oriental Mindoro had -3.08% average growth rate
due to about 23% decrease in production from 130,224.30 MT in 2012 to 105,679.14 MT
in 2013. Infestation of cocolisap has been cited in Oriental Mindoro in 2012. Also, PCA
identified that about 32% of the coconut trees in the province are considered senile.

15

Table 3. Volume of Coconut Production with Husk and Average Growth Rate by
Geolocation, 2010-2014
Average
GEOLOCATION 2010 2011 2012 2013 2014 Average Growth
Rate (%)
MIMAROPA 659,219.26 712,899.74 745,488.54 779,134.54 806,928.97 740,734.21 5.20
Palawan 240,081.79 289,262.20 309,967.97 357,882.03 397,579.62 318,954.72 13.55
Romblon 221,389.79 221,135.85 228,590.50 227,836.98 214,019.53 222,594.53 -0.78
Oriental Mindoro 123,770.21 126,006.30 130,224.30 105,679.14 107,130.73 118,562.14 -3.08
Marinduque 63,289.42 65,399.24 65,093.12 75,865.43 75,961.13 69,121.67 4.89
Occidental Mindoro 10,688.05 11,096.15 11,612.65 11,870.96 12,237.96 11,501.15 3.45
Source: Philippine Statistics Authority

Provincial Production

In contrast with the PSA data, provincial PCA records showed that Oriental Mindoro’s nut
production increased from 150,707,811 in 2012 to 180,023,219 in 2014 due to favorable
weather conditions and the province was spared from destructive typhoons (Figure 5)
This can also be attributed to the increase in the area planted with coconut due to PCA’s
Accelerated Coconut Planting/Replanting Program (ACPRP) which started
implementation in 2010. A sub-component of the ACPRP is the Participatory Coconut
Planting Project wherein coconut farmers were given incentive in the form of cash
amounting to PhP40.00/seedling planted and stabilized. The Coconut Fertilization
Project also contributed in the increase of coconut production. Some calamansi and
rambutan farmers shifted to coconut production and practice intercropping.

Figure 5. Oriental Mindoro Coconut Production (wholenuts), 2010-2014
200,000,000
180,000,000
160,000,000
Wholenuts, pcieces
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
2010 2011 2012 2013 2014
Year 2010 2011 2012 2013 2014
Volume 130,858,898 149,874,098 150,707,811 170,302,554 180,023,219

Source: PCA

16

Coconut Production by Municipality in Oriental Mindoro

The average coconut production from 2010 to 2014 was 156,353,316.00 whole nuts with
8% average growth rate. The municipalities of Pola, Pinamalayan and Gloria had the
highest coconut production in 2014 (Table 4). Pola produces most coconuts because it
has the biggest area planted to coconut. It also has a more suitable soil structure, drainage
and mountainous topography.

Table 4. Volume of Production (MT) by Municipality, Oriental Mindoro, 2010-2014
City/ Production Ave. Growth
Municipality 2010 2011 2012 2013 2014 Rate, %
Baco 11,954,249 12,982,765 13,246,320 14,313,432 15,531,750 6.77
Bansud 2,854,235 3,499,440 3,577,000 4,459,550 4,574,500 12.9
Bongabong 11,575,258 13,197,760 13,037,760 15,265,228 16,626,109 38.79
Bulalacao 958,540 1,120,899 1,130,493 1,263,800 1,352,862 9.14
Calapan City 10,458,315 7,052,760 7,173,040 7,558,520 8,022,682 19.4
Gloria 15,545,650 17,705,680 17,762,720 18,499,194 19,410,952 23.2
Mansalay 1,543,212 1,964,235 1,979,913 2,090,160 2,277,753 42.60
Naujan 5,450,250 10,604,724 10,609,872 10,833,927 12,284,888 110.11
Pinamalayan 17,542,250 20,027,640 20,069,280 24,067,968 24,576,783 24.32
Pola 27,850,240 31,750,520 31,764,600 38,222,736 39,956,900 38.9
Puerto Galera 7,544,825 8,513,817 8,608,236 9,217,360 9,764,160 26.94
Roxas 2,350,254 2,960,568 2,960,568 3,145,880 3,345,529 38.55
San Teodoro 4,725,520 5,349,120 5,506,520 5,627,400 6,109,397 26.88
Socorro 8,560,450 10,596,807 10,702,770 12,959,639 13,203,552 47.73
Victoria 1,945,650 2,547,363 2,578,719 2,777,760 2,985,402 47.33
TOTAL 130,858,898 149,874,098 150,707,811 170,302,554 180,023,219
Source: Philippine Coconut Authority
Note: Twelve (12) nuts = 1 liter of VCO

Calapan City recorded a remarkable decrease in coconut production from 10,458,315
nuts in 2010 to 7,052,760 nuts in 2011 due to land conversion from agricultural to
residential and commercial uses due to rapid urbanization of the city. Eventually,
production in Calapan City recovered in 2012 to 2014 due to planting/replanting
activities and implementation of the fertilization project of PCA.

Area planted to coconut by municipality in Oriental Mindoro

Based on PCA records, the total area planted with coconut in 2014 was 51,659 hectares.
The top five coconut producing municipalities in terms of area planted are Pola,
Bongabong, Pinamalayan, Baco and Gloria (Figure 6).

17

Figure 6. Area Planted to Coconut by Municipality, Oriental Mindoro, 2014
Bulalacao 728
Mansalay 997
Roxas 1,272
Victoria 1,379
Bansud 1,584
San Teodoro 1,989
Socorro 2,538
Calapan City 2,763
Puerto Galera 3,385
Naujan 3,527
Gloria 4,538
Baco 4,816
Pinamalayan 4,952
Bongabong 7,453
Pola 9,738
0 2,000 4,000 6,000 8,000 10,000

Wholenut Production and Estimated Volume of VCO Production by Municipality

Of the total 180,023,219 wholenuts produced in 2014, the volume of VCO that can be
produced in the province is estimated at 15,001,934.92 liters. The municipality of Pola
have the largest potential VCO production of 3.329,741.67 liters considering its total
wholenut production of 39,956,900 pieces. It was followed by Pinamalayan, Gloria,
Bongabong, Baco, Socorro and Naujan, respectively, all with potentials of more than a
million liters each. All the remaining municipalities have potentials to produce more than
hundred liters of VCO based on the wholenut production data of each municipality (Table
5).

18

Table 5. Wholenut Production and Estimated Volume of VCO Production by Municipality,

Oriental Mindoro, 2014
Wholenut Estimated Volume of
Municipalities
Production (pcs) VCO Production (Li)
Pola 39,956,900 3,329,741.67
Pinamalayan 24,576,783 2,048,065.25
Gloria 19,410,952 1,617,579.33
Bongabong 16,626,109 1,385,509.08
Baco 15,531,750 1,294,312.50
Socorro 13,203,552 1,100,296.00
Naujan 12,284,888 1,023,740.67
Puerto Galera 9,764,160 813,680.00
Calapan City 8,022,682 668,556.83
Roxas 3,345,529 278,794.08
Victoria 2,985,402 248,783.50
Mansalay 2,277,753 189,812.75
Bulalacao 1,352,862 112,738.50
TOTAL 180,023,219 15,001,934.92

19

SECTION 3: NATURE AND STRUCTURE OF THE INDUSTRY

Value Chain Mapping

The value chain of virgin coconut oil starts from coconut production and sourcing of
matured nuts as primary input for virgin coconut oil production. These are supplied by
traders and coconut growers who are either individual coconut growers or cooperative
members. Accredited local nurseries, agricultural supplies stores and financial
institutions provide inputs to coconut growers during the production activities.
Production may either involve maintenance, rehabilitation or expansion of coconut
plantation. Maintenance activities include clearing and weeding, fertilization, spraying
and harvesting. Rehabilitation and/or expansion includes clearing, planting fertilization,
spraying and weeding. Matured coconuts are sourced from coconut growers at ₱ 6.00 to
₱ 12.00 per wholenut.

Accredited consolidator/traders pick up and deliver the matured coconuts to All Coconut
Organics Company Limited, the largest producer of virgin coconut oil in the province. On
the other hand, some coconut grower-cooperative members directly deliver matured
coconuts to their VCO-producer cooperatives like BARCO and CASEMPCO while Victoria’s
VCO, a coconut grower-VCO producer gets most of the raw materials from her own farm.

VCO price ranges from ₱ 184.00 to ₱ 300.00 per liter. About 99% of VCO produced are
absorbed by international market and 1% are sold locally. The buyers of VCO include
institutional markets like hotels and wellness hubs. Processors promote their products
through participation in local, regional and national agriculture tourism trade fairs. Also,
processors sell their products online through government-subsidized website and social
networks.

The coconut industry enablers or support players play vital roles in sustainable
development of the enterprises in the value chain. These consist of government and
private agencies/organizations like United Coconut Association of the Philippines
(UCAP), PCA, DTI, DAR, CDA, BPI, DOLE, DOST, DILG, PPA, BFAD, PNP and DA in
partnership with Local Government Units that provide different forms of assistance. Also,
financial institutions and the academe (Mindoro State College of Agriculture and
Technology) are actively involved in supporting the coconut industry.

20


Figure 7. Value Chain Map for VCO, Oriental Mindoro
21


B. KEY PLAYERS AND FUNCTIONS

Input Suppliers (Coconut Farmers/Growers)

There are 31,238 coconuts growers’ province wide 10 percent of whom are members of
Small Coconut Farmers Organizations. The total area planted with coconut is 51,659
hectares or an average of 1.6 hectare per farmer. Since the assumption on this report is
for existing coconut plantation, farming activities include land preparation and field
planting, fertilizer application and spraying for rehabilitation and expansion. Regular
farm production activities include clearing and weeding, fertilization, harvesting and
collection of nuts. In this segment, harvesters are paid 50 centavos per wholenut.
Laborers may avail of cash advance from the farm owner. If the small coconut growers
opt to sell dehusked coconut for other purposes, an additional 50 centavos dehusking
cost shall be incurred.

Average coconut production in the province is 5,000 nuts/hectare per year, with
harvesting being done 30-45 days after last harvest. Usually, there are 100 coconut trees
grown per hectare with a distance of 10x10 meters between palms. Coconut growers
practice intercropping of various crops to existing coconut plantation such as coffee,
banana, papaya, cacao, calamansi, guyabano, durian, and lanzones. Coconut growers also
undertake companion planting for insect control, to make wind blocks and promote soil
conservation. Monthly sales of farmers ranged from ₱4,000 to ₱5,000 per hectare per
month from coconut. Harvesting is done through free fall harvest, picking/climbing
method and pole method. Nuts are harvested either when young (7-8 months old) or
matured (11 months). Eighty (80%) percent of farmers produce wholenuts; and 20% -
copra.

There are two (2) coconut producers’ cooperatives in the province who are involved in
the input supply segment namely Bigaan Agrarian Reform Community Organization
(BARCO) in San Teodoro with 48 members, and Calima Socio-Economic Multipurpose
Cooperative (CASEMPCO) with 197 members.

Local financial institutions operating in the province belong to either government of
private entities. The United Coconut Planters Bank, Land Bank of the Philippines,
Development Bank of the Philippines, Agribank, CARD Bank Inc. and some informal
lenders provides loan to registered coconut farmers’ cooperatives. Individual coconut
growers often secure cash advances from traders who extended financial leniency to
them to ensure that these growers’ produce shall be sold to them at traders’ dictated
price, a long-standing practice that put the coconut growers at the losing end. The PCA
also provides crop insurance to qualified coconut growers.

Assemblers/Consolidators/Traders

The 207 registered coconut traders of Oriental Mindoro are composed of assemblers who
usually own trucks and buying stations or bodegas where they consolidate coconuts. The
workers of the trading segment include tagabuhat, tagasako and driver. They are paid an
average of 90 centavos per nut. The ages of these workers range from 20-50 years old.

22

Traders may buy coconut from growers on cash basis at ₱6.00-12.00 per piece. They
usually have informal marketing contracts (through word-of-mouth, without formal
contract) with buyers. Four traders from Gloria and Bongabong supply dehusked
coconuts to All Coconut Organics Company Limited in Gloria. Some traders offer financial
assistance in the form of cash advance to individual coconut growers to ensure that the
growers’ produce shall be sold to them at traders’ dictated price, a long-standing practice
that put the coconut traders at an advantage.

VCO Processors

The processing segment plays an important role in the value chain by providing wide
market coverage as it adds value to the commodity. There are four (4) VCO processors in
the province of Oriental Mindoro. The traders who supply matured coconuts to All
Coconut Organics Company Limited buy from 6,000 farmers while the other three
processors directly purchase coconuts from 246 grower-members.

The monthly production capacity of these VCO processors are 1,200 liters for BARCO in
Bigaan, San Teodoro, 500 liters for CASEMPCO in Calima, Pola; 176,320 liters for All
Coconut Organics Company Limited in Banus, Gloria and 25 liters for Victoria’s VCO in
Pakyas, Victoria. Total production capacity of the four VCO processors is 178,045 liters
per month. Only All Coconut Organics Company Ltd. has registered its product with Food
and Drug Administration. Two of the processors (All Coconut Organics Company Limited
and BARCO) have marketing contracts with their buyers.

Virgin coconut oil processors are categorized based on DTI’s capitalization standard such
as: Micro, not more than ₱3,000,000; Small, ₱3,000,001-15,000,000; Medium,
₱15,000,001 -100,000,000. In this case, Coconut Organics Company Ltd. in Banus, Gloria
falls under Medium Enterprise category and the rest fall under Micro Enterprise category
for having capitalization of more than ₱3,000,000.

Regarding the VCO producers daily output, All Coconut Organics has a total VCO daily
output of 50,000 nuts/day equivalent to 4,166 liters. While BARCO & CASEMPCO –
produce on per order basis (less than 2,000 nuts per month which is equivalent to 166.66
liters/month). All Coconut Organics, Ltd. export VCO for the manufacturing of
pharmaceutical products in the USA. Virgin Coconut Oil produced by BARCO are utilized
as ingredient for food supplement in Japan and CASEMPCO’s VCO production are used for
soap making and wellness products.

Since Virgin Coconut Oil can be produced with zero waste, there is no any threat to the
environment and health that are anticipated nor identified. All Coconut Organics, Ltd.
disposes coco water as drinking water for cattle and in watering coco trees.

Sample of VCO produced by BARCO, CASEMPCO and Victoria’s VCO are shown in Figure
8 below. The VCO produced by All Coconut Organics Company Limited are packaged in
200-liter drums.
23


Figure 8. VCOs produced in Oriental Mindoro

The number of workers in the processing plants depends on the capacity/volume of
production. A small-scale processor has 8-11 workers while a large-scale processor has
90 workers. In this segment, workers include splitter, grater and extractor with daily
rates of ₱200, ₱255 and ₱400. Their ages range from 18 to 35 years old.

VCO processors use grater, extractor, stainless table, filling tank, vacuum dryer, filtering
device, spinner, fermentation equipment, granulator, expeller and settling tank. Other
costs incurred by the processors include transportation, communication, electricity,
water and rentals.

NATURE OF INTERFIRM RELATIONSHIP

Horizontal Relationships

Approximately 3,000 coconut growers in the province are organized into Small Coconut
Farmers Organizations or cooperatives. Some coconut growers’ shares information with
other growers regarding pricing, markets, government programs and other production
practices. There is also no existing interfirm relationship among cooperatives operating
in the province. These actors in the value chain transact business independently.

In terms of landowner-tenant relationships, absentee landowners designate tenants/
caretakers/overseers/administrators to their coconut farms to perform farming
activities. They have a sharing arrangement usually based on the sales of produce while
some are directly paid for their services. Sharing arrangements of 75:25 in favor of the
tenant, are the usual practice in coconut areas.

In the case of VCO, some cooperatives in the area are directly involved in all segments of
the value chain i.e., from input supply (coconut production, consolidation and trading of
coconut produced by their member-growers up to production and marketing of VCO.
Hence, cooperatives serve as sure market for the coconut growers’ produce which are
used by the cooperatives as raw materials for virgin coconut oil production.

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Oil Page 24 of 61

On the other hand, assemblers/consolidators/traders transact business independently

and no horizontal relationship exist among these actors in the value chain.

Vertical Relationships

Microprocessors buy wholenuts directly both from coconut grower-members while
Medium processor obtain raw materials from accredited traders. Usually, traders set the
price of matured coconuts. The price of VCO depends on the prevailing market price.
Employment opportunities are being provided by local traders and VCO processors. The
presence of VCO processors provides healthy and profitable business opportunities to
local traders and exporters of VCO that ensure market of the produce of coconut farmers.
Below is the snapshot of the vertical relationships of the various stakeholders in the VCO
industry.
Table 6. Snapshot of Relationship Assessment
Description
Aspect/Parameter
Framer-Trader Trader-Processor-Exporter
Buyer and Supplier Some coconut growers’ Medium processor deals
Selection/Procurement organizations/associations do directly with accredited
Process not serve as intermediaries traders for the source of raw
between the growers and the
materials.
medium processors in the
procurement of nuts for VCO
production since their
organizations are also VCO
processors.
Information Sharing/ Some degree of information Processors are operating and
Transparency sharing on the part of the acting independently; not
farmers about the possible transparent about their
market of their nuts, prevailing operation; seldom share
market prices and government information about sources of
programs. raw materials, VCO supply
and demand situation as well
as prices.
Quality Control and Harvesters and nuts gatherers Processors have quality
Inspection have acquired skills in control measures for their
determining the right maturity products.
of nuts. Sorting is usually done
in the field.

Technical advices are given by
processors to ensure good
quality nuts for processing.
Value Added Services/ Traders do not give value-added 3 Processors and 1 Exporter
Collaboration and services to farmers aside from package their own products
Cooperation providing cash advances. in their respective technique.
Basis of Competition/ Price, quality, cash leniency Quality, volume, selling price
Offer
Source: Focus Group Discussion

Oil Page 25 of 61

A. PRICE AND COST STRUCTURE

In the costs and returns analysis of coconut farms, expenses and receipts that were
incurred in one hectare of coconut farm are considered (Table 7). Both expenses and
receipts are classified into cash and non-cash form. The assumptions are enumerated
below.
Table 7. Cost and Return per Hectare of a Coconut Farm, 2014
Items Specifics Amount
RETURNS:
Total Cash Receipts 60,240.00
Mature Nuts Sold ₱8 x 7,430 nuts 60,240.00
Total Non-Cash Receipts 1,400.00
Home Consumption ₱8 x 100 nuts 800.00
Given Away ₱8 x 100 nuts 800.00
Total Receipts 61,840.00

COSTS:
Total Cash Expenses 12,400.00
Fertilizer, salt ₱15 x 100 sacks 1,500.00
Fertilizer, chicken manure ₱60 x 20 sacks 1,200.00
Seedlings ₱35 x 20 seedlings 700.00
Hired Labor ₱250 x 36 man-days 9,800.00
Total Non-Cash Expenses 674.00
Depreciation 674.00
Total Expenses 14,874.00

NET PROFIT 48,766.00

Assumptions:
Farm gate price of coconut = ₱8 per nut
Total volume of harvest = 7,730 nuts
Home Consumption = 100 nuts
Given Away = 3% of the harvest = 200 nuts
Mature Nuts Sold = 7,430 nuts
Fertilizer (Sodium Chloride, salt) = ₱15 per 10-kg sack
Consumption of Salt = 100 sacks
Fertilizer (chicken manure) = ₱60 per sack
Consumption of chicken manure = 20 sacks
Seedlings = ₱35 each
Consumption of seedlings = 20 seedlings
Hired Labor (4 Laborers) = ₱250 per man-day
Harvesting = 9 times per year (every 1.33 months) with a total of 36 man-days

Sources of Depreciation Cost:
grass cutter, axe, rake, sickle, scythe, pruning shear, and bolo knife

Oil Page 26 of 61

When it comes to consolidators, the table below shows the cost and return of a
consolidator with a capacity of 10,000 nuts per harvest season (per month) and having a
warehouse that is being rented monthly. The assumptions can be found below.

Table 8. Cost and Return per Month of a Coconut Consolidator, 2014
Items Specifics Amount
RETURNS:
Total Cash Receipts 1,800,000.00
Sales of Mature Nuts 10,000 nuts x ₱9 x 20 days 180,000.00
Total Receipts 180,000.00

COSTS:
Total Cash Expenses 1,698,000.00
Mature Nuts 10,000 nuts x ₱8 x 20 days 1,600,000.00
Sacks 400 pieces x ₱2 x 20 days 16,000.00
Diesel/Oil ₱1,000 x 20 days 20,000.00
Hired Labor (Driver) ₱300 x 2 drivers x 20 days 12,000.00
Warehouse Rental 50,000.00
Total Non-Cash Expenses 15,225.00
Depreciation
Truck ₱180,000/12 months 750.00
Weighing Platform ₱2,250/12 months 187.50
Total Expenses 1,713,225.00

NET PROFIT 116,590

Assumptions:
No. of days of operation per month = 20 days
No. of operation
Cost of mature nuts (dehusked) = ₱8 per nut
Price of mature nuts (dehusked) = ₱9 per nut
Total volume of mature nuts (dehusked) per day = 10,000 nuts
No. of days per month = 20 days
Number of deliveries per month = 20 times
Capacity of 1 sack = 25 pieces of nuts; so 10,000 nuts = 400 sacks
1 sack = ₱2 each
Diesel/Oil = ₱1,000 per day
Hired Labor (2 Drivers) = ₱300 per driver/day
Warehouse Rental = ₱50,000 per month
Acquisition Cost of Truck = ₱2,000,000
annual depreciation cost* = ₱180,000
Acquisition Cost of Weighing Platform = ₱25,000
annual depreciation cost* = ₱2,250

*using Straight-line Method; with salvage value = 10% of the acquisition cost; lifespan = 10 years

The net returns on processing virgin coconut oil may vary depending on the capacity and
method used. Illustrated below are the sample costs and returns for the two different
methods of processing VCO: Fresh-Dry Process and Fresh-Wet Process. The latter process
has lesser investment requirement compared to fresh-dry process.

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Table 9. Cost and Return Analysis for Fresh-Wet Process for One Month
Items Specifics Total
Sales:
Raw Virgin Coconut Oil 1,200 liters x ₱ 200.00/ liter 240,000.00
Total Sales 240,000.00
Cost:
Matured Nuts 14,400 pcs x ₱ 10.00/ nut 144,000.00
Direct Labor Cost ₱ 200/worker/day x 7 working days 11,200.00
Factory Overhead Cost 5,070.00
Total Cost 160,270.00
Profit 79,730.00

Notes:
Number of nuts / liter: 12 pcs.
Number of workers: 8 workers
Number of working days/ month: 7
Factory Overhead Cost: Includes transportation, electricity and communication
Price of matured nut = ₱10/nut; source is from processor’s member farmers

Table 10. Cost and Return Analysis for Fresh-Dry Method for One Month
Items Specifics Total (Php)
Sales:
Raw Virgin Coconut Oil 176,320 liters x $4.00 x ₱ 46/1$ 32,442,880.00
Total Sales 32,442,880.00
Cost:
Matured Nuts 2,115,840 nuts x ₱ 9.00/nut 19,042,560.00
Direct Labor Cost ₱ 255/worker x 90 workers x 24 days 550,800.00
₱ 60,000.00/ month/ 26 working
Factory Overhead Cost days 255,500.00
Total Cost 19,848,860.00
Profit 12,594,020.00

Notes:
Number of nuts processed/ month: 2,115,840 pcs.
Number of workers: 86 workers (two 8-hour shifts x 43 workers/shift) plus 4 office
staff
Number of working days/month: 24
Factory Overhead Cost: Includes utilities, indirect labor, transportation, rent, etc.
Exchange rate: $1 = ₱46
Price of matured nut = ₱ 9/nut; source is from traders

Based on the calculation of cost and return illustrated above, the return in fresh-wet
process is 50% while on fresh-dry process, the return indicated is 63% for every liter of
VCO produced (Table 11).

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Table 11. Analysis of Processes used in Oriental Mindoro

Method Used Revenue/liter Cost/liter Profit/liter Return (%)
Fresh-Wet Process ₱200.00 ₱133.56 ₱66.44 50%
Fresh-Dry Process ₱184.00 ₱112.57 ₱71.43 63%

Relative Financial Position of Players

a. Medium Category Processor

Figure 8 below presents the revenues, costs and profit ratio in the value chain of one (1)
liter VCO from input supply (coconut production), consolidation/trading, and processing
in a medium category processor in Oriental Mindoro. To produce a liter of VCO, an
average of twelve (12) mature whole nuts supplied by accredited consolidator/traders.
It is evident that the greater percentage of value added benefits goes to the medium
category processor of VCO which comprised 54% of the total value-added. Around 32%
goes to the coconut grower and the smallest chunk of 14% goes to the
consolidator/trader (Fig. 9).

Figure 9

Product assumption is based on existing coconut plantation.

b. Micro Category Processor (Cooperative)

The revenues, costs and profit ratio in the value chain of one (1) liter VCO from input
supply (coconut production), consolidation/trading, and processing in a micro category
processor (cooperative) in Oriental Mindoro is illustrated in Figure 9. Around 51.11% of
the total profit margin goes to the cooperative processor, with an additional 5.27% gained
from buying raw materials from grower-members while the coconut growers earned
around 43.62% of the total profit derived from the value chain.


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Figure 10


c. Coconut Grower-Micro Category Processor

This category illustrates the revenues, costs and profit ratio in the value chain of one (1)
liter VCO from input supply (coconut production) to processing in a coconut grower and
at the same time, a micro category processor in Oriental Mindoro. The coconut grower-
microprocessor obtain a much bigger profit than the plain coconut grower through value-
adding or processing her coconuts into virgin coconut oil and selling it locally getting
40.68% profit from coconut production and another 59.32% from VCO processing. This
is a very good example of how a coconut grower can earn more profit aside from just
growing coconut. Value adding can boost farmers’ income when market opportunities are
available.

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Figure 11.

The result of the data below shows that the farmers acquire the higher profit share (63%).
The processor gains a lower share with only 37%.

Table 12. Relative financial position of players in fresh-wet process
Key Players Farmers Processor
Volume (nuts/li) 14,400.00 1,200.00
Unit Price 10.00 200.00
Sales 144,000.00 240,000.00
Cost 7,200.00 160,270.00
Profit 136,800.00 79,730.00
Share (%) 63% 37%
Note: The raw materials are bought from the processor’s member
farmers at Php10/nut

The processor acquires the highest profit share of 44%, followed by farmers with 41%
and traders have the lowest profit share of 15% in the fresh-dry process.

Table 13. Relative financial position of players in fresh-dry process
Key Farmers Traders Processor
Players Matured Nuts (pcs) VCO (li)
Volume 2,115,840.00 2,115,840.00 176,320.00
Unit Price 6.00 9.00 184.00
Sales 12,695,040.00 19,042,560.00 32,442,880.00
Cost 1,057,920.00 14,599,296.00 19,848,860.00
Profit 11,637,120.00 4,443,264.00 12,594,020.00
Share (%) 41% 15% 44%

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Notes:
§ Monthly cost of farmers, traders and processors is used to present the data
§ Processor is sourcing out raw materials from traders.

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SECTION 4: MARKETS AND MARKET OPPORTUNITIES

A. MARKETS AND MARKET TRENDS

The world demands for healthful, organically grown farm produce and VCO is considered
a potential product that will help in reaching that goal. The global demand is huge but the
countries suitable for coconut production to produce VCO are limited. It is in this aspect
that the Philippines should capitalize and have focus so that coconut productivity and
profitability programs be instituted that could bring impact on the lives of the majority
small coconut farmers.

In 2001, the first VCO was officially ship-out from the Philippines by an herbal company
exporting at least 2.0 MT of pure Virgin Coconut Oil (VCO) to the United States. Since then,
the demand for the product has been steadily growing in the US, including in the other
highly developed countries like Canada, Australia, and United Kingdom. Currently, other
coconut producing countries like India, Sri Lanka, Fiji, Solomon Islands, Papua New
Guinea, and Samoa among others are now producing VCO products due to its very high
export value compared to the value of coconut oil (copra). During the Experts’
Consultation on Coconut Sector Development held last October 30 to November 1, 2013,
Romulo N Arancon, Jr., the APCC–Executive Director on his topic, Market and Trade of
Coconut Products, he showed that among the existing exporters of VCO, Philippines is the
top exporter of Virgin Coconut Oil (VCO) products. Table 14 below shows the volume of
export to other country from 2008 to 2012.

Table 14. Virgin Coconut Oil and volume of exports in MT by country, 2008-2014
Country 2008 2009 2010 2011 2012 2013 2014
Philippines 1,693 1,801 2,737 4,914 6,002 7,061.37 26,421.00
Sri Lanka nda nda 1,817 910 1,660 nda nda
Solomon Islands 47.85 100.53 55.83 161.54 180.25 nda nda
Samoa 12.6 20.7 18.8 nda nda nda nda
Source: APCC

From year 2001 to 2012, export of Virgin Coconut Oil in the Philippines recorded a
favourable increase (Figure 12). From year 2001, an appreciable rise was seen from 1.80
MT valued at US$19,810.00 to 2,737.17 MT in 2010 worth US$8,370,742. Export earnings
of VCO increased by 235%, from US$1.49 million in 2006 to almost US$5 million in the
following year. For year 2007, an improvement in export volume and value was likewise
observed.

The rapid growth rate can be attributed to the increasing cost of health care, aging,
population, growing evidence of health benefits in food ingredients and the food
industry’s search for new opportunities, among others. The VCO industry also benefitted
on the increasing popularity of functional food products both in local and world market.
There is an increasing trend in the export volume from 2001 with 2.0 MT to 2013 with
7,061 MT, registering an average growth rate of 98 percent. This is attributed to the
upsurge demand of the product.

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Figure 12. Export Volume and Value Chain of VCO in the Philippines, 2001–2013
8000
7000
6000
5000
4000
metric tons
3000
2000
1000
0
-1000
-2000
2001 2002 2003 2004 2005 2006 2006 2008 2009 2010 2011 2012 2013
VCO Export (in MT) 2 19 103 177 475 461 1,131 1,603 1,801 2,737 4,914 6,002 7,061

Source: PCA, UCAP PHIL

Figure 13 reflects the various market destinations of VCO product exported by the
country in the year 2013. Major export destinations of VCO include the USA, Canada,
Germany, Lithuania, United Kingdom, New Zealand, Australia, Russia, Finland, and
Turkey. USA and European countries remain the top markets of VCO due to the demand
for products made from natural ingredients.

People in these countries primarily by VCO as a food supplement or for nutraceutical
purposes because VCO is believed to contain health-giving additives and have medicinal
benefits. VCO’s growing number of beneficial effects on human health is supported by
medical literature.

Figure 13. Philippine VCO exports by Destination, 2013

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The European market for Virgin Coconut Oil (VCO) has significantly grown over the past
years, driven by the increasing attention that European consumers are paying to
healthier diets. New evidence on the medicinal properties of VCO and its possible effect
on fighting diabetes also offers opportunities for developing country (DC) exporters in
niche markets.

As an emerging product, statistics are not yet available on the total demand and supply
of the global market. Even local production of the producing countries as well as the
domestic and export demand of the exporting countries cannot be established yet.
Nonetheless, some of the data available reflect the following: Australia has a demand of
2-5 ton/month; Germany needs 500 liters per month; Europe’s demand reaches 400 tons
per month; United States needs 1000 tons per year in which only 600 tons are fulfilled by
importing from the Philippines; Great Britain and Denmark each needs 500 tons and 250
tons per year, respectively. A naturally healthy lifestyle trend is booming in developed
countries causing VCO demand rising (CBI Market Information Database, 2012-2013).

Table 15. VCO Volume Requirement of International Market, 2013
Volume Requirement
Country
per Month (in tons)
United States of America 1,000
Great Britain 500
Europe 400
Denmark 250
Australia 2-3
Germany 500 liters
Source: CBI Market Information Database

China is considered as an emerging country of VCO due to its rising market on skincare
and beauty products that contain VCO. Domestic markets for these products include those
sold in malls, drugstores, spa and other health and wellness shops (Lifted from
CALABARZON VCO VCA, 2015).

Virgin Coconut Oil (VCO) is considered as one of the export winners as it is included in
the top 30 non-traditional products which contributed to the coconut industry’s export
earnings (A study on Virgin Coconut Oil in Saranggani, 2014).

Aside from VCO, coco sap sugar, coco water, coco flour and coco coir are also recorded as
top performers in the export market as shown in Figure 14 below.

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Figure 14. Non-traditional exports of the Philippines, 2010-2012

Source: 2013 Outlook for Coconut Industry, PCA

The average yearly production of VCO processors in Oriental Mindoro is estimated at
2,136,540 liters. This is only 14.242 percent of the total volume of VCO that can be
processed from the 180,023,219 wholenuts produced in 2014.

Table 16. Monthly capacity, average yearly production and supply share by VCO
processors in Oriental Mindoro, 2014
Monthly Average Yearly Supply Share
Existing VCO Processors
Capacity (li) Production (li) (%)
BARCO 1,200 14,400 0.096
CASEMPCO 500 6,000 0.040
All Coconut Organics Co. Ltd. 176,320 2,115,840 14.104
Victoria’s VCO 25 300 0.0020
Total 178,045 2,136,540 14.242

Existing and evolving market standards (product and process standards)

Philippine National Standard

As defined in the Philippine National Standard of Virgin Coconut Oil, VCO must be
obtained from the fresh, mature kernel of coconut by mechanical or natural means, with
or without the use of heat. The alteration of the natural physical and chemical of the oil
must not be altered through refining, bleaching or deodorizing.

Physical Characteristic of VCO

a. Sweet flavor taste and mild aroma
b. Free from rancid, odor and taste
c. Should be clear oil in room temperature and pure white when solid below 22
degrees Celsius and must be smooth in texture


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Table 17. Chemical and Fatty Acid Composition of Virgin Coconut Oil
Chemical Characteristic of Virgin Coconut Oil
Common Name Composition Composition Percentage
Caproic acid C 6:0 ND - 0.7
Caprylic acid C 8:0 4.6 - 10.0
Capric acid C 10:0 5.0 - 8.0
Lauric acid C 12:0 45.1- 53.2
Myristic acid C 14:0 16.8 - 21
Palmitic acid C 16:0 7.5 - 10.2
Palmitoleic acid C 16.1 ND
Stearic acid C 18:0 2.0 - 4.0
Oleic acid C 18:1 5.0 - 10.0
Linoleic acid C 18:2 1.0 - 2.5
Linolenic acid C 18:3 ND - 0.2
C 24:1 ND
ND: Non-detectable
Gas Liquid Chromatography Range of Fatty Acid Composition
Specification
Properties
(% max)
Moisture and volatile content 0.2
Free fatty acids (expressed as
0.2
lauric)
Peroxide value 3.0 meq/kg oil, max
Food Additives
Contaminants - none permitted
Matter volatile at 105oC, (%max)
Heavy Metals (mg/kg, max)
Iron (Fe) 5
Copper (Cu) 0.4
Lead (Pb) 0.1
Arsenic (As) 0.1
Source: Philippine National Standard

Hygiene: It is recommended that the product covered by the provisions of this standard
shall be in accordance with the appropriate Sections of the General Principle of Food
Hygiene recommended by Codex Alimentarius Commission (CAC/RCP 1-1969, Rev, 3-
1997)

Labeling: Label of each package shall have the following information:
1. Name of product: "Virgin coconut oil"
2. Brand name of trade name
3. Net content
4. Lot identification
5. Name and address of the manufacturer and/ or packer, or distributor
6. The phrase "Product of the Philippines"
7. Type of Process
8. Date manufactured and "Best Before"
9. BFAD registration number and bar code (optional)

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Note: All data provided by the Philippine National Standard of Virgin Coconut Oil

Asian and Pacific Coconut Community (APCC) Standards

According to the APCC standards, virgin coconut oil (VCO) is obtained from fresh and
mature kernel (12 months old from pollination) of the coconut (Cocos nucifera L.) by
mechanical or natural means with or without the application of heat, which does not lead
to alteration of the nature of the oil. VCO has not undergone chemical refining, bleaching
or deodorizing. It can be consumed in its natural state without the need for further
processing. Virgin coconut oil consists mainly of medium chain triglycerides, which are
resistant to peroxidation. The fatty acids in virgin coconut oil are distinct from animal fats
which contain mainly of long chain saturated fatty acids. Virgin coconut oil is colorless,
free of sediment with natural fresh coconut scent. It is free from rancid odor or taste.

Essential Composition and Quality Factors of Virgin Coconut Oil
Parameter
Moisture (%) Max 0.1
Matters Volatile at 120oC (%) Max 0.2
Free Fatty Acid (%) Max 0.2
Peroxide Value meq/kg Max 3
Relative density 0.915-0.920
Refractive Index at 40oC 1.4480-1.4492
Insoluble impurities percent by mass Max 0.05
Saponification Value 250-260 min
Iodine Value 4.1-11
Unsaponifiable matter % by mass, 0.2-0.5
max
Specific gravity at 30 deg./30 deg. C 0.915-0.920
Polenske Value, min 13
Total Plate Count <0.5
Color Water clean
Odor and Taste Natural fresh coconut scent, free
of sediment, free from rancid odor
and taste
Food Additives

None permitted

Contaminants
Parameter Mg/kg
Iron (Fe) Max 5
Copper (Cu) Max 0.4
Lead (Pb) Max 0.1
Arsenic (As) Max 0.1

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Gas Liquid Chromatography (GLC) ranges of Fatty Acid Component

Common name Composition (%)
Caproic acid C 6:0 0.10 – 0.95
Caprylic acid C 8:0 4 – 10
Capric acid C 10:0 4 – 8
Lauric acid C 12:0 45 – 56
Myristic acid C 14:0 16 – 21
Palmitic acid C 16:0 7.5 – 10.2
Stearic acid C 18:0 2 – 4
Oleic acid C 18:1 4.5 – 10
Linoleic acid C 18:2 0.7 – 2.5

Hygiene

It is recommended that the product covered by the provisions of this standard shall be in
accordance with the appropriate sections of the General Principles of Food Hygiene
recommended by the Codex Alimentarius Commission (CAC/RCP 1-1969, Rev. 4-2003).

Labelling and Packaging

The name of the food on the label shall be “Virgin Coconut Oil”. The provisions of the
General Standard for the labelling of Pre-packaged Foods (Codex Standard 1 – 1985, Rev.
6 - 2008) shall apply.

Methods of Analysis and Sampling

Based on Codex Alimentarius (Volume 13).

Commodity Flow Map

The geographic flow of VCO (Figure 15) starts from coconut growers selling coconut from
the farms either directly to processors or through traders.

The raw materials for VCO processing of BARCO and CASEMPCO are supplied by their
members who are also coconut growers. All Coconut Organics Co. Ltd. is supplied by
accredited traders from Gloria and Bongabong who buy matured coconuts from 6,000
identifies coconut growers. Victoria’s VCO uses wholenuts from her farm and from other
coconut Processors mostly distribute VCO by delivery. Some VCO are sold to walk-in
buyers and through local, regional and national trade fairs. Domestic destinations of VCO
other than the province include Bicol, Metro Manila, Quezon City and Marinduque. One
processor directly sells VCO to Japan. In 2015, a VCO Manufacturer started operating in
Gloria whose products are directly exported to USA.


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Figure 15. Visualization of Geographic Flow of VCO in Oriental Mindoro

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SECTION 5. SUPPORT SERVICES

A. FINANCIAL SERVICES

Farmers obtain their financial capital from family savings, borrowings from traders,
informal and formal credit providers. There are 63 banking institutions providing
financial assistance. The Provincial Government of Oriental Mindoro through the
Provincial Tourism, Investment and Enterprise Development Office, also provides
interest-free loans to coconut cooperatives and people’s organizations.

Table 18. Some existing providers and their services, Oriental Mindoro
Name of Service Provider Location Services Provided
Land Bank of the Philippines Calapan City, Loan (8.5% per annum)
Roxas,
Pinamalayan
Development Bank of the Calapan City Loan (6-9% per annum)
Philippines
CARD Bank provincewide Micro – Finance (24% per
annum)
Rizal Commercial Banking Calapan City Funding for business proposals
Corporation (with collateral – 6.88% per
annum, without collateral –
1.25% per month)
United Coconut Planters Bank Calapan City Loan – 9-10.5% per annum
Provincial Government of provincewide Micro – Finance (0% interest)
Oriental Mindoro
PCARRD Los Baños, Laguna Funding for proposed project

B. NON- FINANCIAL SERVICES

Several institutions provide non-financial services to value chain players.

Table 19. Non-financial Services Provided by Institution to Coconut Industry
Institution Services Provided
Philippine Coconut Authority Major Programs and Projects
1. Accelerated Coconut Planting and re-planting Project
(ACPRP)
2. Salt fertilization Project (SFP)
3. Field Extension Services
4. Provision of inputs and technical assistance on:
§ Coconut planting and replanting
§ Application of fertilizer on coconut
§ Intercropping of coconut farms
§ Livestock raising
§ Coconut processing
§ Control/eradication of coconut pests and diseases


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Institution Services Provided

Regulatory Services
§ Registration of coco-product and by-product
traders/ processors
§ Issuance of certificate of inspection and
verification for land conversion
§ Issuance of export and commodity clearances
§ Assessment and collection of fees
§ Marketing assistance in terms of market matching
and trade fairs/ exhibits
Provincial Government of Technical assistance on business planning and project
Oriental Mindoro proposal preparation
Land Bank of the Philippines Agricultural Credit Support Project
Provides technical and capacity building assistance to
ACSP implementers and borrowers to enhance
competitiveness of the beneficiaries and provide access
to technologies by promoting business models with
market linkage and strategies.
Department of Trade and Promotes awareness to SME's funding sources provided
Industry by the government and private sectors for the
improvement and productivity enhancement of the
enterprise.
Department of Science and Provides production accessories and packaging and
Technology (DOST) labelling services


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SECTION 6: ENABLING ENVIRONMENT

A. FORMAL RULES, REGULATIONS AND POLICIES

Table 20. Subject and Coverage of Formal Rules, Regulations and Policies

Circular/ Orders Subject Coverage
Mandated to oversee the overall
performance of the sector. PCA is tasked to
promote development of the sector and
welfare of the coconut farmers. PCA is an
agency that ensures that the coconut and
Presidential Decree No. Creation of Philippine
palm oil industry is globally competitive and
232 Coconut Authority
guarantees that the programs of the agency
will directly benefit the coconut farmers.
PCA provides research and development as
well as financial services for the farmer’s
cooperatives.
An Act Providing for the Regulation of the

Coconut Preservation Cutting of Coconut Trees, its replenishment,
Republic Act No. 8048
Act of 1995 providing penalties, therefore, and for other
purposes
This serves as guidelines of Philippine

Presidential Decree No. Presidential Decree Coconut Authority in implementing
961, s. 1976 No. 961, s. 1976 programs on the development of coconut
and palm oil industry.
Implementing Rules
and Regulations to
Administrative Order Enforce Standards in States standards regarding VCO production
No. 01, S. 2005 the Production and and marketing
Marketing of Virgin
Coconut Oil (VCO)
Amending Section 2 of
AO No. 001, Series of
Administrative Order 1983 and States that the PCA shall impose and collect
No. 01, S. 2010 Section 3 and Other PCA fee to defray its operating expense.
Provisions of AO No.
01, Series of 1996

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Circular/ Orders Subject Coverage

This act grants medium and long term
loans to a Filipino individual or
enterprise for financing the
development of coconut enterprise and
The Coconut Investment
Republic Act No. 6260 expansion of a new or existing
Act
agricultural coconut land, provided 70%
of the capital stock is owned by a Filipino
and is attested to have a good financial
standing.
BAFPS, as mandated, is the governing

Creation of Bureau of body for the issuance of national
Agriculture and Fisheries standard on various commodities such
Product Standards as common knowledge on the definition
Special Order No. 411
(BAFPS) Sub-Committee of the product, composition and quality,
on Crops, PNS/BAFPS as well as the methods of sampling and
22:2004 analysis. The standard issued on VCO
was made for human consumption.
Revised Rules and

Procedures governing States rules and policies on the leasehold
Administrative Order
leasehold implementation system primarily for lands devoted to
No. 02
in tenanted agricultural sugarcane and coconut.
lands.
An act to strengthen the food safety

regulatory system in the country to
Republic Act No. 10611 Food Safety Act of 2013 protect consumer health and facilitate
market access of local foods and food
products, and for other purposes.

B. INFORMAL RULES AND SOCIO-CULTURAL NORMS

1. Some farmers believe that planting during full moon and high tide will result in
bountiful harvest. Also, palms will quickly bear fruits if planting is done at dawn
preferably on Sundays. Male farmers who plant the first seedling should face east
for abundant harvests. These superstitious beliefs are still practiced by some
coconut farmers in the province.

2. Farmers tend to be lax in farm management because of their notion that coconut
is self-sustaining even without regular care and maintenance like fertilizer
application and weeding.

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3. Adyawan Festival in San Teodoro is celebrated every December 8 to highlight the

culture and tradition of Iraya-Mangyans and display the many uses of coconut -
from its leaves, trunks, down to its root. Adyawan is one variety of coconut that
is common among the Iraya-Mangyans.


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SECTION 7: CONSTRAINTS AND OPPORTUNITIES

Coconut farmers need input support like quality planting materials and equipment that
affect their production. They also have to be trained on sustainable farming practices that
could ensure high productivity. Hiring/capacitating of additional extension workers
should be undertaken to provide technical services to farmers.

The poor road condition in some coconut plantations resulted in farmers selling their
produce to traders at lower price since they will be incurring additional cost in
transporting/hauling their produce. This also affects marketing of processed products.

With the implementation of the Strong Republic Nautical Highway, the province is at risk
of the entry of pests and diseases. Strict enforcement of quarantine laws and practice of
Integrated Pest Management are necessary. There are also reported illegal cutting of
coconut trees which decrease coconut production in the province.

The machineries used in producing VCO have to be upgraded to ensure that the product
meets the Philippine National Standard. Processors should be capacitated on Good
Manufacturing Practices. The waste disposal of coconut by-product has to be addressed
through the provision of technology for coconut water processing. Marketing database
should be established as well as conduct of market matching and product promotion.

The VC players need to be strengthened/empowered through conduct of capacity
building activities to assist them develop their full potentials.

Opportunities that can boost the industry include global trend for biodegradable/organic
products, access market due to ASEAN integration, untapped domestic and foreign
markets and availability of modern communication facilities for marketing of products
(e-commerce).

Table 21. Summary of Priority Constraints/Opportunities and Interventions
Constraints/ Intervention Strategy Who can do it and Potential Roles
Opportunities and Approach Public Private
INPUT PROVISION (COCONUT PRODUCTION)
Insufficient input Appropriate additional DA, PCA Farmers
support to farmers fund for provision of organizations/SCFOs
(quality planting farm inputs to farmers
materials and Provision of climate
machineries) resilient varieties of
coconut

Limited Conduct of trainings on DA, PCA, SCFOs, barangay
appreciation/non- GAP DOST, DTI, extension workers
compliance of Good PLGU, SUCs
Agricultural Practices

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Insufficient extension Hiring/capacitating of PCA, private firms (eg., VCO

workers additional extension P/MLGU producers), barangay
workers extension workers
Low adoption of Conduct of GAP trainings DA, PCA,
production technology DOST, DTI,
PLGU, SUCs
Insufficient working Provision of additional LBP, DBP Rural and Commercial
capital financial assistance Banks
Risk of pest and diseases Strict enforcement of BPI-Plant
Quarantine Laws and Quarantine
practice of Integrated Service,
Pest Management PCA, DILG,
PPA
Presence of illegal Strict implementation of PCA, PNP,
cutting of coconut trees RA10593 (Coconut PLGU
Preservation Law of
1995)
Opportunities:
§ PCA provides support for the production and distribution of disease-free high
yielding materials and equipment
§ DA and PCA provides GAP trainings
§ Available barangay extension workers
§ DA and PCA provides GAP trainings
§ Presence of Quarantine Laws and IPM Program for coconut
§ Presence of Coconut Preservation Law of 1995

CONSOLIDATION/TRADING
Some areas have poor Construction of farm-to DA, PCA,
road condition market roads DAR, PLGU,
DPWH
Opportunities:
§ Some government agencies (DA, DAR, LGUs) implement road development
program
§ Available financing institutions

VCO PROCESSING
Outdated Provision and upgrading of DA, PCA, DTI,
machineries machineries and equipment DOLE, DOST,
PhilMech
Low product quality Conduct of GMP trainings; PCA, DA, DTI, VCO producers
of some VCO seal of quality DOLE, DOST,
producers PhilMech
Waste Technology transfer; PhilMech
disposal/utilization Provision of
of coconut by- facilities/equipment
products
Opportunities:
§ PCA and DOST are providing machineries
§ Presence of DTI, DOST and PTIEDO provides technical assistance
Oil Page 47 of 61

§ Presence of technology for processing of coconut water

§ Global trend for biodegradable/organic products (demand for VCO)

MARKETING
Poor road condition Construction of farm-to DA, PCA,
in some key market roads LGU, DAR,
production areas DPWH
Inefficient marketing Establishment of marketing DTI, PCA,
of products database; conduct market PLGU
matching and product
promotion
Opportunities:
§ Some government agencies (DA, DAR, LGUs) implement road development
program
§ DTI, DA, PAgO and PTIEDO provides marketing assistance
§ Access market due to ASEAN integration
§ Untapped domestic and foreign markets
Availability of modern communication facilities for marketing of products (e-
commerce)
Weak organizations Strengthening of coconut PCA, DA, CDA
of coconut growers, farmers’ organizations
traders and through capacity building
processors
Opportunity:
DA, PCA, CDA and PAgO provides institutional support
Source: Focus group discussion and key informant interviews


Oil Page 48 of 61

SECTION 8: COMPETITIVENESS DIRECTIONS

Outcome / Impact

Industry Change Required Farmer Industry

Input Provision:
Adequate input support to farmers
High appreciation of GAP
Adequate
Adequate barangay extension workers
High yield

Production: Enhanced farming skills Globally competitive VCO products and

Improved road infrastructure prices
Sufficient working capital
Better quality VCO products
Increased adoption of production technology New market segments

Pest and disease free coconut farms Stable prices and markets of produce/

Absence of illegal cutting of coconut trees product Better distribution of profits among VC
players
Processing: Empowered farmers

Presence of modern machineries and
Value addition
equipment

High product quality of VCO

Presence of coconut by-product waste Increased Revenues

disposal/utilization facilities and equipment
Job Generation
Marketing: Increased Income

Improved road infrastructure More MSMEs established/operating
Reduced vulnerability to climate change
Efficient marketing of product
Reduced vulnerability to climate change
Liberalized market
Interfirm Relationship/Horizontal and Liberalized market

Vertical Linkages/Supply Chain Governance:

Strengthened organizations of coconut
growers, traders and processors
Figure 16. Synthesis of Competitive Vision

Oriental Mindoro Value Chain Analysis for Virgin Coconut Oil Page 49 of 61

SECTION 9: CONCLUSION AND RECOMMENDATIONS

There is a great challenge on the part of the province to take advantage of the increasing
demand for Virgin Coconut Oil both in local and foreign markets. Various players in the
value chain should be empowered particularly the farmers/producers of raw materials
for them to be alleviated from poverty. The government’s political will is vital in funding
holistic coconut productivity and profitability programs. These will provide a favorable
environment that will motivate the coconut farmers and other stakeholders to boost the
coconut industry.

In the local scenario, the province should also be capable of minimizing the adverse effect
of typhoons which has a direct effect on coconut production through provision of climate-
resilient coconut variety as discussed in the earlier section of this Value Chain Analysis
Report. This will ensure the sustainability of the VCO industry in the province.

The designation of Calapan City as MIMAROPA’s Regional Government Center,
implementation of the Strong Republic Nautical Highway and availability of
infrastructure and other facilities opened opportunities for the province’s socio-
economic growth.

The government agencies, private sector and other stakeholders have to continuously
collaborate and implement programs and projects that primarily focus on farmers’
welfare and development, value-adding, extension services and trade and market
development. Further, the issues and concerns that arise along the chain should be
addressed/resolved. These will result in the increase of coconut farmers’ annual income
from PhP50,000.00 to PhP100,000.00 in the next five years. It is also envisioned that two
coconut industrial hubs will be established by 2020.

With improved resiliency and attainment of higher coconut productivity in year 2016
onwards, the province can become MIMAROPA’s center of coconut production and agro-
industrialization.



ANNEX

Annex 1. Nursery Operators in Oriental Mindoro

Name of Nursery Owner Address Production Capacity
(pcs)
A.B. Escala Aurelio B. Escala San Antonio, Victoria 50,000 up
Corrines Garden Rufino Lumbres Little Tanauan, Roxas 100,000 up
NINALDINE Ronaldo D. Balbastro Banus, Gloria 50,000 up
Marietta Castillo Marietta Castillo Putican-Cabulo, Baco 50,000 up
Note: production capacity is on per order basis

Annex 2. List of Coconut Producers Cooperatives in Oriental Mindoro
Cooperative No. of Location Contact Person Contact No.
Members
Bigaan Agrarian Reform 48 Bigaan, San Teodoro Lurynith Fajutag 09287414087
Community Organization
(BARCO)
Calima Socio-Economic Multi- 197 Calima, Pola Nelia Fontecilla 09104800204
Purpose Cooperative
(CASEMPCO)

Annex 3. List of VCO Processors in Oriental Mindoro
Processor Location Contact Person Contact No.
All Coconut Organics Banus, Gloria Epehemio Buhian 09163198584
Company Limited
Bigaan Agrarian Reform Bigaan, San Lurynith Fajutag 09287414087
Community Organization Teodoro
(BARCO)
Calima Socio-Economic Calima, Pola Nelia Fontecilla 09104800204
Multi-Purpose Cooperative
(CASEMPCO)
Victoria’s Virgin Coconut Oil Pakyas, Victoria Victoria Peñaranda 09062539844

Annex 4. PCA Registered Coconut Traders (as of September 15, 2015)
NAME OF TRADERS OR NO. ADDRESS CERTIFICATE DATE OF CONTACT NO.
NO. REGISTRATION
Florencia Py 7516149 Tawiran, Calapan 0106358 1/5/2015 2887273
Florencia Py 7516147 Baco, Or. Mdo. 0106359 1/5/2015 2887273
Florencia Py 7516148 San Teodoro 0106360 1/5/2015 2887273
Alexander Magnaye 7516152 Pula, Pola 0139556 1/7/2015 09086612126
William Yap 7516156 Pob. Pola 0143329 1/6/2015 09282927924
Nestor S. Abe 7516157 Dulangan I, Baco 0143291 1/7/2015 09058350530
Analiza Villena 7516158 Dulangan II, Baco 0143322 1/7/2015 09057073700
Mary Joy Saron Eustaquio 7516162 San Mariano, Roxas 0128581 1/8/2015 09064738359
Leonisa Sibobo 7516163 Sabang, 0128606 1/8/2015 09476398101
Pinamalayan
Zenaida G. Sega 7516164 Sabang, 0143326 1/8/2015 09053354489
Pinamalayan
Nestor G. Bicua 7516165 Sabang, - 1/8/2015 -
Pinamalayan
Vic Jong Lumalang 7516166 Melgar B., Naujan 0106361 1/8/2015 09097111873
Armando Andasan 7516167 Pahilahan, Pola 0128572 1/8/2015 09498549442
Flor De Villa 7516168 Laguna, Naujan 0106348 1/8/2015 09192983710
Danilo Genteroy 7516169 Pob. 3, Victoria 0128666 1/9/2015 09085719028
Roger Sy 7516170 Socorro, Or. Mdo. 0128667 1/9/2015 09478303529
Nestor A. Maranan 7516171 Bato, Bansud 0128585 1/9/2015 0905933669

Celso D. Perez 7516172 Malamig, Gloria 0148173 1/9/2015 09161509310

Remegio Umali 7516173 Zone III, Socorro 0106373 1/9/2015 09216587439
Marissa D. Abarra 7516174 Ordovilla, Victoria 0148179 1/9/2015 09391465673
Epehemio M. Buhian 7516175 Banus, Gloria 0143313 1/9/2015 09064165059
Reynaldo Sadaba 7516178 Dalisay, Bansud 0127428 1/9/2015 09292230883
Virgilio A. Baculo 7516179 Concepcion, 0143316 1/9/2015 09495069410
Victoria
Mila Dimayacyac 7516180 Sta. Maria, Naujan 0139555 1/9/2015 09206137067
Manuel Quisiera 7516181 Mangangan I, Baco 0139575 1/12/2015 09197559052
Ronnie Aguilar 7516182 Sta. Rosa I, Baco 0106323 1/13/2015 09063524533
Santiago Ang 7516183 Mabini St., 0139567 1/13/2015 09189514660
Pinamalayan
Macario P. Ocampo 7516184 Calubasanhon, Pola 0109389 1/13/2015 09993738090
Daisy Eje 7516185 Mangangan I, Baco 0139553 1/13/2015 09163798702
Samuel Reyes 7516186 Cabalwa, Mansalay 0127456 1/13/2015 09067591153
Gerardo M. Mendoza 7516187 mAtungao, Socorro 0107106 1/13/2015 09186275113
Rebecca F. Fadallan 7516188 Bulaklakan, GLoria 0143327 1/13/2015 09103067301
Gloria L. Villanueva 7516190 Matulatula, Pola 0139598 1/19/2015 09073227475
Nonito F. Faz 7516191 Masaging, Naujan 0128284 1/13/2015 09194183380
Lita Gara 7516192 San Aquilino, Roxas 0127379 1/13/2015 09997098454
Exequiel/Jacinta Leuterio 7516193 M. Adriatico, GLoria 0106356 1/13/2015 09177993215
Alberto C. Beredo 7516194 Pob. Bansud 0127427 1/13/2015 09108690944
Lesila C. Muhi 7516195 Buong Lupa, Gloria 0143305 1/13/2015 09277520904
Rowena J. Nambio 7516196 Inclanay, Pina 0143293 1/13/2015 09479445888
Eduardo Amar 7516197 Manihala, Bansud 0127473 1/13/2015 09479511300
Abraham Calaluan 7516198 Bagongbayan, 0139569 1/13/2015 09176021444
Bongabong
Daisy A. Moncayo 7516199 Socorro, Or. Mdo. 0143330 1/14/2015 09293383056
Wilson Guno 7516200 Bagongbayan, 0128577 1/14/2015 09399387908
Bongabong
Joseph L. Lascano 7516201 Monteverde, 0107108 1/14/2015 09132066265
Socorro
Arturo L. Oracion 7516202 Malamig, Gloria 0143298 1/14/2015 09265279650
Gemma Montillana 7516203 Pob. III, Naujan 0143319 1/14/2015 09078998056
Mamerto Camigas 7516205 Mulawin, Naujan 0139571 1/14/2015
Leonardo/Rowena Viana 7516208 Mulawin, Naujan 0148205 1/14/2015 09051781908
Gregorio Evangelista 7516209 Dulangan II, Baco 0143331 1/14/2015 09152217369
Sharon E. Roldan 7516210 Catuwiran II, Baco 0143312 1/14/2015 09088178891
Bruno Padre 7516212 Pob. I, Victoria 0139561 1/14/2015 09205097857
Aldino S. Guevarra 7516213 Banus, Gloria 0131590 1/14/2015
Merly Ella 7516215 Lumangbayan, Sn 0139590 1/15/2015
Tdo
Doroteo Delica 7516216 Villa Pag-asa, 0127438 1/15/2015 09216062327
Bansud
Marilyn Lumanglas 7516217 Aurora, Naujan 1/15/2015
Teodoro Frago 7516218 Villa Pag-asa, 0139573 1/15/2015 09199568742
Bansud
Noly De Roma 7516219 Ilaya, Calapan 0143333 1/15/2015 09328881577
Cornelia Evangelista 7516220 Mayabig, Baco 0106307 1/15/2015 09396043870
Delmar Nole M. 7516221 Pasi I, Socorro 0153820 1/15/2015 09474903856
Magculang
Thelma A. Cruzat 7516222 Fortuna, Socorro 0143314 1/15/2015 09287861324
Amie C. Capadocia 7516223 Baco, Or. Mdo. 0143332 1/15/2015 09082018345
Oscar Ng Tsai 7516224 Camilmil, Calapan 0106351 1/15/2015 2862427
Julmer P. Baja 7516225 Leuteboro I, 0148204 1/15/2015 09996635532
Socorro

Roger Melgar 7516226 Villa Pag-asa, 0143315 1/16/2015

bansud
Jaime R. Yu 7516227 Casiligan Pola 0148193 1/16/2015 09093583123
Lalaine P. Macalintal 7516229 Malibago, Pola 0148199 1/16/2015
Ramil G. Pelaez 7516230 Subaan, Socorro 0128651 1/16/2015 09286367954
Nora D. Mendez 7516232 Maluanluan, Pola 1/16/2015
Jomar Marasigan 7516233 Aurora, Naujan 0128514 1/16/2015 09365100932
Rynard S. Bayeta 7516234 Tawas, Bongabong 0148207 1/16/2015 09273616488
Julia M. Loren 7516235 Nabuslot 0143176 1/16/2015 09082146119
Pinamalayan
Violeta M. Silang 7516237 Alcate, Victoria 0143295 1/16/2015 0939966381
Arnel P. Reyla 7516238 Maluanluan, Pola 0128308 1/19/2015 09399351468
Cenon A. Vidal 7516239 San Jose, 1/19/2015
Bongabong
Rosita Rada 7516240 Villa Pag-asa, 0139579 1/19/2015 09395284396
Bansud
Arlyn G. Maranan 7516241 Socorro, Or. Mdo. 0153786 1/19/2015 09092918364
Benjamin Alcantara 7516242 Socorro, Or. Mdo. 0106354 1/19/2015 09088883974
Abelardo De Belen 7516243 Fortuna, Socorro 0143318 1/19/2015 09214307593
Amelita Sotto 7516244 Mina de Oro 0148172 1/19/2015 09205911620
Bongabong
Harold G. Aguilar 7516245 Sta. Rosa, Baco 0148172 1/19/2015 09205911620
Alvin M. Sopera (New) 7516246 Bulaklakan, Gloria 1/19/2015
Milagros Bautista 7516249 Mulawin, Naujan 0139586 1/19/2015 0935757464
Andres Famorcan 7516250 Batuhan, Pola 1/19/2015
Joel D. Manalo 7516252 San Antonio, Gloria 0148177 1/19/2015
Vilma Macatangay 7516254 Pola, Or. Mdo. 0143306 1/19/2015 09993847573
Marnel G. Rios 7516255 Hagan, Bongabong 0128605 1/20/2015 09154181161
Danilo Aspecto 7516260 Calsapa, San 0106366 1/20/2015 09983070299
Teodoro
Brigido Lucero 7516261 Matungao, Socorro 0127408 1/20/2015 09184805068
Melicio Gelera 7516262 Villa Pag-asa, 0148185 1/20/2015 09474727339
Bansud
Jesie P. Cordero 7516263 Malayong, Gloria 0143294 1/21/2015 09475213307
Arlene M. Gado 7516264 Lisap, Bongabong 0143290 1/21/2015 09067762952
Frederick C. Arona 7516265 Dulangan, Puerto 0143192 1/21/2015 0906662001
GLa
Roman H. Grangos 7516266 Gutad, Calapan 0153787 1/21/2015 09085466254
Genalyn S. Cerezo 7516267 Maluanluan, Pola 0133559 1/21/2015 09094777907
Ruel M. Calingasan 7516268 Villa Pag-asa, 0148211 1/21/2015
Bansud
Dolores M. Carandang 7516269 Maluanluan, Pola 1/21/2015
Ryan S. Moreno 7516270 Antipolo, Naujan 0154093 1/21/2015
Fe C. Tusing 7516272 Bayanan, Baco 0139566 1/21/2015 09491604064
Joseph Sapungan 7516273 Alcate, Victoria 0139563 1/21/2015 09082131245
Aurelio Baluyot 7516274 Bongabong, Or. 0148265 1/21/2015 09096646271
Mdo.
Arsenia A De Chosa 7516275 Pob I, Victoria 0143300 1/22/2015
Rene A. Clara 7516276 Lumangbayan, Baco 0154086 1/22/2015 09102738082
Blmc Odelon H. 7516277 Pob. Bansud, Or. 0148188 1/22/2015 09985451349
Macalindong Mdo.
Ricardo B. Hidalgo 7516278 Pob. Baco, Or. Mdo. 0148182 1/22/2015 09081561607
John D. Guyo 7516279 Panikihan, Pola 0139577 1/22/2015 09477849031
Familara Gen. Merch. 7516281 Orminter, Calapan 0143304 1/23/2015 09267779861
Ailen F. Lumanglas
Rolando C. Delica 7516282 Marayos, 0148183 1/23/2015 09212681992
PInamalayan

Galicano Blanco 7516285 Inclanay, 0148170 1/23/2015 09998156465

Pinamalayan
Rosita Rico 7516286 Calangatan, San 1/23/2015 09395284396
Tdo.
Ema Mutya 7516287 Catiningan, Socorro 0153788 1/23/2015 09178692794
Avelino Dimacuha 7516288 Malo, Bansud, 0148201 1/26/2015 09497477920
Mamerto De Castro 7516289 Sta. Cruz, 0092347 1/26/2015 09283750080
Bongabong
Lita Chua 7516291 Balatero, Pto. Galera 0127422 1/26/2015 0432873345
Romeo Loto 7516292 Fortuna, Socorro 0143309 1/26/2015 09293638602
Allison H. Garcia 7516294 Bayanan, Pola, Or. 0153790 1/26/2015
Mdo
Marilou Najito 7516296 Dulangan II, Baco 0153791 1/27/2015 09275248353
Leonardo De Guzman 7516297 Bagongbayan, 0153826 1/27/2015 09195960663
Bongabong
Carmelita Aguilar 7516298 Sta. Rosa I, Baco 0139571 1/27/2015 09497370106
Felipe Almarez 7516300 Bagongbayan II, 0139557 1/28/2015
Bongabong
Francisco Baltazar 7516302 Evangelista, Naujan 0128297 1/28/2015
Gloria D. Manalo 7516303 Dulangan II, Baco 0153806 1/28/2015 09361951353
Antonio P. Ditaunon 7516304 Proper, Bansud 1/28/2015
Alicia Manalo 7516305 Pob. Bongabong 0106368 1/28/2015 0432835056
Eleoterio Y. Marasigan 7516306 Forman, Bongabong 0128573 1/28/2015 09394557289
Hermie T. Luci 7516307 Alcate, Victoria 0153793 1/28/2015 09476493023
Erwin Acuzar 7516308 San Isidro, 0153814 1/28/2015 09494720083
Bongabong
Ronelo V. De Luna 7516309 Malamig, Gloria 0139581 1/28/2015 09165385452
Wilfredo Mendoza 7516310 San Isidro, 0106349 1/29/2015 09182140327
Bongabong
Felicidad R. Amorosa 7516311 Alma Villa, Gloria 0153795 1/29/2015 09159672278
Reynante Grangos (New) 7516314 Fortuna, Socorro 1/29/2015
Eddie Barrion 7516315 Calubasanhon, Pola 0153796 1/29/2015 09297900816
Pablito Familara 7516316 Malvar Naujan 0153797 1/29/2015 09267779861
Benjamin Dujon 7516317 Wawa, Pinamalayan 0127464 1/29/2015 2867252
Jonathan King 7516318 Marfrancisco, 0153798 1/29/2015 2867252
PInamalayan
Job L. Manalon 7516319 San Aquilino, Roxas 1/29/2015
Joel De Mesa 7516321 Pob. Bansud 0143317 1/30/2015 09197327910
Elnardo B. Gerance 7516322 Fortuna, Socorro 0143296 1/30/2015 09085944635
Adrian Sotto/ Amelita 7516323 Mina de Oro, Bong. 0153813 1/30/2015 09056777527
Sotto
Mara Mendoza 7516324 Rosa Cara, Bansud 0148186 1/30/2015 09983411590
Leo G. Villajuan 7516325 Tacligan, San 0127475 1/30/2015 09176707324
Teodoro
Alejandro D. Bangalisan 7516326 Villa Pag-asa, 0148196 1/30/2015 09083828439
Bansud
Larry Cruz 7516327 Pob. Socorro 0106371 1/30/2015 09998495715
Joy Marsona Aypa 7516329 Pob. Pto. Galera 0148200 2/2/2015 09107720514
Maria Dorie Tabelisima 7516330 Socorro. Or. Mdo 0128290 2/2/2015 09107444522
Marcelo A. Catubay 7516331 Malo, Bansud 0153799 2/2/2015 09282548366
Cesar Ambat 7516332 Bagongbayan, Bong 2/2/2015
Rodrigo L. Escobilla 7516334 Zone III, Socorro 0153800 2/2/2015 09298202645
Julian G. Dalisay 7516335 Formon, Bongabong 0127430 2/2/2015 09217183978
Edmar S. Sager 7516337 Sta. Cruz, 2/2/2015
Bongabong
Jojie M. Pestin 7516340 Bancuro, Naujan 0153810 2/2/2015 09469353728
Nobella M. Estrope 7516342 Sigange, Bongabong 0139585 2/2/2015 09369778527

Gregorio Alcones 7516343 Sta. Rosa I, Baco 0139565 2/3/2015 09085941680

Jerome Fontarum 7516344 Calima, Pola 0153804 2/3/2015 09982768242
Remelyn Manzano 7516345 Bongabong 0154109 2/3/2015 09354007179
Guillermo Dimacuha 7516346 Villa Pag-asa, 2/3/2015 09215466563
bansud
Victoria B. Anthony 7516347 Luna, Bongabong 2/3/2015 09174164233
Rynard Bayeta 7516349 Tawas, Bongabong 0148207 2/4/2015 09273616488
Sandro Dimalpilis 7516350 Maluanluan, Pola 0139570 2/4/2015 09219989269
Neneth P. Gaba 7516352 Melgar B, Naujan 0128578 2/5/2015 09399037210
(Padrilan’s Copra Trad.)
Eufricino Fetalco 7516353 Madugo, Roxas 0153807 2/5/2015 09194724398
Rosenie R. Castillo 7516354 Zone IV, Socorro 0153808 2/5/2015 09182791177
Reynaldo Abel 7516355 Subaan, Socorro 0153818 2/6/2015 N/A
Frederick Ortega 7516356 Pob. Victoria, 2/6/2015 09494786502
Pilar Macalalad 7516359 Evangelista, Naujan 0154097 2/9/2015 09167737753
Jojie Pestin 7516360 Bancuro, Naujan 0153810 02/9/2015 09469353728
Alex G. Manalo 7516361 Hagupit, Bongabong 0148195 02/9/2015 09054178483
Delmar Nole Magculang 7516362 Pasi I, Socorro 0153820 2/9/2015 09474903856
Jomer C, Lusterio 7516363 Maluanluan, Pola 0153811 02/9/2015 09469665608
Lloyd De Guzman 7516364 Fortuna, Socorro 0139554 2/9/2015 09997089922
Rosita Amparo 7516369 Bato, Bansud 0154121 2/9/2015 09473400764
Normita Quindoza 7516373 Bagumbayan I, 0148171 2/11/2015 09478444926
Bbong
Arnold Barcelona 7516375 Conranzon, Bansud 0154120 2/11/2015 09289889532
Avelino Herrera 7516377 San Agustin, Naujan 2/11/2015
Jimmy Maranan 7516379 Bato, Bansud 0153817 2/13/2015 09097094978
Romana Baes 7516381 Miaje, Bongabong 2/13/2015
Dennis B. Casao 7516382 Tawas, Bongabong 0153819 2/13/2015 09179286986
Alex F. Dime 7516384 Loyal, Victoria 0153821 2/16/2015 09086952110
Noly F. Segarang 7516385 San Miguel, Roxas 0153822 2/16/2015 09216983852
Nimrod F. Yagaya 7516389 Concepcion, 2/17/2015
Romblon
Rene A. Clara 7516391 Lumangbayan, Baco 0154086 2/18/2015 09102738082
Leonimer Vitto 7516394 Inclanay, 0154115 2/23/2015 09217292999
Pinamalyan
Ernesto Wagan 7516395 Socorro, Or. Mdo. 0153829 2/23/2015 09293299606
Alberto Galan 7516396 Conranzon, Bansud 0153830 2/24/2015 09104317625
Gerardo Fajardo 7516400 Mulawin, Naujan 0153834 2/24/2015 09351928768
Severino Frago 7516403 Bongabong, Or. 2/24/2015
Mdo.
Junita M. Atienza 7516405 Labasan, 0139597 2/24/2015 0432885558
Bongabong
Angelon Joseph F. Mojica 7516407 Lisap, Bongabong 0143299 2/27/2015 09298239045
Evelyn B. Anchita 7516411 Sta. Rosa II, Baco 0154107 3/3/2015 09085720392
Allan E. Hugo 7516412 Maluanluan, Pola 0143307 3/3/2015
Mateo Villanueva 7516413 Leido, Victoria 0148184 3/3/2015 09178866478
Pilar Catapang 7516414 Mulawin, Naujan 3/4/2015
Mitchelle Quisierra 7516418 Pob., Baco, Or. Mdo. 0148268 3/6/2015
Adolfo Mangubat 7516422 Fortuna, Socorro 0154117 3/9/2015 09391419238
Amancio M. Apolinario 7516425 Villa Pag-asa, 0148189 3/9/2015 09214241412
Bansud
Gloria B. Velasquez 7516434 Luna, Bongabong 0154088 3/12/2015 09109751594
Julius M. Ical 7516436 Baco, Or. Mdo. 0154095 3/12/2015 09219737591
Dolores Sadiwa 7516438 Sta. Cruz, 0154090 3/16/2015 09197740718
Bongabong
Eladio Magadia 7516444 Banus, Gloria 3/17/2015
Roberto Manayao 7516449 La Fortuna, Socorro 0154099 3/20/2015 09196388577

Crisostomo Magpantay 7516465 San Isidro, 0154103 3/26/2015

Bongabong
Edna Castillo 7516470 Ilaya, Cal. City 0154105 3/30/2015 09498476149
Mercedes R. Lucero 7516471 Leuteboro II, 0154106 3/30/2015 09184452698
Socorro
Eustacia C. Gacilo 7516472 San Roque, 3/30/2015 09479250484
Bulalacao
Jay Japhet Mutya 7516488 Maragooc, Gloria 0154112 4/17/2015
Orly L. De Mesa 7516491 M. Adriatico, Gloria 0154113 4/20/2015 09369824394
Adeline Par 7516510 Mansalay, Or. Mdo 5/7/2015
Oliver Tulalay 7516547 Aurora, Naujan, 0154125 6/2/2015 09363013164
Pastor Caguete 7516590 Baco, Or. Mdo. 0154131 7/2/2015 09176022100
Leonilo Gacote 7516593 Bansud, Or. Mdo. 0154131 7/3/2015
Pedro Lobrin Gamo 7519101 Bambanin, Victoria 0154133 7/14/2015 09095747216
Norma Mangaring 7519102 Banus, Gloria 0154134 7/14/2015 09093045925
Christian Anonuevo 7519114 Sapul, Calapan City 0154135 7/24/2015 09214721157
Remedios Garganta 7519136 Sta. Brigida, 0162638 8/7/2015 09087670037
Mansala
Analyn P. Quilao 7519169 Alcate, Victoria 0162643 9/2/2015 09182314952
Hernando M. Fetalvero 7519177 Calingag 0162644 9/9/2015
Pinamalayan
Elyfel S. Surposa 7519181 Villa Pag-asa, 0162645 9/15/2015 09497874363
Bansud

Annex 4. Focus Group Discussion with Coconut Farmers, Traders and Processors held on
06 October 2015 at Halcon Hall, Provincial Capitol Complex, Calapan City


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Value

Chain Analysis for

SECTION 2: OVERVIEW OF THE INDUSTRY

4. Hair care products

The fresh-dry process involves the following procedural steps:

Table 1. Production Performance of Top 5 Coconut Producing Countries, 2010-2014

situation already needed the declaration of a state of calamity in CALABARZON and

Coconut Production by Municipality in Oriental Mindoro

Figure 6. Area Planted to Coconut by Municipality, Oriental Mindoro, 2014

0 2,000 4,000 6,000 8,000 10,000

Table 5. Wholenut Production and Estimated Volume of VCO Production by Municipality,

SECTION 3: NATURE AND STRUCTURE OF THE INDUSTRY

Oriental Mindoro Value Chain Analysis for Virgin Coconut

On the other hand, assemblers/consolidators/traders transact business independently

A. PRICE AND COST STRUCTURE

Table 11. Analysis of Processes used in Oriental Mindoro

Product assumption is based on existing coconut plantation.

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Product assumption is based on existing coconut plantation.

SECTION 4: MARKETS AND MARKET OPPORTUNITIES

Figure 14. Non-traditional exports of the Philippines, 2010-2012

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Gas Liquid Chromatography (GLC) ranges of Fatty Acid Component

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Figure 15. Visualization of Geographic Flow of VCO in Oriental Mindoro

SECTION 5. SUPPORT SERVICES

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Institution Services Provided

Oriental Mindoro Value Chain Analysis for Virgin Coconut

SECTION 6: ENABLING ENVIRONMENT

An Act Providing for the Regulation of the

This serves as guidelines of Philippine

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Circular/ Orders Subject Coverage

BAFPS, as mandated, is the governing

Revised Rules and

An act to strengthen the food safety

Oriental Mindoro Value Chain Analysis for Virgin Coconut

3. Adyawan Festival in San Teodoro is celebrated every December 8 to highlight the

Oriental Mindoro Value Chain Analysis for Virgin Coconut

SECTION 7: CONSTRAINTS AND OPPORTUNITIES

Oriental Mindoro Value Chain Analysis for Virgin Coconut

Insufficient extension Hiring/capacitating of PCA, private firms (eg., VCO

§ Presence of technology for processing of coconut water

Oriental Mindoro Value Chain Analysis for Virgin Coconut

SECTION 8: COMPETITIVENESS DIRECTIONS

SECTION 9: CONCLUSION AND RECOMMENDATIONS

Annex 1. Nursery Operators in Oriental Mindoro

Celso D. Perez 7516172 Malamig, Gloria 0148173 1/9/2015 09161509310

Roger Melgar 7516226 Villa Pag-asa, 0143315 1/16/2015

Galicano Blanco 7516285 Inclanay, 0148170 1/23/2015 09998156465

Gregorio Alcones 7516343 Sta. Rosa I, Baco 0139565 2/3/2015 09085941680

Crisostomo Magpantay 7516465 San Isidro, 0154103 3/26/2015

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