PHILIPPINE MANGO SEED OIL

21 June 2011

INTRODUCTION
Philippine mango is one of the finest and the sweetest in the world and is the countrys third most important fruit crop. The Philippines is one of the largest mango producing countries based on agricultural export volume and value, with a reported export of 20,114 metric tons of fresh mangoes in 2010. Production & exports (MT)
Year Production Exports 2004 967,473 33,663 2005 984,342 31,269 2006 919,030 26,170 2007 1,023,907 26,338 2008 884,011 20,845 2009 771,141 20,420 2010 825,423 20,114 Source: Bureau of Agricultural Statistics

About 93% of production is consumed locally. Of this proportion, it is estimated that 75% are consumed as fresh fruit and 25% are processed into various product forms. The mango-processing sector produces various forms of mango products such as mango puree, mango juice, dried mangoes, mango concentrates, frozen mangoes, mango glaze, edible parts, mango in brine and mango preserves. Dried mango exports reached 1,028 MT valued at $7.475 million, while processed mango exports totaled 11,334 MT valued at $13.684 million in 2008. The peel and seed of the mango comprise 50 percent of the fruit and these are just discarded after separating the flesh. The kernel makes up 75% of the seed weight and an average mango kernel contains about 8% to 15% extract potential (butter and oil). Mango kernel oil is pale yellow in colour. The fatty acid composition varies with both variety and the climatic conditions where the mango is grown. Typical values are:
Palmitic acid Stearic acid Oleic acid 5.1-8.0% 42-48% 35-42%

It has been estimated that in India alone some 30,000 tons of oil could be extracted from 4 million tons of the total annual harvest of 7 million tons. Some mango kernel oil has been commercially extracted in India with 150 tons being exported in 1976 rising to 850 tons in 1978.

MARKET OPPORTUNITY
Growing sector of processed product Processed mango produce continue to grow relative to the fresh category in terms of quality and quantity. The residue of mango processing industries, the seed in particular, is not being utilized to its full commercial potential. With the increase in processed mango produce, raw materials (i.e. seed) are abundant. Mango seed oil can be turned into a high value product which can be used in the cosmetics industry.

Industry Studies Department Board of Investments

PHILIPPINE MANGO SEED OIL

21 June 2011

Global demand Up to 3% to 12% of mango kernel oil is generally used in manufacturing companies of mango-based lotions, creams, balms, soaps and hair conditioners. Oil is commercially extracted from the kernels in India and finds use as a cocoa butter substitute. The cake remaining after oil extraction is used in animal feed. Mango kernel oil is presently being developed for medicinal use and in preparation of food items like confectionery.

PHILIPPINE ADVANTAGE
Natural resources Fresh mangoes are abundant in the country. Thus, there is an abundant supply of mango seed especially from fruit processing plants. Since seeds are considered product wastes, they are generally cheaper. Raw Materials Mango seed from mango farms and processing plants Hexane Packaging material

Technology that support the industry Process used is manual, semi-mechanized and mechanized systems using internationally designed and fabricated production units.

Process Manufacturing - It needs to be mentioned that the raw materials are not available for the product to be manufactured on a round the year basis and hence, this should at best be a seasonal activity. Pre-Treatment - Mango stones have to be dried, usually in the sun, so reducing the kernel moisture content from about 48% to 13. After drying the stones are decorticated, usually by hand. Oil Extraction - In India, prior to oil extraction, the mango kernels are sieved to remove foreign matter and broken in a hammer mill. The broken kernels are further reduced in size by use of a roller breaker. The material is heated to soften it and finally fed to flaking rollers. - Oil is extracted from the mango kernels by solvent extraction process. The kernels are prepared to make it easy for the solvent to permeate the oil content. The prepared raw material is sprayed with hexane which dissolves the oil. The resulting solution is then distilled in a vacuum to separate the oil.

Industry Studies Department Board of Investments

PHILIPPINE MANGO SEED OIL

21 June 2011

Plant, machinery & equipment 1. 2. 3. 4. 5. 6. 7. 8. Driers Decorticators Hammer mills Roller mills Solvent extraction plant Preparatory section equipment Main extraction plant Main finishing section equipment

Support industries/infrastructure Contract growing arrangement with farmers to ensure continuous supply of raw materials and maximize the volume of production as well as support farmers growth Availability of post harvest handling and storage facilities through the implementation of the Philippine National Cold Chain and Tramline Program by the Department of Agriculture Establishment of three cold chain facilities in three major producing areas: Benguet, Cebu, Bukidnon

Human resources The country being an agricultural country has many readily available plant workers. Man Power Requirement: 45

GOVERNMENT SUPPORT
Enabling laws/policies Food, Drugs and Devises and Cosmetics Act Agriculture and Fisheries Modernization Act Philippine Export Development Plan 2008-2010 High- Value Crops Development Act Support from government/academe Presence of an ongoing study on Biotechnological Production of High Value Products from Wastes of Mango Processing Industry which includes the following studies: - Enzymatic extraction of essential oils from mango peels - Extraction and characterization of phenolic antioxidant (mangiferin) from mango seed / peel - Sensory, chemical, microbiological and stability testing of biotechnologically-produced food and non-food products from mango seed/peel The Agricultural Credit Policy Council (ACPC) reviews all credit facilities available to growers, processors and exporters in order to better address their funding requirements and upgrade their facilities to meet GMP,HACCP,ISO and other quality assurance standards. Presence of dynamic industry associations: - Philippine Food Processors and Exporters Organization, Inc. focuses on planning, development and sourcing of raw materials, improvement of manufacturing efficiency and productivity, promotion of sound trade practices, among others. - Philippine Exporters Confederation, Inc. is mandated to strengthen the countrys export industry through its export promotion and development programs.

Industry Studies Department Board of Investments

PHILIPPINE MANGO SEED OIL

21 June 2011

Development plans and programs DA Ginintuang Ani-High Value Commercial Crop (GMA-HVCC) Program a program created to address the priority concerns on food security and poverty alleviation. Components of the program are: 1. Policy reform, market development and promotion ; 2. Infrastructure Support; 3. Investments and financing ; 4. Technology development, training, extension, communication support; 5. Program advocacy, information networking and dissemination . Two major legislations passed will accelerate the achievement of the objectives of the program. These are: a.) R.A. 7900 or the High-Value Crops Development Act which promotes the production and marketing of high value crops by providing $1B fund allocation for credit. Proponents of the program are also entitled to incentives and b.) R.A. 8435 or the Agriculture and Fisheries Modernization Act.

Ideal locations
Most processing plants, where seed oil can be sourced, are located in the National Capital Region, Region III, Region IV and Region VII

R&D Support Research and Development support from the Department of Science and Technology (DOST), particularly the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development (PCARRD) and Industrial Technology and Development Institute (ITDI). PCARRD has been in the forefront of setting up the Mango Information Network (MIN), which provides information and updates on all aspects of the mango industry

INDUSTRY PLAYERS
Raw material suppliers NCR - Fruitgems Agricultural Corporation - Tem Ngun Food Corporation - Kian Sun International Corporation - Agrinurture, Inc. (formerly Mabuhay 2000 Enterprises, Inc.) - Cebu Legacy Marketing Corporation - A & P Foods Corporation - Harman Foods, Inc. Mango Juices - Ramed Food Manufacturing, Inc. - Soyuz Foods International Inc. - XTC, Incorporated - Hi-Las Marketing Corp. Region 3 - Bulacan-Batangas Food Specialties - Agri-Fruit Freezing Corp. - Drupe Int'l. Inc. -

Industry Studies Department Board of Investments

PHILIPPINE MANGO SEED OIL

21 June 2011

Region 4- A - Amira International Trading - KLT Fruits Inc. - Don Roberto's Winery Corporation Region 6 - Guimaras Fruits Processing Plant (GFPP) - MC Nester Food Products Region 7 - Divent Corporation - Jojos Food Products - Profoods International Corporation - R & M Preserves - 7D Food International, Inc. (Cebu) - Cebu Legacy Marketing Corp. (Cebu) Region 9 - Polyfruits, Inc. Region 10 - Motherland Food Products ARMM - Kiwalans Food Products Potential Manufacturers Local Avon Cosmetics Inc. Beuache International by Conchita Inc. Central Affirmative Co. Inc. Cherry Laboratory Inc. Chic Centre Corporation Christian Cosmetic Science Co. Colgate Palmolive Phil. Cosmetique Asia Corp. Fuller Life Direct Selling Phils. Goldwing Mfg. Corp. Green Cross Inc. GV Cosmetics HBC Incorporated International Pharmaceuticals Inc. Johnson & Johnson Phils. Juvic Incorporated Lamoiyan Corporation Lean Processes Inc. Marklene Fabricate Corp. Most High Intertrade Inc. Oro Laboratories Pagoda Philippines Procter & Gamble Phils. Rainiers Research Deve Institute Inc. Raychem Enterprises RDL Laboratories Sanofi-Aventis Phils. Inc. Sara Lee Phils. Inc. SCC Innovasia Inc. Sensea International Inc. Silk Skin Beauty Care Corp. Splash Corp. The Rogemson Co. Inc. Unilever Phils. Inc. Vibelle Manufacturing Corp. Vibrant Manufacturing Corp. Inc.

International JarChem Industries Inc. is a global supplier of emerging and unique specialty chemicals. Jarchem products have become fixtures in the cosmetics, pharmaceuticals, nutrition and food, adhesives and coatings, and polymers industries.
Industry Studies Department Board of Investments 5

PHILIPPINE MANGO SEED OIL

21 June 2011

California Mango Hand & Body Care Products are unique in the world of manicuring. Born as an overall hand & body treatment line, California Mango has achieved a high level of popularity by meeting the need for superior cleansing, moisturizing and exfoliating products. Combining nature's best essential oils & vitamins with the newest four phase manufacturing process for purity and consistency, California Mango is one of the few companies in the personal care industry that manufactures its own products. The list of cosmetic products below is a selection of the most requested cosmetics that contain the ingredient Mangifera Indica Seed Oil. Alienor Lippenstifte Mit Pflegewirkung Aubrey Organics Island Naturals Replenishing Shampoo Body Shop Shower Gel Mango Clivia Handcare Cremeseife Dr. Hauschka Aufbaumaske Janssen Day Care + Pcm Complex Jubian Kokos-Kakao Krpercreme Jubian Krpercreme Kokos-Kakao Lavera Basis Sensitiv (Lippenbalsam) Lavera Abdeckstift Young Faces (Bio-Minze) Lavera Mangomilch-Haarsplung Lavera Faces Balancecreme Lush The Soft Touch Lush Each Peach Massagebutter Lush You'Ve Been Mangoed Neways Extra Gentle Cleanser Oceanpharma Skinicer Repair Serum St Barth Lait Dmaquillant Au Frangipanier Tahitian Noni Moa Body Souffle / Feuchtigkeitsspendende Krperemulsion Watsons Hand Cream Papaya Mango

Mango Oil Extraction Companies

Mango oil extraction technology is still under development and has not yet been launched in the Philippines. However, the following international companies are involved in the extraction, manufacture and distribution (*also in the Philippines) of mango seed oil: Aum Consultancy Pvt. Ltd (Chennai, India) BioChemica Internation, Inc. (Florida, USA) Enfield Agrobase Ltd. (Chennai, India) Jeen International Corporation (New Jersey, USA)* Manorama Industries Pvt. Ltd. (Chattisgarh, India) Nanjing Chemlin Chemical Co., Ltd (Mainland China) Oil Seed Extractions (Ashburton, New Zealand) Protameen Chemicals Inc. (USA)* Quadra Chemicals (Canada)

INCENTIVES
Industry Studies Department Board of Investments 6

PHILIPPINE MANGO SEED OIL

21 June 2011

Fiscal Incentives 4 to 8 years Income Tax Holiday (ITH); Special 5% tax rate on gross income after the lapse of ITH (for Eco-zone locators) Tax and duty exemption on imported capital equipment (for Eco-zone locators) Duty-free importation of capital equipment and inputs for primary processing (under R.A. 8435 or the Agriculture and Fishery Modernization Act) Tax credit on raw materials, supplies and semi manufacture of export products and forming part Additional deduction for labor expense (ADLE) equivalent to fifty percent (50%) of the wages of additional skilled and unskilled workers Non-fiscal Incentives Unrestricted use of consigned equipment; Exemption from wharfage dues and export tax, duty, impost and fees; Employment of foreign nationals; Special Investors Resident Visa Under the High-Value Crops Development Act Crop insurance Credit assistance Grace period on lease of government lands payment Tax exemptions Market linkage Technical and infrastructure support Post Harvest facilities Good seeds and planting materials COST OF DOING BUSINESS

Project cost A. Fixed Capital Land & Building Plant & Machinery B. Working Capital (per month) Raw Material & Packing Utilities Salary & wages Other expenses Total (A+B) Cost of production per annum Indian Rupees
Industry Studies Department Board of Investments 7

Indian Rupees converted to Pesos Rented 6,980,415.59 6,980,415.59 1,196,642.67 99,720.22 99,720.22 49,860.11 1,445,943.23 8,426,358.82

PHILIPPINE MANGO SEED OIL

21 June 2011

converted to Pesos Raw materials etc. (for 6 months) Depreciation on machinery Interest on investment 8,675,659.38 698,041.56 548,461.23 9,922,162.16

Profitability Sales turnover Operating expenses Annual profit Percentage of profit on investment P11,966,426.73 P9,922,162.16 P2,493,005.57 27%

Annual Production capacity : It is envisaged to produce goods worth P11,966,426.73 Labor cost/Salaries and wages (per day) NCR Php 345.00 Regions/Provinces Php 202.00 255.00 Rentals, lease, acquisition (per month) Commercial space lease US$2.09.0/ sq.m. Office space rental NCR: US$10-12/ sq.m.; Regional/Provincial: US$5-6/ sq.m. Within an economic zone lease of lots US$0.40/ sq.m. Lease of buildings US$1.0/ sq.m.

CONTACTS
Board of Investments (BOI) Industry & Investments Building 385 Sen. Gil J. Puyat Avenue Makati City 1200 Philippines Tel. no.: (632) 890-1332 or (632) 895-3641 Website: http://www.boi.gov.ph Bureau of Agricultural Research (BAR) RDMIC Building, Visayas Ave. cor. Elliptical Road, Diliman Quezon City, PHILIPPINES 1104 Phone: +63 2 928-8624 Fax: +63 2 927-5691 Chamber of Cosmetics Industry of the Philippines (CCIP) Room 203 Mega State Building 737 G. Araneta Avenue cor. Agno Extension Quezon City, Philippines 1100 Telefax: ( +632 ) 743-5825 / ( +632 ) 743-3897 Mobile: ( +63 ) 919 7038860 Email Address : ccipsecretariat@pldtdsl.net

Industry Studies Department Board of Investments