BUSINESS & INVESTMENT

OPPORTUNITIES FOR
BAMBOO

2 October 2012
World Trade Center Metro Manila

Presentation Outline
The Bamboo Industry Profile
World Bamboo Industry Situation
Status of the Philippine Bamboo Industry

Challenges & Business Opportunities

Strategic Responses

Why Invest in Bamboo?

Great global demand; international
market value now 10B US dollars
Low capital investment for many
products
Fast growing; renewable; environment
friendly
Technologies available
Land available for pole production

The bamboo industry

in brief...

The global demand

Bamboo Markets are
classified into
Traditional:

Emerging:

Handicrafts
Blinds
Bamboo
shoots

Flooring
Laminated
furniture
Construction
materials

World Demand for Bamboo &

Bambooable Products
57,000

Size of Current
World Market
(USD Millions)

Bamboo &
Bambooable
products

27,000
14,000

390
Chop
sticks

1,200

1,500

3,100

6,000

6,500

Activated Bamboo Charcoal Bamboo & BJC

Carbon Shoots
Rattan
Handicrafts

10000

Blinds

Wood
Wood
Flooring Panels

Wood
Furniture

3,000

World Now USD7Bn

Size of Current
Bamboo Markets
(USD Millions)
1,500

1,100
500

300
20
Chop
sticks

60

100

BuildersBlinds Wood
Activated Bamboo Charcoal Bamboo
Flooring
Handicrafts Joinery &
Carbon Shoots
carpentry

*Intl. Finance Corp., Mekong Private Sector Devt. Facility(2007), OXFAM Intl.

200
Wood Wood
Panels Furniture

global demand, cont

Global traded
bamboo products
averaged
USD 1.49B
in 2007-2010

Bamboo world demand

is expected to grow to
USD1520B by 2015
45% of the total bamboo
market will be accounted
for by emerging products.
Traditional products will
grow, but not as fast as
the emerging products

China is the top

exporter with a
share of 46%

global demand, cont

The major markets for
bamboo products are:

European Union
United States
Japan
Canada
China
Singapore
South Korea
Malaysia
Mexico
Australia

Source: INBAR 2007-2010

About 57% of
imports are
bamboo flooring
and baskets

The USA is the largest

Western consumer of
bamboo, with annual
imports of almost
US$300 million of
bamboo
products,
95% of which come
from China.

Phl bamboo industry

as a glance...

Phl Bamboo Export

Export Market are:
EU-27, USA, Japan,
Canada, China,
Singapore, Australia,
Republic of Korea,
Switzerland, Russia,
Hong Kong, South
Africa, Mexico, India,
Norway and Turkey

Major Export bamboo

products are
Handicrafts and
Furniture

Average Global
market growth rate
of 7% or valued at
US$ 8 billion
annually

Local demand
Procurement Budget
P 1Billion/annum
@ 25% P250M/annum

P 1Billion/annum

Special Education Fund

@ 10% target P 100M/annum

P 1Billion/annum
Natl. Housing Authority

@ 10% target P 100M/annum

TOTAL LOCAL DEMAND = P 450Million/annum or $11M

Challenges and
Opportunities

Supply-Demand Gap
The supply deficit is
about 2 million
poles for furniture
and 340,000 poles
for handicraft.
The supply deficit would
require additional
bamboo plantations of
150,000 to 166,000
hectares by 2015

The estimated demand

for furniture is 3.5 million
poles and 575,000 poles
for handicraft
(Source: Foreign Trade Statistics)

BAMBOO NURSERY

COST OF INVESTMENT

ASSUMPTIONS
1. It will take about two months to prepare the site
for nursery (1/2 hectare)
2. It will take an average of 5 months for the
nursery to prepare and make the bamboo
seedlings available for sale.
3. Sales from bamboo seedlings will start on the
7th month of Year 1 operation and onwards.
4. A half-hectare nursery can produce 10,000
bamboo seedlings per year (recovery rate of
83%).
5. Shading materials is estimated at PhP10.00 per
100 propagates.
6. Transportation cost in hauling materials is
PhP300 per 6,000 propagules.
7. Cost of nursery maintenance is assumed at
PhP1, 000 per month.
8. Cost of fertilizer is PhP3.51 / propagule derived
from 260g/propagule multiplied by
PhP13.50/kg.
9. Cost of land is excluded in the computations
since land valuation varies in every region.

With an average
income of
PhP13, 000
Total Cost of
Investment
PhP41,000.00
31% Return on
Investment
Payback Period of
approximately
1 year

BAMBOO PRODUCTION
ASSUMPTIONS
1. An average of 6 poles per year in every bamboo clump can be harvested.

COST OF INVESTMENT

2. It requires 12.25 hectares in a 7x7 meter area per clump to produce

15,000 bamboo poles.
3. It requires 25 hectares in a 10 x 10 meter area per clump to produce
15,000 bamboo poles.

With an average
Annual income of
Php114, 000

4. Average cost of hauling is P8.00/bamboo pole.

5. Cost of propagule is P10.00/seedling. A total of 210 propagules are
acquired.
6. Cost of transport of propagule from the nursery to the plantation is
P0.50/seedling.

Total Cost of Investment

Php88, 000.00

7. A clump requires 300g of chemical fertilizer w/ equal amount of nitrogen,

phosphorus and potassium every 3 mos. or 1.2kgs/year.
8. A kilogram of fertilizer is valued at P20.00.
9. Labor cost for weeding is P300/hectare and is done twice a year.

131% Return on
Investment

10. Replacement of mortality is assumed at 5% of the total propagules

planted.
11. Maintenance cost is P300/ha. Maintenance is done twice a year.
12. . Harvesting cost is P4.00 per bamboo pole
13. Cost of land was excluded in the computation since land valuation varies
in every region.

Payback Period of
approximately
10 months

COST OF INVESTMENT

ASSUMPTIONS
1. An average of 6 poles per year in every bamboo clump
can be harvested.
2. 1 gallon of wood tech could treat 2,000 pieces of
bamboo slats [480,000 slats/2,000 = 240 gallons or
1,200 lit.]
3. Two (2) weeks raw materials inventory is allocated.
4. Fifty (50) bamboo stem of varied species can yield an
average of 1600 slats.
5. **A pole could produce an average of 32 slats [480,000
slats/32 slats = 15,000 poles.

BAMBOO NODES

With an annual average

income of
PhP496,600.00

Total Cost of Investment

PhP442,000.00

6. Cost of pole is estimated to increase by 10% yearly.

7. Workers are expected to work for 25 days per month.
Rate per day will increase by 10% annually.
8. Overhead costs are also estimated to increase by 10%
annually.
9. Price of slat will increase by 5% on the 2nd year and
10% on the 3rd year.
10. Marketing and administrative costs will also increase
by 10% yearly.
11. Cost of land was excluded in the computation since
land valuation varies in every region.

112% Return on
Investment

Payback Period of
approximately
1 year

ASSUMPTIONS
1. The number of slats extracted from one bamboo pole
depends on the specie as follows:

COST OF INVESTMENT

2. Tinik: 4 cuts of 4ft length x 8 slats = 32 slats

3. Botong and Giant bamboo: 6 cuts of 4ft. length x 8
slats = 48

BAMBOO HUBS
With an annual average
income of
PhP 3,200,000.00

4. Fifty [50] bamboo poles of varied species can yield

an average of 1,600 slats.
5. An average of .05kg of glue per square foot of tile,
plank and laminated board is needed.

Total Cost of Investment

PhP 2,900,000.00

6. An average of 10ml of lacquer per square foot of tile,

plank laminated board is needed.
7. One square foot of tile, plank, plybo and laminated
board with inch thickness requires 6 slats of 5mm
X 1 inch x 4 ft.
8. With 1,600 slats [or 267 sq.ft./day] for 25 days
operation per month in 12 months, a hub can
produce 80,000 sq.ft. of bamboo
tiles/planks/plybo/laminated board with inch
thickness.
9. The cost of land was excluded in the computation
since land valuation varies in every region.

112% Return on
Investment

Payback Period of
approximately
1 year

BAMBOO HUBS (Medium Entrepreneur)

Financial Assumptions:
1. Botong and apos are the identified species of bamboo. They are the
species being considered for engineered bamboo because of their
tenacity and thickness;

2. Production area is measured at 2,000 sq. meters;

COST OF INVESTMENT

3. Given an eight-hour and six days a week production, the business has
the rated capacity to produce 200,000 square meters of engineered
bamboo yearly based on the capacity of the set of equipment that they
will be acquired from Shanghai, China.

With an annual
average income of
PhP 49,725,000.00

4. The production will require 780,250 poles in a year [1 pole = 88 slats

(11 3 ft round pole x 8 slats per round pole)];
5. Capacity utilization is 50% and will increase by 20% on the succeeding
years.
6. Working capital cycle is one (1) month.

Total Cost of
Investment PhP
27,525,000.00

7. Products will be priced based on production costs. An average of 50%

mark-up on cost will be implemented and the scheme of payment is
cash basis, FOB shipping point;
8. Production ratio: Bamboo Planks=50%, Bamboo Laminated
Board=10%, Bamboo Cabinet Doors=40%

181% Return on
Investment

9. Number of slats needed per product: planks=24; laminated boards=9;

cabinet doors=34
10. Two production supervisors will be hired to oversee the daily
operations of the business;
11. There are 74 production workers needed in the operation;
12. The business will incur an estimated promotional cost of Php
100,000.00 monthly;
13. All expenses will increase by 10% per annum

Payback Period of
approximately
11 months

The Big Four

Tissue Culture
TOTAL PROPAGULE REQUIREMENT
500,000 HAS x 200/HA = 100 M PROPAGULES

Bamboo Farming/Plantation
Potential Markets
Construction, furniture &
handicraft sectors
Fish pen operators
Fruit & vegetable sector
Charcoal producers
Power providers

Cost/ha

30K

Benefit cost ratio (15%)

1.63

Primary Products

Potential Markets
Construction industry
Furniture industry
Handicraft industry
Others
For Banana Props

Engineered Products

Potential Markets

DTI-CITC

Construction industry
Furniture industry
Handicraft industry
Others

Carved Articles

Handicrafts

Fences

Gazebos

Charcoal

Cooking & Heating

Air/water purification
Detoxification
Medicine

Lump or raw
Briquette
Activated

Hotels, restaurants,
residences
Supermarkets, warehouses
Hospitals, drug companies
Vehicle owners

Power Generation
Biomass

Cooking

Heating

Electricity

Bamboo Pellets

Executive Order 879

Creating the Philippine Bamboo
Industry Development Council
(PBIDC) to promote the bamboo
industry development project

EO 879 (PBIDC,
2010) allots
500,000 ha new
forest planted to
bamboo by 2020.

directing the use of bamboo for at

least twenty five (25%) per cent of the
desk and other bamboo furniture
requirements of public elementary and
secondary schools and prioritizing the
use of bamboo in furniture fixtures and
other construction requirements of
government

Rationale for the EO

RP contribution to ASEAN to reforest at least 500k
hectares with bamboo from 2010 to 2020;
Planting bamboo can significantly help mitigate
climate change and reduce impacts of natural
disasters;
Bamboo can be used as cash crops for farmers;
RP can have larger share in 10B US$ global
market;
Bamboo industry needs to be strengthened.

PBIDC

Major Provisions

Executive Committee
TWG
PBIDC - to provide overall policy and program
directions.
Executive Committee to assist PBIDC in
program/project identification and resource
generation.
Technical Working Group to assist Executive
Committee.
DENR and associated units shall use bamboo for at
least 20% of its annual reforestation.

Council Composition
12 Members
Chair

Secretary, DTI

Members
Secretary, DENR

Chair, Exec. Comm.

Secretary, DA

League of Municipalities of the

Philippines

Secretary, DepEd
Secretary, DOST
Secretary, DOLE

2 Representatives, NGOs
2 Representatives, Private
Industry Associations

PROGRAM COMPONENTS
shall take into account climate

change mitigation measures.

BambooPhil
AHON Movement
PHILEXPORT
PCCI
LMP

DENR (FMB, MGB,

LLDA, ERDB)
DA
DAR (Excom Member)
NCIP (Excom Member)

DTI
DOST
DepEd
DOLE

CITC (TWG)

shall look into disaster mitigation

projects involving community
development and social protection
and responsibility.

shall address primarily

poverty mitigation which would
cover devt nodes & hubs,
prodev, value/supply chain
mgt, marketing & technology.

BUSINESS & INVESTMENT

OPPORTUNITIES FOR
BAMBOO
2 October 2012
World Trade Center Metro Manila

UNDERSECRETARY MERLY M. CRUZ

Chair, PBIDC Executive Committee