ANALYSIS OF BANANA PROCESSING BUSINESSES AND THEIR SUPPORT ENVIRONMENT IN THE PH

ILIPPINES Argaosa S. Arturo, Perlita A. Nuevo, Jocelyn E. Eusebio and Bessie M. B

urgos INTRODUCTION The Philippines is one of the major producers of banana in th
e world. In fact, it ranked fifth in global production in the year 2000 with Ind
ia, Brazil, China and Ecuador on top of the list. Banana also accounted for 3.3%
(P6.6 B at constant price) of the total value of production in agriculture in t
he year 2001. Moreover, it ranked second among the top Philippine exports in the
year 1999 and 2000. This makes banana a consistent dollar earner with export re
venues of more than US $200 M annually. The strength of the banana industry lies
on the big hectarage, which is a little more than half (53.8%) of the total lan
d area planted to fruits (621,861 has). The country is also blessed with favorab
le climate, well suited for growing bananas all year round. There are already ex
isting banana cultivars accepted in domestic and export markets. The major culti
vars are Cavendish and Seorita for the fresh export market, Saba and Cardaba for
processed products (chips and crackers), Lakatan, Bungolan, Latundan, and Seorita
for fresh local market. In the year 2004, the total area planted to banana was
estimated at 414,510 has, 44% of which is planted to Saba. The total volume of b
anana production in 2004 was estimated to be 5,631,250 metric tons. Of this volu
me, 29% goes to export as fresh fruit, 18% goes to the processing sector, and 49
% goes to the local market and used for various food items. As earlier stated, t
he Saba variety is often used for processing especially for banana chips. In Min
danao alone, there are 26 processing plants for banana chips with a capacity of
20-60 tons per day per plant. In a survey conducted in 2003, the total plant cap
acity is estimated to be 440 t/day but the actual average daily volume of banana
chip produced was only 242 t/day or short of 198 t/day. The total banana chip p
roduction on daily basis of 242 tons is far short from the estimated 600 tons da
ily requirements for banana chips. destinations of banana chips is presented in
Table 1. The total banana chips The top ten export export in 2004 is reported to
be 36,538 tons valued at US$ 36.86 M.
Recently, however, banana chip

processors have reduced the buying price from P4.30 4.50/kg to P3.30 3.50/kg. Re
ports indicated that the main reason is the reduction in volume of banana chips
being imported by China, the second biggest single country market of the product
. Inspite of this, the growth potential for banana processed products remains hi
gh. The country has still a large area of land suited for banana production whil
e its population growth rate remains above 2% annually. With more effort to diss
eminate relevant information, more people can be enticed to go into business of
banana production and processing. Objectives: 1. Identify the strengths and weak
nesses of small banana processing businesses; 2. Analyze the availability of inf
ormation and services for small rural processing businesses which contribute to
their efforts to compete; 3. Analyze the potential of small processing businesse
s to contribute to rural development; 4. Profile the mechanisms for information
flow and collaboration and areas of noncommunication among the important agents
linked to adding value to banana through processing; 5. Analyze the experience o
f a project which promoted small rural processing businesses; 6. Identify possib
le strategies for improving the conditions for the start up and expansion of sma
ll processing businesses which contribute to rural development. These strategies
may depend on closer links among specialists from production, food processing a
nd business support. Table 1. Top 10 export destinations for banana chips Januar
y to December 2004 (preliminary) Gross Kilos Canada China, Peoples Republic of Ta
iwan (Republic of China) France Germany Hongkong Japan (excludes Okinawa) Nether
lands UK (Great Britain and N. Ireland) United States of America Total 783,239 7
,496,311 4,365,256 2,513,636 3,968,409 2,018,834 1,664,738 1,239,034 3,245,700 6
,764,450 40,561,835 Quantity 725,538 6,879,085 3,516,871 2,247,298 3,647,766 1,8
29,742 1,496,255 1,156,151 3,003,258 3,003,258 36,538,029 FOB Value 868,583 5,86
7,516 4,169,241 2,293,981 3,221,374 1,574,296 1,626,530 1,111,671 3,252,219 3,25
2,219 36,860,284 Rank 10 2 3 6 5 8 7 9 4 1 $/Kg 1.197 0.853 1.185 1.021 0.883 0.
860 1.087 0.962 1.083 1.122 1.009
Country of Destination
Source: Bureau of Agricultural Statistics, 2004
2

I.
Forming the National Team Figure 1 shows the organizational structure approved b
y the National Steering Committee organized in relation to the holding of the Fi
rst International Banana Uses Workshop in the Philippines. As to the Country Stu
dy Team, the National Steering Committee agreed that this will be composed of th
e Head of the Technology Packaging Unit of the Technology Outreach and Promotion
Division of PCARRD, the Director of the Crops Research Division of PCARRD, and
a Technical Expert on post harvest handling and processing from the University o
f the Philippines at Los Baos (UPLB). The Terms of Reference of the Country Study
Team include: 1) profile the different small-scale banana businesses and the se
rvice providers that support the banana processing businesses, 2) organize a sma
ll group workshop to validate the data gathered and 3-4 banana processing enterp
rises to conduct an in-depth study, 3) process and organize the results of the s
urvey, and 4) prepare the output of the survey for presentation of the team to t
he international workshop. After organizing the Study Team, it was agreed that t
he study will be conducted in Southern Tagalog provinces, Region 4 which is comp
osed of 10 provinces with Quezon, Oriental Mindoro and Occidental Mindoro as the
leading banana producers (Figure 2). .
II.
Preliminary View of Banana Processing A. Banana Products in the Market In the be
ginning of the study, the Study Team listed the different product preparations w
here banana is an ingredient. These products are the following: a) Snack foods (
banana cue, banana splits, chips/crackers), b) banana sauce, c) flavorings and e
xtracts, d) food ingredients, e) extenders, f) fabrics, g) novelty items, h) foo
d wrapper and liners, i) animal feeds, and j) organic fertilizers. Thereafter, t
he list of enterprises registered with the Department of Trade and Industry (DTI
) Central Office was listed (Table 2). There are 12 businesses engaged mainly in
the production of banana chips all of them operating outside the Southern Tagal
og provinces. These enterprises are big corporations involved in the processing
of many other processed products.
3

Figure 1. Organizational Structure for the First Global Banana Uses Enterprise W
orkshop
International Coordinating Committee Dr. Charles Staver INIBAP Regional Coordina
tors
National Steering Committee INIBAP - Dr. Agustin B. Molina PCARRD - Dr. Patricio
S. Faylon DA-BAR - Dir. Nicomedes Eleazar CvSU Dr. Ruperto Sangalang
WORKSHOP/EVENTS COORDINATING COMMITTEE Chairman: Dr. Bessie Burgos, PCARRD Membe
rs: Dr. Vic Guiam, DA-BAR Ms. Versalyn Roa, INIBAP Ms. Yolanda Tanyag, PCARRD TO
R Lead in the local arrangement/coordination and implementation of the internati
onal workshop Supervise the activities of the Techno Fair Team and Country Surve
y team
Techno Fair Team
Country Survey Team Team Leader: Members: Dr. Arturo Argaosa, PCARRD Dr. Jocelyn
Eusebio, PCARRD Dr. Perlita Nuevo, UPLB
Leader: Members:
Dr. Simeon Crucido, CvSU Ms. Edna Vida, CvSU PCARRD Staff DA-BAR Staff
TOR
Organize the Techno Fair Invite and arrange participation of exhibitors Put up p
hysical facilities for the exhibits Organize techno forum/symposium Document the
organization of techno-fair
TOR Profile the different small-scale banana businesses and the service provider
s that support the banana businesses Organize a small group workshop to validate
the data gathered and select 3-4 banana enterprises to conduct an in depth stud
y Process and organize the results of the survey Prepare the output of the surve
y for presentation of the team to the international workshop 4

A Il M I If L B V Q S P R CL B O MM C C
E L G P A d d C V
B C C
D
G S C
Rizal Cavite Laguna
Map of the Philippines
Quezon
Batangas Marinduque Occidental Mindoro Oriental Mindoro Romblon
Palawan
Figure 2.
Southern Tagalog Region (Region 4) with Quezon, Oriental Mindoro and Mindoro Occ
idental as leading banana producers
5

Table 2. DTI list of companies which are into production and export of banana ch
ips. Name of Company
B-G Fruits & Nuts Mfg. Corp.
Address
621 Building, FTI Complex Taguig Metro, Manila 60 Lapu-lapu Avenue San Antonio V
illage, Lahug Cebu City 6000 Rm. 2309 Tower 1 Cityland 10 6815 Ayala Avenue Maka
ti City Matin-ao, Polomolok South Cotatabo 88 San Guillermo Avenue Bo. Buting, P
asig, MM Dolmar Bldg., 56 EDSA Mandaluyong City, MM Villamor Street, Bo. Obrero
Davao City 15 L. Rivera St. & J.P. Rizal St. Projj. 4, Quezon City 4 Dama de Noc
he St. United Paraaque Subd. IV Paraaque City 66 Imperial St., Cubao Quezon City G
ensan Drive & Odi St. Koronadal, South Cotabato Had. Candelaria, San Enrique Neg
ros Occidental
Contact Person/Position
Ms. Benny T. Badenas Vice President Mr. Rory Eddie Ong Yiu President Mr. Leopold
o Estrellado President Mr. Michael Rene Ong Yiu President Mr. Ruben See Presiden
t Mr. Philip Young President & CEO Ms. Marilou Fernandez
Contact No.
Tel. : (632) 838-4434 837-0378 Fax: (632) 838-4563 Tel. : (6385) 342-7777 Fax: (
6385) 342-8888 Tel. : (632) 815-1831 815-0580 Fax: (632) 810-0532 Tel. : (6383)
552-6754 501-0732 Fax: (6383) 501-0051 Tel. : (632) 641-0991 641-0995 Fax: (632)
641-0992 Tel. : (632)936-7246 to 48 930-6001 to 05 Fax: (632) 936-7245 939-5828
Tel. : (6382) 221-1528 300-5495 Fax: (6382) 300-5494 (632) 410-0522 Tel. : (02)
911-7240/2070 8549/713-4018 Fax: (02) 911-8549 Tel. :(632) 823-2566 to 70 Fax:
(632) 823-3708 Tel. : (632) 912-2777 438-5837 Fax: (632) 438-4662 421-9149 Tel.
: (083) 228-2262 Fax: (083) 228-2028 Tel. : (6334) 460-3186 Fax: (6334) 460-3186
Celebes Agricultural Corp. El Coco Mfg., & Trading Corporation. Greenville Agro
Corporation International Food Snacks Corporation Festive Foods International, I
nc. (formerly Jonas Intl. Phils., Inc.) Koki Food International, Inc.
L. Dometita & Sons Food Industries Leslie Corporation Sees International Food Mfg
. Corp. SUNBLISS Internationale ExImports Reliance Ore Co., Inc.
Mr. Leopoldo A. Dometita Asst. to the Manager Ms. Cristy Enriquez Import-Export
Officer Mr. Ruben Lim See President Mr. Carlos L. Bautista General Manager Mr. C
iriano D. Sia. Jr. Marketing Head
Failing to get a list of banana processing enterprise in Southern Tagalog provin
ces from the Central Office of the DTI, the Study Team visited the DTI Regional
Office for Southern Tagalog. Again, the effort provided negative results. Hence,
the Study Team turned to the different Provincial Offices of the DTI. The provi
ncial DTI office of Laguna showed four enterprises involved in the processing of
banana products, two in banana chips and two in banana sauce.
6

A visit to the DTI Provincial Office in Oriental Mindoro was also done. There ar
e three known enterprises in the province engaged in the production of banana ch
ips. All of them are registered with the DTI. After establishing that, the Regio
nal Office in Southern Tagalog of the Department of Science and Technology (DOST
) is actively involved in providing technical assistance to small food processin
g businesses, the Study Team sought their assistance. The Study Team was informe
d that there is a cooperative engaged in the production of banana chips and sauc
e in Calatrava, Romblon. To get more information on banana processed products, t
he Study Team went to the different DOST agencies. The Food and Nutrition Resear
ch Institute (FNRI) has developed a baby food with banana as one of the ingredie
nts. Unfortunately, the product has not been commercialized. A number of banana
processed products were also developed by the Industrial Technology Development
Institute (ITDI), such as, banana flakes and banana powder. commercialization. H
owever, these products are still awaiting The development of these banana produc
ts was funded and
coordinated by the Philippine Council for Industry and Energy Research and Devel
opment (PCIERD), DOST. The study team also visited Divisoria in Manila, the bigg
est trading center of agricultural products and supplies in the country. Indeed,
one could find in the Divisoria market not only the raw materials for banana pr
ocessing but also the processed banana products as well as supplies and equipmen
t used in the processing of banana. The fresh Lakatan fruits are mostly coming f
rom Mindanao while the supply of Saba is being sourced mainly from the Mindoro p
rovinces. The bulk of the Saba is being bought by banana-cue processors from all
over Metro Manila with some even coming from the nearby provinces. The study te
am was informed that overripe Saba is being purchased by individuals who process
it into various banana products. Repeated follow-ups, however, proved futile in
locating these processors. The banana processed products found in the Divisoria
market are banana catsup, banana extracts used for flavorings, banana powder, a
nd banana chips. Even banana leaves used as food wrappers and liners are sold in
the market.
7

The different supplies being used for banana processing available in the Divisor
ia market are: bottle and plastic containers, bottle sealers, plastic sealers, s
trainers, large frying pan for cooking, and cooking. B. Technical Support Sector
Table 3 shows the different organizations, mostly government, that provide vari
ous services for the establishment and operation of small banana processing busi
nesses including product certification, promotion and marketing. Technical suppo
rt is almost always provided by the Provincial Science and Technology Office (PS
TO) to prospective and even existing small food processing businesses. The PSTO
provides assistance in the preparation of feasibility studies and the technical
training on food processing. If the manpower capability of the PSTO is inadequat
e, the PSTO coordinates with the different agencies of the DOST and other servic
e providers who have the capability to provide technical training. The local sta
te college or university that has a food-processing center is likewise tapped to
provide technical training on food processing. C. Sectors Related to Small Busi
ness Start Up and Operations The Provincial Center of the DTI is responsible in
providing business management and marketing aspects to prospective small busines
s entrepreneurs necessary to start the business. The Provincial Center of the DT
I also takes the lead in the promotion and marketing of the processed food produ
cts. In some cases, the TESDA provides the necessary trainings on entrepreneursh
ip and value formation. In terms of product analysis, the Food Development Cente
r and the Packaging Research and Development Center are recognized by the Bureau
of Food and Drug Administration for product registration. For financial require
ments, the Land Bank of the Philippines, the Technology and Livelihood Resource
Center, the LGUs Livelihood Funds (if existing), and Small Business Guarantee and
Finance Corporations are usually relied upon by the SMSEs proprietors. In troub
le-shooting and evaluation of processing equipment, the Industrial Technology De
velopment Institute and the Suppliers take the lead.
8

Table 3.
Different organizations providing various services for the establishment and ope
ration of small banana processing businesses including product certification, pr
omotion and marketing. Name of Organization
Food and Nutrition Research Institute (FNRI) - DOST Industrial Technology and De
velopment Institute (ITDI) DOST

Type of Organization
Research and Development
Services Offered
Research and development Product promotion Research and development, product pro
motion and commercialization Training Prototype development of processing equipm
ent Technical assistance Development of labels and packaging materials Coordinat
ion and funding of R&D and commercialization of processed food products Research
and development Technical assistance Research and development Product promotion
Technical assistance Product promotion and marketing Organization and trade fai
r Training on entrepreneurship Issuance of business name and business certificat
ion Coordination and funding of trainings on food processing entrepreneurship an
d value formation Feasibility preparation Training on food processing Coordinati
on of technical assistance to food processing business Product certification Mic
robial and chemical analysis of food products Analysis of nutrient contents of f
ood products Coordination of international trade fair Export promotion of food p
roducts Export promotion of food products
Type of Business
MSMEs MSMEs

PCARRD and Philippine Council for Industry and Energy Research and Development (
PCIERD) DOST University of the Philippines Los Baos (UPLB) Cavite State Universit
y (CvSU) Technical Assistance - training - product promotion and marketing - fea
sibility study preparation Department of Trade and Industry (DTI) Provincial Cen
ter

MSMEs

MSMEs MSMEs MSMEs
Technical Education and Skills Development Authority (TESDA) Provincial Science
Technology Office, DOST and
MSMEs

MSMEs
Product Analysis Certification
and
Bureau of Food and Administration (BFDA) Food Development Center

Drug

All All All All
Export
Packaging Research and Development Center, ITDI - DOST Bureau of Export and Prom
otion, DTI PhilFooDex

All
9

Financing
Land Bank of the Philippines (LBP) LGUs Livelihood Funds Technology and Liveliho
od Resource Center (TLRC) Small Business Guarantee and Finance Corporation, DTI
Barangay Micro Business Enterprise (BMBE)

Financing and cooperative development Financing Financing Financing of SMS enter
prise Financing Prototype development Technical assistance on operating the proc
essing equipment
Cooperatives Microenterprise Micro and Small enterprise MSMEs Barangay enterpris
e All
Development of Processing Equipment
Industrial Technology and Development Institute (ITDI) DOST
D. Size and Nature of Processing Businesses It is noted that in Table 2, there a
re 12 big companies engaged in the production of banana chips. In a study conduc
ted in Regions 11, 12, and 13 on banana chips production, only five companies ar
e included in the DTI list while five others are not. There are other three big
banana chips producers in the three regions that did not provide any information
during the conduct of the study. The results of the study showed that each comp
any is producing at least 10 tons per day of banana chips. In the latest situati
oner of the banana chips industry, the total production of banana chips in the c
ountry is estimated to be 400 tons per day. It is 200 tons short of the 600 tons
requirements for banana chips on a daily basis. The banana chips export in 2004
was estimated to be 36,538 tons valued at US$ 36.86 M. In the current survey co
vering the Southern Tagalog Region (Region 4) where six small banana chip proces
sors are involved, it was found that their banana chips are marketed locally. It
could be presumed that their production is not part of the annual estimate of t
otal banana chips production in the country. Hence, it is actually difficult to
decipher the total production of banana chips in the Philippines. III. Prelimina
ry Workshop After gathering substantial data on banana processing businesses and
support service providers, the Study Team convened a preliminary workshop. adju
stment from the methodology was done. However, a little Instead of inviting a la
rge number of
participants as suggested in the methodology, the Study Team just selected key
10

representatives from the banana processing sectors. The participants in the prel
iminary workshop are representatives from the following groups/agencies, as foll
ows: 1) Processor Zcorcuerra Food Products 2) Financial institution LandBank of
the Philippines 3) Department of Science and Technology (DOST) Regional Office N
o. 4 4) Department of Trade and Industry (DTI) Provincial Center in Laguna 5) St
ate Universities UP Los Baos (UPLB) and Cavite State University (CvSU) 6) Departm
ent of Agriculture Bureau of Agricultural Research (BAR) 7) PCARRD The participa
nts in the preliminary workshop conducted a focused-group discussion as to their
role and activities in relation to banana processing businesses. Each participa
nt shared their organizations programs and projects in food processing. Likewise,
the participants shared information as to other groups and institutions who are
involved in banana processing businesses. The outputs of the workshop are mostl
y reflected in Table 4. At the end of the preliminary workshop it was agreed to
meet again in the final workshop to validate the results of the survey. IV. Anal
ysis of Processing Businesses The Study Team conducted an analysis of three ente
rprises involved in banana processing businesses, namely: Mikko Banana Crackers,
Zcorcuerra, and Arya Calatrava Food Products. Mikko Banana Crackers and Zcorcue
rra Banana Chips are micro enterprises which are into the processing of banana c
hips. Arya Calatrava Food Products is likewise classified as small-owned and ope
rated by the association of women in Calatrava, Romblon which is into the proces
sing of catsup and banana chips A. Mikko Banana Crackers 1. General Information
Name of Business : Contact Number: Name of Contact: Primary Products: Brand: Mik
ko Banana Crackers 0920-857-6585 Mr. Benjamin Esclanda, Jr. Owner-Operator Banan
a Chips/Crackers Mikko Banana Crackers
11

Certification: Clients of the products:

In progress Local tourists and residents Oriental Mindoro and Manila
2. The Original Idea and the start up/establishment of the business The owner-op
erator started the business in 1997 when he learned the technology of banana chi
p processing from a good friend. The tools needed in processing like in peeling,
chipping, and cooking (Figures 4, 5, and 6) are simple and could easily be fabr
icated or sourced from the local market. The business project was started at the
backyard of the owner. The owner made a trial and error testing the banana chip
s until he came out with a good product which eventually was sold at the Pinamal
ayan Public Market. Therefore, the project was started without any feasibility s
tudy or an investment plan. Two years later, however, the business project was n
ot going anywhere so he approached the Provincial DTI Office to seek for assista
nce. He was referred to the DOST Provincial S&T Center (DOST-PSTC). The DOST-PST
C conducted an assessment of the project and found out that the main problem was
operating capital. The DOST-PSTC assisted the owner by preparing a feasibility
study which was used for sourcing the capital. Enterprises. Eventually, the owne
r availed a P60,000.00 loan from the Pinamalayan LGU Livelihood Fund. The amount
was used to build the present site of business project in Socorro, Oriental Min
doro. 3. Technology and Organization of the processing of banana The present sit
e of the Mikkos banana chip factory is approximately 50m2 house where the peeling
, chipping, cooking, and drying are done. The factory has a concrete floor and g
alvanized iron sheet roofing but the walls are made of lumber slabs from locally
sourced woods. Right after the entrance of the factory is a place where the raw
bananas are piled up. This is where the peeling is done and the peeled bananas
go to the right side where the chipper is positioned. After chipping, the banana
chips are put in Fortunately, the Local Government of Pinamalayan, Oriental Min
doro has livelihood fund to Microfinance Small
12

pails with water then finally to the frying pan located at the farther right of
the chipper. After cooking, the cooked banana chips are transferred to a straine
r on the table just on the left side of the frying pan. After draining the oil,
the chips are transferred to a container for final cooking before the chips are
placed in a big plastic bag. A day after, the chips are transferred to small pla
stic sachet (polypropylene) with a capacity of 100 and 150 grams. The sachets ar
e then sealed with the brand in it. The peeler being used is an improvised knife
while the chipper is made of metal sheet mounted on a piece of wood. The furnac
e/burner is made of an indigenous technology which is being fed with rice hull a
s fuel. The frying pan is also locally made. The newly cooked chips are harveste
d using a strainer sourced from the Divisoria market and is mounted on a 2-meter
wooden pole. strainer is made of a galvanized screen mounted on rectangular woo
d framing. Right now, Mikkos banana chip factory processes 2,400 banana fingers p
er batch. It takes 5 hours to process the 2,400 banana fingers from peeling up t
o the cooking of banana chips. Three persons are involved in the process. The fi
nal product is an 80 kg banana chip. Two batches are processed each week. The qu
ality of the product is done through self testing which was acquired through exp
erience. The cooking oil is recycled and so the oil is not wasted. During summer
, the banana peels are dried and used as a fuel for cooking. On rainy days, the
banana peels are just thrown in an open field. 4. How is the business linked int
o the market chain? The bananas are usually sourced from local peddlers and some
times from the stockyard of banana traders in the municipality. local market. Th
e banana chips are sold by retailers in the public market and over the counter s
tores in Calapan City. The banana rejects for the Divisoria market are selected
for its low price. Other inputs are sourced from the The
13

5. How is the business managed The business project is personally handled by the
owner-operator from sourcing of the raw materials, processing, packaging, and m
arketing. No book of accounts is being maintained even if the business operator
claims to have getting profit from the project. Right now, the owner-operator is
in the thick of a negotiation with a banana chips trader from Manila. If the de
al is closed, the plan is to expand the business. 6. Analyzing and summary of re
sults Table 4. Principal strengths and weaknesses of Mikkos Banana Crackers Area
Physical structure and equipment Availability and use of inputs Production proce
ss Planning, financial management strategies Markets and marketing Strengths Use
of locally-made materials Adequate supply of bananas for chips Use of simple pr
ocessing technologies The business operation is not yet big The DTI assists in t
he product promotion and marketing Available local market Availability of loan w
indows for MSMEs The project site is highly accessible to transportation service
s Weaknesses May not pass GMP requirements No quality standard is being observed
in the purchase of raw materials May not pass GMP requirements Records are not
being kept Lack of product certification would not allow expanding the market Li
mited capital Increasing cost of fuel

Financial capital Transportation and logistics

Analysis of the potential contribution to rural development The business project
regularly buys the banana produced in the province. Hence, it contributes in st
abilizing the price of raw bananas which may encourage the farmers to continue g
rowing banana as their alternative source of income. The business project also n
eeds extra labor which can provide livelihood to a number of people. It is clear
that the project can provide steady income to some members of the community whi
ch would enable them to send their children school. The business
14

project would also encourage harmonious relationships among the workers, farmers
, banana traders and the business owner. B. Z-Corcuera Banana Chips 1. General I
nformation Name of Business: Name of Contact: Primary Products: Brand: Certifica
tion: Clients of the products: Z-Corcuera Food Products Mrs. Zeny Corcuera Owner
-operator Banana Chips with Honey Z-Corcuera Food Products In-process Laguna res
idents, Balikbayan (outlet at Duty Free Philippines), Restaurants in Laguna area
and other food processors
2.
Establishment of the Business The business was started in 1992with peanuts and g
arlic as the main product. It was early this year (2005) that the banana chips w
ith honey was added to the line of products. This happened when a friend encoura
ged the owner to prepare banana chips which later became a favorite gift to relati
ves who live abroad. The technology of chip preparation was basically patterned
from the peanuts they are already cooking. Actually, it was the husband who did
a trial and error cooking that resulted in the additional and acceptable product
. It was marketed in the neighborhood and by word of mouth the sale increased. T
he operating capital for the banana chips was taken from the peanut sales. No fo
rmal record keeping of expenses and sales is done.
3.
Technology and Organization of the processing of banana The present site of Z-Co
rcuera at their residence. It occupies the front part of the lot with an approxi
mate area of 3 x 5 square meters. Operations While like washing, peeling and sli
cing are done outside the roofed area.
syruping, frying and temporary storage are done in the adjacent screened room. A
fter receiving the fruits, which come from a nearby town (Bitin), fruits are def
ingered, washed in basin and peeled manually. Slicing is done using a very simpl
e slicer available in supermarkets. It is made of hard plastic with adjustable 1
5

stainless blade.
In less than a minute, a single fruit could be sliced. Frying is Single fried ba
nanas are stored in covered plastic
done in a large pan.
containers where it could be stored for a month or two. When there are orders, t
he stored chips are dipped in syrup and fried in gas-fueled big pans for the sec
ond time. Fried chips are removed from the pan by the use of a chicken wire with
long bamboo handle. Excess oil is further eliminated by placing the chips on a
strainer made of galvanized screen with wooden frames. After cooling, the fried
chips are then packed and sealed either in polypropylene bags, microwavable cont
ainers (135gms or 200gms) or aluminum pouches. Labeling is also done in plastic
containers. Distribution of banana chips to Manila is not a problem since the fa
mily owns a rent-a-car business where delivery could ride on a trip. Z-corcuera
Food Products processes 2,000 Saba fingers per week. It takes six hours to proce
ss 1,000 fingers from peeling up to second frying. There are four people involve
d in the process. Cooking oil is recycled and so the oil is not wasted. Peel was
te is disposed through the garbage collector in the community. A newly acquired
slicer fabricated locally was purchased very recently at P31,000. However, the a
djustment of the blade is quite problematic. The owner paid P1800 for the templa
te used in labeling of the product. Product quality testing is done by the wife.
4. How is the business linked into the market chain? Raw materials are sourced
from a nearby town in Los Baos. This is done by just calling the producer through
the phone and the fruits are picked up after harvest. Chips are sold to the res
idents of Los Baos, Laguna, Duty Free Philippines at the airport, restaurants alo
ng Laguna roads and puts their own brand. some food processors who
16

5.
How is the business managed The business is managed by the owner-operator from s
ourcing of the raw materials, processing, packaging, and marketing. No formal bo
ok of accounts is maintained. The owner has just recently negotiated with Shoema
rt Inc., a very big supermarket chain.

Table 5. Analysis and summary of results, Zcorcuerra Food Products. Area Physica
l structure and equipment Availability use of inputs and Strengths Use of simple
tools and utilities Has an access to agencies for assistance (i.e. Packaging-IT
DI, PCARRDDOST, etc) A family enterprise where family members could help in the
operation Non- seasonality of Saba Easy processing method based from their earlier
product. They have capital from the sales of peanut products Existing markets f
rom their other products (peanuts and garlic) are also their markets for the chi
ps Unexplored local markets Initial capital available from peanut product Owns a
rent-a-car business where delivery and purchase of materials is facilitated Pro
cessing site is accessible Weaknesses Lack operational system flow Lack of sp
for expansion Lack of trained personnel to take charge of either marketing or p
rocessing. Erratic supply of quality raw materials Rapid processing of Saba to m
inimize problem of ripening Lack of GMPs and HACCP Lack of quality standards No
formal accounts book of
Production process Planning, financial management strategies Markets and marketi
ng
Limited supply of chips Lack of quality standards
Financial capital Transportation and logistics


Small financial capital High fuel cost

17

C. Calatrava Food Products 1. General Information Name of Business: Name of Cont

act: Primary Products: Brand: Certification: Clients of the products: Calatrava
Food Products Mr. Dishan Servaez Municipal Planning and Development Officer, Cala
trava, Romblon Banana Chips and Banana Catsup ACF (Arya Calatrava Foods) In prog
ress Local residents of Romblon
2. The original idea and the start-up/establishment In 1998, the municipality of
Calatrava, Romblon joined the One Village, One Product Movement by launching th
e Livelihood Program on Banana (Saba) Production. On the fourth year of implemen
tation the livelihood program, a total of 455 hectares have been planted with ap
proximately 94,000 banana plants. Realizing that the market for the raw banana w
hich could reach up to more than 3M kgs a year will soon become a problem, the O
fficer-in-Charge of the Provincial TESDA in tandem with the Provincial Head of t
he DOST-PSTC convinced the Mayor of Calatrava, Honorable Alice C. Fetalvero to p
romote banana processing in the municipality. The provincial TESDA and the DOSTPSTC packaged the proposal for the conduct of the training in banana processing.
TESDA eventually set aside the funds while the DOST-PSTC organized the training
including the identification and invitation of the resource persons. In June 20
02, a week-long training on banana processing was conducted in Calatrava with 19
women participants. After the training, they organized themselves into a viable
organization called Arya Calatrava Foods (ACF). From then on, the group took ch
arge in making banana chips and banana catsup. The banana products processed by
ACF are slowly introduced into the market especially during important meetings o
f the Womens League of the province of Romblon and various market fairs held in C
alatrava and nearby municipalities. In June 2003, the LGU of Calatrava submitted
a proposal to the Japanese International Cooperative Agency (JICA) for them to
avail of the banana catsup
18

making equipment (pulper-finisher, stem jacketed kettles, boiler, filling system

, sealing machine, and bottle sterilizer) including pouches and labels. The prop
osal was approved by JICA and the banana making equipment was delivered. In June
2004, installation of the equipment was completed. Unfortunately, the banana ca
tsup factory of ACF remains unoperational as the group is still waiting for the
operational budget. Meanwhile, the ACF continues to produce banana chips. 3. Tec
hnology and organization of the processing of banana The Mayor of Calatrava desi
gnated the training center of the Municipal Agriculture Office as the temporary
common service facility of the banana processing. It is where the ACF processed
the banana chips and banana catsup. When the banana catsup making equipments wer
e about to be delivered, the building was rehabilitated and extended. As mention
ed earlier, the factory is still not yet in operation at present. Aside from the
operational budget being waited by ACF, another problem encountered by ACF to g
o full blast in their operation is the limited supply of banana in the project s
ite. A strong typhoon visited the province in November 2004 and has devastated t
heir banana plantation. It will take 10-12 months before the banana plantation r
ecovers from the effect of the typhoon. Meanwhile, the ACF continues to process
banana chips and has temporarily transferred to one of the backyards of a member
of the ACF. Figures 7-10 show the different tools and kitchen wares being used
by ACF in processing banana chips. 4. How is the business linked into the market
chain. Right now, the raw bananas are being sourced from the Odiongan market. H
owever, the raw materials will be sourced from the banana plantation in Calatrav
a and nearby municipalities once it has recovered from the typhoon that visited
the area in November 2004. it was not made clear what will be the buying arrange
ment as to the price and the terms of payment.
19

Once the catsup factory of the ACF becomes operational, the processed catsup is
being eyed to supply the partial requirements of the province. The people of Rom
blon are known to patronize the products produced by their provincemates. The AC
F has learned from experience that their products (catsup and chips) are easily
sold whenever it is displayed or offered for sale during the various trade fairs
participated by the group. The Congressman of the lone district of Romblon has
also put up a pasalubong center (gift center) in Odiongan market where the product
s of ACF are on display and being offered for sale. The provincial DTI center is
also active in helping the ACF in promoting and marketing their products by inv
iting the group in joining trade fairs outside the province. 5. How is the busin
ess managed The members of the ACF organized themselves to support the one town,
one product program of the municipality of Calatrava. It is envisioned by the g
roup that over the long term, the business project will supply the catsup and ch
ips requirements of the province while ensuring the success of the banana produc
tion project of the municipality. The primary challenges of the ACF at the momen
t are the supply of the raw bananas and the inadequate operational capital. The
supply of banana is expected to normalize once the banana plantation has recover
ed from the devastation brought by the typhoon last year. Regarding the operatio
nal capital, the DTI has set aside certain amount for the project to proceed pen
ding compliance to some requirements. The LGU of Calatrava has also put a fund t
o assist the ACF but some accounting procedures are still being ironed out. At t
he beginning of the business project, the members are given training on entrepre
neurship by the DTI through TESDA. The training provided the members the idea on
how to handle the business especially on record keeping. A member has been assi
gned to record all the transactions which include the amount and costs of inputs
used per batch of processed products, the volume of outputs produced and how mu
ch are sold. book. The transactions are recorded in a record
20

The ACF does not hire extra labor as the members themselves do the different tas
ks in the processing of the banana products. Processing is done on a rotation ba
sis among the 19 members. 6. Analyzing and summarizing the results Table 6. Prin
cipal strengths and weaknesses of Calatrava Food Products Area Physical structur
e and equipment Strengths ACF has availed of the assistance from JICA and it giv
es the group the opportunity to mechanize their catsup factory The supply or raw
materials is expected to be very stable The members of the ACF are well trained
in the technical aspect of making banana catsup and chips Records of transactio
ns are being kept however Concerned groups are actively providing assistance in
developing the market and marketing the products The local leaders are active in
sourcing the financial capital for the project The project site is accessible t
o land transport and the province by sea transport Weaknesses The equipment need
to be used immediately or else it will deteriorate. Available experts to troubl
eshoot the equipment Frequent typhoons can be a potential problem No R&D plan is
in place and this could limit the potential of the project Planning and strateg
ic assessment is not yet being done Expansion will become a problem once the pro
ducts produced exceeded what the market can take When there is a change in leade
rship, the continuity of the assistance may stop The roads are not well paved an
d this may affect the quality of the product
Availability and use of inputs Production process
Planning, financial management strategies Markets and marketing
Financial capital Transportation and logistics
Analysis of the potential contribution to rural development Poverty in the Phili
ppines is becoming a big problem and definitely the business project could allev
iate the situation. The project will not only provide livelihood to the members
of the ACF and their families but as well as those engaged in production who wil
l be assured of the market for their bananas. The project will therefore provide
a steady income to the participants of the program which will enable them to se
nd their children to school. The banana producers
21

and the banana processors are also expected to gain new knowledge on banana prod
uction and processing from the trainings they attended. When there is a stable i
ncome, the farmers and processors would be comfortable bringing about better soc
ial relations among the community members. The project could contribute to the m
aximization of land uses especially for banana production. V. Analysis of Suppor
t Services Table 3 presents the different support service providers to small foo
d processing businesses. Most of the support service providers are government ag
encies mandated primarily to provide technical, financial, marketing, and certif
ication to small food processing businesses. On the other hand, Table 7 shows th
e gaps between services needed and services offered. It will be noted that suppo
rt services are available to assist small banana processing businesses in the di
fferent areas of their projects. However, these services are not usually availed
of because of the following reasons: a) lack of awareness on the availability o
f such services, b) leniency in the compliance of existing policies on food sani
tation and handling as well as waste management, c) difficulty in complying to t
he documentation and collateral requirements in availing financial capital, and
d) high cost involved in the adoption of good manufacturing practices. Hence, it
is highly recommended to prepare a primer on the different services available t
o support small banana processing businesses. This primer will be disseminated t
o LGUs, DTI provincial centers, DOST Provincial S&T centers, and other entities,
public or private, which are providing assistance to small business operators.
There should also be honest effort on the part of the different government instr
umentalities to implement existing policies on ensuring the quality standards of
food products and proper waste management. There is also a need to study the di
fferent windows of lending opportunities to encourage small business operators t
o avail adequate capital for their projects.
22

Table 7. Gaps between services needed and services offered

Areas Raw Materials Production process Weaknesses Occurrence of typhoons Erratic
supply of quality fruit Technologies being used are sourced from indigenous kno
wledge Available Services Adoption of agricultural management practices like del
eafing and propping State colleges and universities and research and development
institutes (RDIs) have generated technologies on various banana processed produ
cts DTI, DOTS and LGUs have windows for providing sources of capital to finance
the purchase of equipment and machineries Land Bank, Quedancor, DTI, DOST and co
mmercial banks provide loans to finance MSMEs projects Food Development Center,
DTI, and ITDI offer training sessions on HACCP and food manufacturing practices
as well as food analysis ITDI provides technical assistance on product packaging
and labeling Gaps in Services Lack of awareness on these agricultural managemen
t practices Limited access of business owners to those technologies and high cos
t of technology adoption
Equipment and machineries
High cost of equipment and machineries
Access to these windows is highly competitive
Financial capital
Small business owners have Limited capital Processed products of small banana pr
ocessing businesses do not satisfy the primary requirements for BFAD accreditati
on Processed banana products are packed in plastic sachet, plastic containers, a
nd aluminum pouches but its labels do not have the nutritional facts No bookkeep
ing of expenses and sales and most small enterprises are personally managed by t
he owners with limited activity on business planning and strategic building Smal
l business projects are not usually linked to existing marketing networks and ju
st rely on local markets

Documentation and collateral requirements are oftentimes difficult to comply wit

h High cost involved in complying to HACCP and GMP requirements Leniency in the
implementation a food sanitation and handling policies Lack of awareness of busi
ness owners about the services of ITDI and they usually do not want to shoulder
the expense involved in availing the services for product packaging and labeling
It is unclear why small business owners do not adopt sound business management
practices

Product Certification
Product packaging and labeling
Business management Administration Planning, financial management, and strategie
s Market and marketing
DTI, DOST, TESDA, and LGUs are working together to package and conduct trainings
on business management DTI and LGUs are active in supporting the small project
owners in organizing trade fairs to promote the banana processed products
Participation in trade fairs entails a lot of cost and small business owners do
not participate regularly in trade fairs Lack of policy on standard pricing of b
anana processed products
Small business owners do not follow standard pricing policy Technologies are ava
ilable to convert the solid wastes from small banana projects into animal feeds
and organic fertilizers

Waste management
Solid wastes from banana peelings and trimmings are given to takers who used it
as animal feeds and substrates for organic fertilizers. If there are no takers,
the wastes are just thrown away
Inadequate knowledge of small business owner on the potential of solid waste as
animal feeds and organic fertilizers
23