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Oil palm plantations, mills planned for Davao region

BusinessWorld logo BusinessWorld 4/15/2018 Mark Jayson Torralba
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DAVAO CITY — Several initiatives are underway for the development of oil palm plantations with milling facilities in Davao Region involving proponents from Malaysia, the world’s second biggest producer of palm oil.

Davao City Chamber of Commerce and Industry, Inc. President Arturo M. Milan said the chamber is preparing to sign an agreement with members of the Sarawak Chamber of Commerce with interests in the palm oil industry.

“Their president will be coming over and they will be bringing a delegation coming from Sarawak… in June. They are just waiting for our advice,” Mr. Milan told the media in a forum last week.

“I once met three groups of Malaysian businessmen who wanted to look at and explore business opportunities in palm oil. These are large plantations and they were looking at Paquibato and Marilog (both in Davao City) at that time,” he added.

This time, Mr. Milan said, the prospective investors are looking at potential sites in the entire region.

“(Palm oil) is the flagship product of Kota Kinabalu (capital of Sabah state) that has boosted the economy. You need to have a processing facility because it has to be processed within 24 hours after harvest. The plantation (here) should have a mill. We are really trying to push for processed products like for example even in our cacao, we are happy to see that many local producers are already producing chocolates and that’s a very good indication… that’s where the value added is, in processing,” he said.

In a separate media forum, a Davao Oriental official announced that the province is considering setting up an oil palm plantation and a mill in Cateel town.

Ednar Carlos G. Dayanghirang, chief of staff of Governor Nelson L. Dayanghirang, said the project will be financed by the Development Bank of the Philippines (DBP), which has expressed its readiness to provide P500 million worth of financing for the mill and P1.1 billion for the development and maintenance of a 5,000-hectare (ha) oil palm plantation.

The project proposal was made by Dr. Roy G. Ponce of the Davao Oriental State College and a Malaysian consultant.

The mill, with facilities for both crude palm oil and a refinery, will also be used to process the harvest from the existing oil palm plantation setup under former governor and now Representative Corazon N. Malanyaon after Typhoon Pablo (international name: Bopha) in 2012.

The planned new oil palm plantation is within the 45,000-ha. ancestral domain of the Mandaya indigenous group, who will be the legal owners of the plantation.

The provincial government, however, will be responsible for the loan payments to DBP.

“The province will run the mill and guarantee the payment,” Mr. Dayanghirang said.

Consultations with the local government of Cateel, as well as the towns of Banganga and Boston which are also expected to benefit from the project, are scheduled soon alongside the preparation of the final feasibility study.

“I hope (the mayors) will agree (to) the sharing with the province. By May, I will review the proposed feasibility study before we apply for the loan,” he said.

The province is seeking to supply the Mindanao market with palm oil. — Maya M. Padillo

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