Coco-based projects power 29% hike in Northern Mindanao investments for 2006

Northern Mindanao's investment performance for the first three quarters of 2006 was once again anchored by the venerable coconut which also accounted for the biggest share of its export pie.

The PhP21.5 billion investment figure presented by the Department of Trade and Industry Region 10 office for the first three quarters of 2006 shows the biggest contributor to the 29% increase compared to the same period last year was accounted for by the chemical-based sector, or specifically the PhP13.5-billion balance of the PhP18-billion expansion project of the Pilipinas Kao, Inc. (PKI) oleochemical plant in Luz Banzon, Jasaan, Misamis Oriental.

PKI's expansion project started last year and increased its production capacity for coconut-based oleochemicals (used for raw materials of soap and detergent) from 41,000 metric tons (MT) to 100,000MT annually. Industry sources say this expansion project was cued by the fast-track completion of STEAG State Power Inc.'s 210 megawatt (MW) coal-fired power plant in Villanueva, Misamis Oriental.

Other major investment areas include the agri-based sector, with PhP 3.7-billion (17.4%), services PhP 1.378-B (6.4%), trading PhP 1.359-B (6.3%), infrastructure and services PhP 490-million (2.3%) forest-based PhP 207-M (1%), mining and metallurgical PhP 24-M (0.1%), consumer manufactures PhP 74-M (0.3%) and metals PhP 1.9-M (01%).

Misamis Oriental continues to account for the biggest share of the region's investments with PhP15.41-billion (72%), primarily due to PKI's expansion project, which also accounted for 84% of the province's total investments.

Other performers include services (construction and expansion of non-bank financing facilities, construction builders and services, trucking and automotive services, and resort and restaurant facilities like the new Basamanggas Resort and Restaurant, also in Jasaan) and trading (retailers in supermarkets and malls, newly opened branches as well as other investments in appliance centers, forest and farm distribution centers).

The strong performance of the services and trading is mainly due to the expanding base of consumer spending power in the region. Trading was bannered by the construction and expansion project of Citra Mina Seafood Market with two newly opened branches in Cagayan de Oro, and other investments in new appliance centers, forest and farm equipment and supplies distribution centers.

Investments in infrastructure and services include the construction and expansion of the Pueblo de Oro Housing project, IT-based buildings (Syntactics and Pueblo de Oro), and other residential real estate projects.

While only accounting for 21 percent of Northern Mindanao's total investments with PhP4.478-billion, Bukidnon continues to dominate agri-based investments with 92% of the regional agri-based total investments. As the region's food producer, Bukidnon saw expansions of its multinational pineapple and banana-producing companies, new and expanded poultry and agri-products ventures, cassava and corn plantations.

Misamis Oriental directly benefited from these expansion projects as they spillover in the food processing sector, mostly in the processing of pineapple and banana. The expansion activities were sparked by the establishment and improvement of key infrastructure like the Mindanao Container Terminal (MCT) at the Phividec Industrial Estate and the Cagayan de Oro base port. New and expansion projects for poultry and other agri-products ventures like vegetables and other commodities were also noted in the province.

For Misamis Occidental, total investments for the period reached P 487-M, a 2% share of the region total, with the bulk coming from the services (P 213 M) and trading sectors (P 83.27 M). Expansions of real estate, restaurants, construction supplies distribution centers, financial and educational institutions, appliance and furniture distribution centers were also recorded.

Lanao del Norte registered a 5% regional share, with major investments accounted by servicing and trading. These include investments in real estate, appliances and supply distribution centers, lending facilities, general merchandise, electrical supply centers, metal works and structural metal products and food facilities.

Agri-related projects (55%) and trading activities (40%) formed the bulk of Camiguin's investments valued at P 107-M.

Registrations at the Board of Investments-Cagayan de Oro Extension Office:

Five major projects with a total investment of PhP 661.75-million have so far been registered for 2006 a the Board of Investments Extension Office in Cagayan de Oro City.

Ellen Kionisala, officer-in-charge for BOI-CDO Extension office, said the Elegant Chemical Alloy Corporation was the biggest registered project with a total investment of P500-million. The steel billet and bar mill plant is situated in a 4.1 hectare lot in the Phividec Industrial Estate at Villanueva, Misamis Oriental.

Other major BOI-registered projects include the PhP59.75-M Forest View Town Houses of Pueblo de Oro Township with 239 units; Nature's Fresh Pineapples Inc. PhP49-M plantation which exports pineapples to Japan; CP Floricultura PhP42-million cutflower-production farm in Manolo Fortich, Bukidnon and Arriba Telecontact's PhP11-million call center at the Rosario Arcade in Limketkai Center, Cagayan de Oro City.

Prospects for 2007:

Northern Mindanao's positioning as the 'Trade and Service Center of Mindanao' is expected to continue drawing new investments and expansion projects. With its strategic location, the region is a competitive and cost-efficient transit point between Mindanao to the rest of the Philippines and to major foreign markets like USA, Japan and Europe.

With a reliable and steady supply of power assured in the medium term with the expected start of commercial operations of the STEAG State Power Inc. 210 megawatt (MW) coal-fired power plant in Misamis Oriental this coming January 8, 2007, Region X is expected to continue attracting investments in the energy sector (power projects), metals, manufacturing sector (shipbuilding, brewery, processed food) and infrastructure and services (ecozone development).

Among these are the completion of a new P1-billion Tanduay bottling plant and Absolute mineral water bottling facility in the Asia Brewery, Inc. (ABI) plant complex of the Lucio Tan Group of Companies (LTGP) in El Salvador, Misamis Oriental. A P250 Million soft drink facility for Virgin Cola is also expected to be constructed soon by the same group in this same location.

The organization of the regional ICT Council will rationalize the regional initiatives of all industry stakeholders and push for a common regional ICT agenda.

Link2Support, the pioneer call center operator in Cagayan de Oro is making the city its base for the Visayas and Mindanao areas, and hiring an additional 1,000 personnel for its expansion. SM Cagayan de Oro's car park is expected to be declared an ICT building with a 4,000 sq.m. lot including the mall and car park. Hotel Koresco Cagayan de Oro is also constructing a seven-story condotel for the Korean active retirees market in Pueblo de Oro Township next to its flagship hotel.

Over the long-term, the city government of Cagayan de Oro is strongly lobbying for the transfer of a Korean silicon smelter originally planned for Vietnam to the Phividec Industrial Estate. Mayor Vicente Emano has also invited principals of the Hanjin Heavy Industries and Construction which has already set up a US$1-B shipyard in Redondo, Subic to consider Cagayan de Oro.

Environmental activists have called for complete transparency in evaluating the impact of the two heavy industries in the region's air space already burdened by the emissions of many 'smokestack industries' in Iligan City and the Phividec Industrial Estate in Misamis Oriental.

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Note:

Hanjin Heavy Industries & Construction is engaged in the shipbuilding, construction and plant engineering sectors.

The Company has three business units:

The shipbuilding unit builds and supplies medium-sized to large ships, including container carriers, chemical tankers, oil and petroleum product carriers, bulk carriers, roll-on/roll-off vessels and special-purpose vessels, as well as small- to medium-sized ships, such as patrol boats, landing and support ships and other ships.

The construction unit focuses on architectural works, and the construction of commercial building, hotels, hospitals, educational institutions, apartment complexes, houses, airport terminals, sports and entertainment facilities and military facilities. It is also involved in infrastructural projects.

The plant engineering unit focuses on the design, building and maintenance of steel-making plants; power, chemical and cement plants; steel structures; cranes; material-handling equipment, and logistical systems. (Google Finance)