Fourth Palm Oil Mill in Mindanao goes online in Impasug-ong, Bukidnon

Northern Mindanao's first integrated palm oil and plantation has started operations in the municipality of Impasug-ong, Bukidnon, aiming to help develop Mindanao as a priority investment area and attract Malaysian investors seeking cheaper lands and labor to develop critically needed palm oil plantations.

Robertino E. Pizarro, president of A Brown Energy and Resource Development, Inc. (Aberdi), said the project initially aims to exploit 500 hectares (has.) of existing palm oil plantations within Bukidnon during its first year, doubling that to 1,000 has. after another year.

"It was Mr. Manny Boniao and Dr. Rolly Dy of the University of Asia and the Pacific who encouraged Brown Group Chairman Dr. Walter Brown to get into palm oil, "Mr. Pizarro said. "Dr. Dy had been studying palm oil production in Malaysia and Indonesia and said Mindanao had even better climatic conditions making it an ideal place for the crop."

Due to land and labor constraints, Dr. Dy said palm oil production in Malaysia, the world's leading producer, had been growing slower than the world average and entrepreneurs from that country were now actively looking for partners in areas with cheap and abundant land and labor.

Already, there are some 30 Indo-Malay joint ventures covering 700,000 hectares in Indonesia which demonstrate the vast opportunities for palm oil production in Mindanao to meet the growing demand for the commodity.

Mr. Pizarro said Aberdi has planted about 410 hectares in two Bukidnon towns and established a nursery at Talakag in Bukidnon. The Impasug-ong local government headed by Mayor Mario Okinlay is championing its production and has identified about 2,000 hectares in Barangay Kalabugaw and another 300 has. in Bgy. Sayawan to pursue its development. In addition, the Bali Oil Palm Farmers Multi-purpose Cooperative in Balingasag, Misamis Oriental headed by Mr. Boniao has already planted another 150 hectares in the municipality and is expanding its area.

Eventually, Mr. Pizarro said the Aberdi project would develop some 5,000 hectares of pasture land in the towns of Impasug-ong, Cabanglasan, Sumilao and Talakag in Bukidnon, and the cities of Malaybalay and Gingoog, providing direct and indirect employment and livelihood for up to 10,000 farmers in the target areas.

The integrated operation would be anchored by Aberdi's P220-million palm oil mill in Impasug-ong with a capacity of 20 tons per hour, which Mr. Pizarro says they hope to expand to 30 tons after three years.

"We are now pilot testing our present 1.5-ton capacity plant to gain more knowledge and experience in palm oil processing," Mr. Pizarro said. "We shall eventually be inviting local and foreign joint-venture partners and investors to undertake a projected P250 million expansion when we double our capacity in 2-3 years."

At present, 25,227 hectares (82 percent) of the country's oil palm plantations are concentrated in Caraga and Region 12 in Mindanao, with another 3,994 has. in Central Visayas, said Edgar Bahain, project officer of the Palm Oil Development Office of the Philippine Coconut Authority-Coconut Extension Training Center in Davao City.

Over half, or 13,000 hectares of the present area have aging trees due for replanting but another 12-18,000 hectares are needed to attain domestic sufficiency in palm oil production. Fortunately, the country has about 304,350 hectares of ideal areas found mostly in Mindanao.

The DA has identified the following potential areas in Mindanao: Region 13 (143,010 has.), Region 10 (77,730 has.), Region 9 (38,960 has.), Region 12 (23,810 has.) ARMM, (12,550 has.) and Region 11 (8,290 has.),

However, although domestic demand for crude palm oil is rising, production is headed south due to the senile trees found in many plantations. Last year, only 44,890 metric tons (MT) of the domestic requirement of 150,400 MT was produced locally, forcing domestic oil palm processors and users to import 106,000 MT from Malaysia, Indonesia and Thailand.

"Domestic demand for palm oil is estimated at P2 billion annually and growing at 10% per annum," Mr. Pizarro said.

Ironically, the bulk of the country's palm oil refining capacity is found in Metro Manila and Luzon making the transport of palm oil kernels a constraint and the establishment of more oil mills in Mindanao where most of the production areas are found an opportunity, Mr. Pizarro said.

"We are inviting Bukidnon farmers to plant oil palm and we will support them with technical assistance and management," he added. "We will buy all they can produce, or they can also choose to have their fruits milled in Agusan del Sur which has three oil mills."

The Aberdi palm oil mill aims to serve areas within 100-150 kms. of its location. The three oil mills in Agusan del Sur are some six hours land travel from Bukidnon.