Business & Economy

Brunei firm invests P1.3B to boost BIMP-EAGA

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Filipino firm SL Agritech Corp. and Brunei firm Four Bays Iman Sdn Bhd (FISB) have tied up for a hybrid rice plantation in Mindanao in an effort to stimulate businesses and bring economic progress in the Brunei-Indonesia-Malaysia-Philippines-East Asia Growth Area (BIMP-EAGA), an ASEAN sub-regional grouping.

 

FISB Director Jocelyn Bidaure Lebanan said the company will put initial investments of P1.3 billion in the first year of the program. The first year investment will include working capital (leased area, contract growing area, and operational expenses) P688 million; mechanization, warehousing, trucks, and drying facilities, P427 million; and milling facilities, P185 million.

“This is just an initial investment, more will be invested in this five-year program,” said Lebanan in an interview. Lebanan also said they have already resolved some issues in the local banking process after meeting with Maybank.

According to Lebanan, the company will step up investments to P1.905 billion on the second year; P2.43 billion on the third year year; P2.87 billion the fourth and P3.235 billion on the fifth year for total investments of P11.740 billion over the five-year program.

“It is really an ambitious plan that aims to identify a total of 20,000 hectares by the fifth year of operation that should bring about livelihood opportunities to Muslims in Mindanao,” Lebanan said.

FISB is partnering with SLAC in supporting a previous venture of Tinghua Foundation that Lebanan headed. Tinghua has been engaged in agricultural contract growing among Muslims planting high-value crops like asparagus in South Cotabato.

FISB signed a memorandum of agreement early this week with SLAC Chairman Henry Lim Bon Liong and Dr. Frisco M. Malabanan, SLAC hybrid rice specialist.

Under the partnership, SLAC will provide the hybrid rice technology, seeds, agricultural chemicals, and marketing work to the JV. The FISB will put in the investment in irrigation, farm to market roads, land to be subjected for contract farming or lease, drying equipment, transport, post harvest and other processing facilities.

The JV aims to follow the successful joint venture model of La Frutera Inc (LFI) and Paglas Corp. (PC), a company founded by the late Ibrahim “Toto” Paglas. The PC-LFI JV manages agricultural lands including the banana plantation originating in Datu Paglas, Maguindnao that is now one of Philippines’ largest banana exporters.

While SLAC has long had hybrid rice seed production area in Banay Banay Davao Oriental, Lim said its JV with FISB should further put money in areas that need the most help in poverty reduction. Hybrid rice can raise Mindanaoan’s rice yield from 3.5 to 7.5 per hectare and farmers’ net income from P50,000 to P100,000.

“There are many existing irrigated lands in the Autonomous Region in Muslim Mindanao. In the Ampatuan town alone, there are 6,000 hectares of fully irrigated land. We won’t just give (inputs or money) for free to people. It will be ‘balik tangkilik’ program. Farmers have to pay (for their dues) in the form of rice, and they can have for their own any excess (in production),” said Lebanan. (Manila Bulletin)

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