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Filipino company mulls 10,000-hectare oil palm plantation in Palawan

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By Melody M. Aguiba

A 10,000-hectare oil palm plantation is eyed to be put up by Filipino investor Dubana Resources Dev’t Corp. (DRDC) in Palawan in order to meet demand as Philippines’ imports is projected to reach P35 billion by 2017.

The targeted sites are in Aborlan and Berong, Palawan.

“They’re now consolidating land.  Then, they will put up a plant together with foreign investors,” said a Philippine Coconut Authority (PCA) official in an interview.

DRDC will put in a huge investment into the oil palm plantation estimated at P1.8 billion at a production cost of P180,000 per hectare over a four-year development period. Consequently, it will put up a processing plant with a capacity placed at 60 metric tons (MT).

Oil Palm plantation (Image courtesy of wikipedia)

Oil Palm plantation (Image courtesy of wikipedia)

A 5,000-hectare plantation needs a processing plant with a 30 MT capacity which is estimated to cost P450 million.

DRDC refuses to disclose yet its foreign partner.  Nevertheless, most investors in oil palm are Malaysians with its expertise in oil palm plantation and palm oil processing.

There is a big opportunity for Filipino partners to venture in oil palm since Malaysia has prohibitions in converting land into oil palm plantation.  It wants to retain 50 percent of land as forest cover.

Mindanao, particularly Mindanao and Palawan, has the environment suitable for oil palm planting as oil palm grows over 12 degrees north or 12 degrees south the equator.

“Almost all of Mindanao is suitable for oil palm especially the high rainfall area,” said the PCA official.

However, the policy of the Department of Agriculture and PCA is to keep existing coconut farms devoted to coconut.

There are existing oil palm planting activities now in Palawan across 9,000 hectares.  Of this area, 2,900 is on lease by Agumill which also runs four mills.  The mill is in Brooke’s Point with a 30 MT capacity.

Oil palm is processed into many marketable products including palm kernel oil (PKO) which has nearly the quality of coconut oil with its lauric acid content, although coconut oil remains to have a slight premium price over PKO. Palm oil is used in food preparation as cooking oil, industrial frying, margarine, shortening, vegetable ghee, ice cream, confectionery, and non-dairy creamers.

Philippine oil palm production has been growing at 7.62 percent annually coming from an area of 38,599 hectares in 2008 to 53,014 in 2012, according to the Bureau of Agricultural Statistics.

Areas in Caraga (Butuan, Agusan provinces), 35 percent and in Socksargen (South Cotabato, Sultan Kudarat, Sarangani, General Santos), 30 percent.

The country’s 2011 import of oil palm was 575,000 MT.  But as consumption has grown, import is projected to reach to one million MT worth P35 billion by 2017.

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