After a lull that busied them to consolidate their group’s holdings in diverse interests, top honchos Manuel V. Pangilinan and Ramon S. Ang seem headed for another business rivalry.
Conglomerates San Miguel Corp. and Hong Kong-based First Pacific Co. Ltd. are expected to shortly vie for vast hectares of land to jump-start their foray into commercial farming. The two groups have been separately announcing their respective plans to go into large-scale plantations to take advantage of the state’s food security thrusts.
With their bitter corporate duels to snag control of Del Monte Pacific Ltd., Manila Electric Co., Philippine Airlines and Maynilad Water Services Inc., to name a few, past behind them, MVP and Ang are expected to begin another slugfest in the area of agriculture.
Agriculture is the next logical corporate battlefield. With roads, bridges, seaports and airports being lined up and built in and around urban centers, the countryside is getting more accessible to its intended market. With a little nudge from conglomerates, farming will inevitably be the next major source of economic growth.
MVP’s First Pacific Co. Ltd. is looking at a 30,000-hectare oil palm plantation and a processing plant in Davao Oriental province to serve the domestic and export markets. The group is well versed in commercial farming. First Pacific owns Indofood Agri Resources Ltd., the largest food concern in Indonesia, where Pangilinan is president.
Indofood Agri, according to Pangilinan, recently sent a team to Davao Oriental to check potential oil palm farm areas in the province.
“We are interested in others, but only palm oil has been assessed… for both production and processing. They will build not only a plantation but a factory and products will be for domestic and exports,” Pangilinan told reporters covering the agriculture beat.
Getting started, however, may not be easy. Commercial farms require the leasing of huge tracts and contiguous land that will involve permits and the go-signal from government agencies and local government units. Security is another concern—several parts of Mindanao remain a hotbed of insurgency.
First Pacific has successes in its farming ventures in Indonesia. It controls PT Indofood Sukses Makmur, which is into palm oil, sugar, rubber, coffee and cacao production.
Indofood, controlled by the Salim family, also produces and markets cooking oils, margarine and shortening.
San Miguel and Kuok
The government, meanwhile, has recommended to San Miguel and partner Kuok Group of Malaysia 800,000 hectares of farmland in Luzon and Mindanao for a planned $1-billion joint agriculture project. The farmlands are in Mountain Province, Zamboanga del Norte, Zamboanga Sibugay, Sarangani, Davao del Sur, Davao del Norte, South Cotabato, North Cotabato and Agusan del Norte.
San Miguel and Kuok, the world’s largest listed palm oil trader, earlier signed an agreement to invest up to $1,000 a hectare to plant coconut, oil palm, rice, corn and sugar. Leasing the land and converting it into commercial farms, as in the case of First Pacific, will remain a difficult task. San Miguel and Kuok unveiled their plan in 2008 and not much since then has been done.
There is no central agency that can speed up the identification of farming lands. The Environment Department, Armed Forces of the Philippines, National Commission on Indigenous Peoples and National Power Corp. are all tasked to identify the large tracts of land suitable for commercial farming.
The government, so far, has initially identified nearly 19,000 hectares of logged-over areas in Davao del Norte as potential site for the proposed $1-billion farm project of San Miguel and the Kuok Group. San Miguel and the Kuok have committed to provide financial and technical expertise in the development and cultivation of government land and guarantee to buy all food products.
San Miguel and Kuok are leaning toward an oil palm plantation, which will compete directly with First Pacific’s Indofood. The Kuok Goup owns Wilmar International, the world’s largest listed palm oil trader.
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