Medium And Small Scale Industries

Coordinated
Action Program II
WORLD SITUATION
Philippines is the only producer of
banana cardava around the world
It is the leading producer of banana
chips globally
Global snack foods market is forecast to
reach US$380 billion by the year 2017
Europe is the largest market for snack
products amounting to Euros 12.4 billion
Chips/crisps market in UK is expected to
achieve a volume growth rate of 17.5%
from 2009 to 2014.
PHILIPPINE
COMPETITI
VE
POSITION
 Planted Areas (in has)
25,000 Increased by
Total area
0.57%
planted with
average per
Banana Cardava
year from
20,000 is
181,568
185, 800
hectares in
hectares as of
2006
2010
15,000
(Source: BAS)
Davao Region has
A the biggest area 2006
r 10,000 planted accounting 2007
e for 21, 943 hectares
a 2008
or 12% of the total 2009
5,000
area (Source: BAS) 2010

Regions
Banana Cardava Production
700,000
Volume of
V Production
o was
l 600,000 Increased by
u 3.45 % from 2,632,692 MT
m 2,285,809 MT in 2011
e 500,000 (source: BAS)
in 2006 Davao Region
i
n 400,000
is the biggest
producer with
M 579, 464 MT
T 300,000
in 2010 2006
2007
200,000 2008
2009
2010
100,000

Regions
 FARM GATE PRICE
an
average
growth of
8 PhP 0.45
6.87
annually
7 (source:
6.19 BAS)
6 5.48
5.31

peso per
54.6kilo 4.52

3
Farm Gate-green
cardava
2

0
2005 2006 2007 2008 2009 2010

Year
 BANANA CHIPS: VOLUME AND VALUE OF
EXPORTS

60,000
Year 2007-2011
50,000

40,000

Quantity30,000
(MT)
F.O.B. USD
20,000
Value in
Thousand
10,000

-
2007 2008 2009 2010 2011

Source: BAS
 BANANA CHIPS: EXPORT DESTINATION

Average Percentage of Export, 2007-2011

Export value
increased by
15% per year
from 2009 to
2011.
9%
15% 30%

Vietnam
19%
28% USA

Germany

United Kingdom

Singapore

Source: BAS
BANANA CHIPS: LOCAL MANUFACTURERS

No. of
Areas
Manufacturers
Luzon 6
Visayas (Cebu) 4
Mindanao 31
Davao Region 27
Other Region 4
Grand-total 41
 VALUE CHAIN MAP FOR
BANANA (CARDAVA) INDUSTRY

Functions Tasks
Actors Involved Enablers
Consumpti
Consuming Consumers
Consumers
on
DTI , BOC, ISO and other
International QAB, PBGEA
Trading/Ret
Commercia Local
ailing of Local Exporter
l trading Traders Exporter
Banana Traders
Chips

Banana Chips Backyard

Backyard Processing
Processing
Processin
Processing Processors
Processors Firms
Firms
DTI , FDA,
g
FPA & DOST

Fresh Trading of
banana fresh/frozen Local
Local Traders
Traders Exporter
Exporter
trading banana
LGU & DTI, BOC,
Consolidati
Consolidat on of Raw Green
Green Banana
Banana PBGEA
ion Banana Consolidators
Consolidators
Cardava

-Plant Plantation
Production -Grow Smallholder
Smallholder Plantation
-Harvest ss Owners
Owners
Funding Institutions, LGU,
PAO, DAR, DA, PBGEA
-Provide planting
Banana Nursery
Nurseries
materials Nursery
Operators
Operators
 COST OF
INVESTMENT
 BANANA
ASSUMPTIONS:
Net House Size=15x20meter; with a capacity
NURSERY
of 5,000 meristem

The two months of operation can supply Total Investment

meristem to 6 to 7 hectares Cost :
There will be one month interval for the PhP 194,000.00
preparation of the next operating cycle

There will be 4 cycle of operations per year

Average Net Income
:
Mortality rate is equivalent to 15% per cycle PhP 68,500.00

Selling and Administrative is 2% of Total Sales ROI : 35%

Selling Price is Php 20.00 per meristem Payback Period :

Depreciation is computed using straight-line Approximately 2
method Years
ASSUMPTIONS: BANANA
Total Project Cost is good for one
hectare PRODUCTION
Total population is 625 hills per
hectare (distance=2m to 8m). Total Investment
First harvest is on the 18th 21st month Cost :
after planting. PhP 150,000.00
After first harvest, production cycle is
6 months or twice a year.
Selling price is Php 6.00 per kilo and
Average Net
estimated to increase by 10% annually.
Income :
Average weight of banana is 28 kilo PhP 139,400.00
per bunch.
Rejects is estimated to be 3% of total ROI : 93%
harvest
The productive life of banana cardava
is 25 years. Payback Period :
Land Development Cost is amortized 3 Years and 3
for 5 years.
Depreciation and Amortization are
Months
computed using straight-line method
ASSUMPTIONS: BANANA
Production capacity per year is 14,040 kilos of fried
banana chips CHIPS
Capacity Utilization on the first year is 60% and will PRODUCTION
increase by 30% annually

Working capital is equivalent to 1 month Total Investment

Recovery rate from peeling and frying are 50% and Cost :
33% respectively
Fried banana chips is packed in 160-gram, 80-gram, PhP 258,000.00
and 40-gram
Selling price is based on cost, mark-up is 50%
Average Net Income
1-kilo of cooking oil required 6 kilos of sliced
banana
:
1-kilo of sugar required 12 kilos of sliced banana PhP 510,300.00
The production will need 6 workers
1-sack of charcoal required 100 kilos of peeled
ROI : 198%
banana

Sales mix ratio is 50% for 160-gram; 40% for 80-

gram; 10% for 40-gram pack Payback Period :
Labor cost is based on output
9 Months
SWOT ANALYSIS
 Recommended Action Plan
Constraint
Volatile prices of inputs
(Agricultural and processing)
Unpredictable Supply of Banana
Cardava
Weak Organization of growers
Unorganized Processors
Strict Requirements of importing
countries
Recommendation Responsible
Promotion and facilitation of bulk buying to processors DTI, DA, and LGU
and producers
Promoting plant now, pay later LGU, Funding
Develop potential areas for banana cultivation Institution, DA,
Provision of appropriate support services and facilities Farmers
Strengthen research and development on production,
post-harvest, and processing
Improvement of cultural management practices
Capacity building through private business providers, DA, DOLE, CDA, and
trainings, dialogues LGU, Growers
Strengthening, membership in the banana industry
cluster.
FGD, Meetings, Strategic planning DTI , DA, and LGU,
Organization and institutionalization of banana Processors
processors/exporters, membership in the banana
industry cluster
Training on quality standards, benchmarking DOST and DOLE,
Product and technology upgrading DTI, BFAD, Growers,
Encourage growers and processors for certification Processors
(HACC, GAP, etc.)
END OF
PRESENTATION