With its supposed launching last month postponed indefinitely, the viability of the P25-million abaca fiber processing facility in Caramoran is now being doubted.
Implemented pursuant to the Philippine Fiber Industry Authority (PhilFIDA) under its Abaca Tuxy Special Buying Project (ATSBP), the facility at Sabangan, Caramoran was scheduled to be turned over to the Caramoran Abaca Fiber Producers Cooperative (CAFPCO) last April 2024.
No reason was given for the delay in the launching of the project although the Tribune confirmed that both the local and national offices of the agency were working together to look for direct buyers and market linkages for the expensive grade of abaca fiber that the facility is intended to produce.
In an interview recently, Provincial Fiber Officer Roberto Lusuegro disclosed that his office has already sent samples of the S2 fiber to handicraft makers in the Bicol mainland.
“If the cooperative will have direct buyers and access to major end-users like big fiber processing companies, mas magayon,” he remarked, adding that in the absence of such direct access, the cooperative will have to spend more for logistics and operational costs.
“This direct market linkage is being worked out by both the PhilFIDA regional and national offices,” he added.
He disclosed that pending the realization of the market linkages, an arrangement has been set with a local fiber trader which will buy the S2 fiber to be initially produced by the Caramoran facility
Lusuegro earlier said that the amount of P2.75 million allocated as seed capital for the facility’s operation has already been downloaded to the cooperative, but it cannot be utilized until the plant begins running.
This is part of the P5 million reportedly promised to CAFPCO, with the balance of P2.25 million to be released once the facility begins operating.
According to the official, operating costs of the project would range from P3 million to P5 million per month, covering the cost of buying the tuxy daily from some 200 farmers from Sabangan, Tubli, Mabini, Sabloyon, Panique, Camburo and nearby villages.
He bared that Catanduanes can supply the fine fiber requirements of prospective buyers as majority of the island’s plantations are of the abuab variety, with the Tubli area alone accounting for as much as 18,000 kilos of fiber monthly.
Initial tests conducted at the Caramoran show that using the five stripping and decorticating machines, the facility can process an average of 250 kilos of tuxy, the thin ribbon-like outer layer of the leaf sheath that contains the fibers, per day.
A comparative test of similar 56 kilos of tuxy also indicated that manual stripping produced 6.5 kilos of “rough” fiber of the cheaper I or G class while the mechanized stripping produced 4 kilos of the more expensive S2 fiber.
LOWER FIBER YIELD, LACK OF MARKET LINKAGE
However, an official of the cooperative pointed out that the actual seven (7%) percent yield of mechanized stripping is significantly lower than the 10 percent dry fiber yield utilized by PhilFIDA in its proposal for the ATBSP.
At this fiber yield, the S2 fiber should be bought at not less than P160 per kilo for the cooperative to earn a profit, he said.
“The project would be a failure if PhilFIDA will not be able to assure a stable market for the facility’s fiber production,” the official stressed.
If the co-op will buy the tuxy from its member-farmers at P5 per kilo, to sell the produced dry fiber at P!00 per kilo would mean a loss since it would have to pay for the hauling and transport costs, aside from other operational and administrative expenses, he added.
On the other hand, if the market for fine fiber cannot be assured, the cooperative will have to engage in the trading of lower grades of fiber as its primary activity and thus ensure that local farmers would get a higher profit margin compared to selling their produce to middlemen.
An official of another cooperative that engaged in abaca trading a few years back also claimed that it tried to use mechanized stripping to produce S2 fiber but managed to achieve only a maximum of 4.5 percent fiber recovery rate.
Farmers used to sell their tuxy to its processing facility but soon tired of lugging the heavy load and went back to manual stripping.
The co-op had to purchase a truck and hire personnel to do daily rounds of tuxy buying from farmers, resulting in higher operational costs.
The official recalled that when they told visiting buyers how much the co-op would sell the fine fiber, the buyers said they would not be able to afford the price.
He likewise claimed that some farmers also inserted thicker-than-usual tuxy into their “bulto” which would result in higher weight but did not increase the yield.
Then there is also the seven to 12 percent loss in weight due to the drying of the fiber as well as the cost of transporting the same from the facility to the buyer.
“The fiber has to sell above P100 per kilo or even as high as P150 for the cooperative to gain a profit,” he pointed out,
It is just a matter of pricing and the marketing of the fiber have to be considered carefully as the co-op cannot sell to traders who will buy it at a lower price, the official stated.
“Direct marketing is possible but difficult to sustain in actual practice,” he warned, adding that if the ideal set-up is not obtained, the cooperative would be literally throwing away money.
As for engaging in abaca trading, he recommended that the farmers’ group use a higher figure of 15 to 20 percent for “resiko” or shrinkage compared to the usual 10 percent, just to break even.
Some barangay traders recover the difference between the 10% “resiko” and the actual weight by manipulating their weighing scales.
According to PhilFIDA’s Lusuegro, the CAFPCO has been advised to prepare a new business plan for the operation of the abaca processing facility as the initial plan needs revision due to the difference in the price of tuxy in the island compared to that in Mindanao used in the agency’s study.
OTHER OPTIONS FOR ABACA FARMERS
The agency’s top abaca official here also said that central office personnel recently visited the island to conduct an assessment of the efficiency of the Modified Abaca Stripping Knife (MASK) it distributed to 585 farmer beneficiaries last year.
An interview of 180 abaca farmers who used the knife said they noted good results and improved quality of fiber.
But he conceded that last year’s drop in the price of abaca fiber forced some farmers to seek jobs, usually in construction, in the mainland as their daily income plummeted to less than P300 per day due to the low price of fiber.
However, Lusuegro revealed, fiber prices have begun to recover, rising from the previous P15-20 per kilo to the present P50-P52 per kilo.
Many abaca farmers associations are also realizing the importance of abaca processing, having been trained by PhilFIDA before, as abaca-based products provide a steady source of livelihood due to its better price and the use of higher-grade fiber.
“Our abaca farmers should emulate handicraft makers in the mainland who persist in developing value-adding activities using abaca fiber and even abaca waste,” he said.
To help push the production of high-grade fiber, Lusuegro bared that his office has requested the Talino at Galing ng Pinoy (TGP) partylist group to provide portable stripping machines for organized abaca farmers associations in all 11 towns.