BOI approves registration of Php5.7B Purefoods Hormel Project, welcomes local cassava farmers’ sourcing scheme

The Philippine Board of Investments (BOI) recently approved the application for registration of Purefoods Hormel Company Inc. as an expanding producer of processed meat, specifically hotdog production under the preferred activities of the Agribusiness and Fishery sector of the current Investment Priorities Plan (IPP).

The Php5.68 Billion project qualified for “commercial processing,” which entails the conversion of agricultural and fishery products or wastes to a form ready for further processing or final consumption.

The company, which is a joint venture between conglomerate San Miguel Corporation and Dutch firm Hormel Netherlands Inc. has been into meat processing since 2006. The project which is expected to start commercial operations in December 2017, will increase the current capacity of 60,000 metric tons per year (MTPY) by an additional 61,200 MTPY, effectively doubling its capacity in its plant in General Trias, Cavite.

Once operational, the company will hire an additional 1,242 personnel to boost its operations. The company will use domestically-produced and imported raw agricultural products. Locally-sourced raw materials include meat, spices and casings. Around 98 percent of the produce will be sold to the domestic market with the remaining will be for the export market.

A notable feature of the project is the company’s plan to collaborate with the local farmers within its area of operations for the supply of cassava feeds for its hogs.  Hogs, a major raw material in the production of hotdogs, will be raised using feeds made out of cassava.

Through the company’s Cassava Assembler Program, about 500 individual farmers are organized into a cooperative that cultivate about 500 hectares of cassava plantation. A hectare can cultivate around 1,000 to 1,500 metric tons of cassava.  The cassava yielded will be solar dried and processed into cassava feed chips which will then be supplied as feeds for the hogs.

The program features a guaranteed market with purchase agreement, guaranteed floor prices, start-up technical assistance, and research and development activities to improve yield and quality.

Trade Secretary and BOI Chairman Ramon Lopez lauded this program component of the project saying “the undertaking supports the thrust of the administration to further promote rural and value chain development towards increasing agricultural and rural enterprise productivity”.

He also said that the project is also in line with the government’s inclusive business (IB) thrust which aims to reduce poverty, generate more jobs, and sustain inclusive growth.   The BOI, he said, is encouraging registered enterprises to adopt IB strategies that provides goods and services and income and decent work opportunities for the low-income segment of the society within the enterprise’s supply or value chain, directly contributing to the improvement of living standards and poverty reduction.

Purefoods Hormel is one of the largest meat processors in the country.  The meat processing industry in the Philippines is a Php300 billion annual market and provides jobs to around 300,000 Filipinos, according to data from the Philippine Association of Meat Processors Inc. (END)