AGRICULTURE is a key contributor to the Philippine economy. However, when compared to some of our Asian neighbors, our agricultural industry falls behind, especially in terms of quality processing, manufacturing and exportation.
For the Mindanao region, falling behind represents a huge untapped opportunity to advance the country’s agro-business sector. Mindanao is the country’s fruit basket after all. The Davao region, specifically, is a key exporter of various agricultural products such as banana, abaca and rubber.
With 16 percent of the 2019 national budget heading toward Mindanao, the government is clearly prepping the south of the Philippines for economic growth. But how can the agro-business sector benefit from the growing Mindanao economy?
For the Anflo Group of Cos., which includes Tagum Agricultural Development Cos., Inc. (Tadeco), Davao International Container Terminal (DICT), Pearl Farm Beach Resort, and Damosa Land Inc., the solution is simple: enable access to and support the integration of agricultural materials and processes. The conglomerate is offering its solution through the newly developed Anflo Industrial Estate Corp., a premier agro-industrial ecozone in the Davao region. AIEC is a 63-hectare industrial park that houses industrial lots and ready-built factories that international and local processors and manufacturers can either purchase or lease for five to 25 years.
“We received our Philippine Economic Zone Authority [PEZA] accreditation by 2015 and started building the park itself in 2016,” said Ricardo Lagdameo, vice president for Anflo’s real-estate arm, Damosa Land Inc. “We felt that the economy was right and that it was necessary to diversify the types of businesses in the region. The Davao region is known for fresh fruit production and export, but today we believe that the heft of the growth opportunity will be in manufacturing, especially as this relates to agro-industrial manufacturing.”
AIEC is built and zoned to boost industrial development. Unlike many industrial parks and industrial estates in the country, AIEC is located within walking distance to an international container port. It is also only 40 minutes away from an international airport. “We are providing a space that has complete infrastructure, security, unparalleled location and access to a world-class container terminal. We have also planned infrastructure for the future—wide roads, sewerage treatment facilities, 24/7 security and commercial amenities to service the workers in the park,” said Lagdameo.
Benefiting commerce, community and country
A world-class industrial park in Mindanao benefits many stakeholders. For agricultural processors, an organized industrial park makes for an efficient business setup. Since AIEC is registered under the PEZA, locators also receive tax incentives.
The agro-industrial zone also represents income for the community. Mindanao is home to almost one-fourth of the Filipino population, so the industrial park means major job creation in the region. Being located in the food basket of the country means access to various types of agricultural produce. The Davao region is known to be the leading producer of bananas, pineapple, cacao and coconut. Local farmers can thus benefit as the park brings together ready buyers of harvest. For example, AIEC’s locators include a saba processor and a banana chip manufacturer. “In five years, AIEC will be a bustling community with 4,000 to 5,000 workers, a place for farmers to sell their produce, and a driver for growth in the region,” envisioned Lagdameo.
Moreover, AIEC’s developers are part of a conglomerate that has been doing business in Davao for almost 70 years. This places AIEC apart from other industrial parks in the Philippines and in direct competition with international counterparts. According to Lagdameo, “Foreign investors look at how easy it is to do business in a country before investing in it, as well as how secure it will be for the next years to come.” And AIEC is designed to pull foreign investments into the Philippines and drive global economic competitiveness.
The global interest in AIEC
There is already demonstrable global interest in the premier agro-industrial zone. AIEC’s growing list of locators includes at least four nationalities—Filipino, Dutch, Chinese and American. Some notable locators include Del Monte Fresh Produce (stores packaging materials for their fresh fruit exports) and First Panabo Tropical Foods Inc. (processes frozen turon and saba for export). United Good Harvest (processes dried banana chips for export) is also set to begin its operations within the first quarter of this year.
“Most of our locators are involved one way or another in agri-business. Aside from food processing, we signed on a pallet manufacturer that services the needs of plantations, a company that produces packaging material for fresh fruit exporters, and a foam manufacturer which supplies material for packaging, as well. We also seem to be at the positive end of the ongoing trade war between China and the US. A number of Chinese companies are setting up in AIEC in order to be able to continue exporting to the US from the Philippines” explained Lagdameo.
In total, 65 percent of AIEC’s first phase of industrial park lots and ready-built facilities have already been leased or sold. Currently, the park is receiving multiple inquiries for the remaining 4 out of the 15 ready-built facilities that have been established. Several more units will also be constructed this year to accommodate the demand.
“What we’ve seen on our end is that locators want to come in quickly. Hence, we will be building our more ready-built facilities for locators to choose from.”
However, the current capacity represents only one of four phases of AIEC. In the next two years, AIEC will roll out two additional industrial phases and one commercial phase. Plans to place a cold-storage facility are also in the works. With major expansion in the pipeline, AIEC will certainly serve as an international business gateway for Mindanao and the country.
Fiscal Incentives In PEZA-registered SEZs, qualified companies located inside the SEZ get a 100% tax exemption via a 4-6 year initial income tax holiday. Upon
A CHINESE plastic packaging company has signed a location agreement with an industrial zone operator in Panabo City, Davao del Norte, the industrial zone’s operator said.