CHAPTER I

THE PROBLEM AND ITS BACKGROUND

INTRODUCTION
Black rice is a kind of pigmented rice with aromatic nutty flavor that is
cultivated from Asia. It is also called Forbidden rice and is believed to be consumed by
Chinese royalties and forbidden among the subjects. Often sold as un-milled rice, its husk
is still intact which gives the rice its deep-purple color (Kong et al., 2008). Advocates of
organic farming encourage local farmers to plant pigmented rice such as black rice (Go
Organic! Philippines, 2017). As the government promotes the organic farming of black
rice, the situation gradually changes and leads to expansion of land areas dedicated to
cultivation of black rice and other pigmented rice. Trends in food and beverages may
change over time but one thing remains the same; to produce a food that will give people
good health and address timely medical issues. Functional foods or foods with health
benefits beyond basic nutrition are becoming a subject of high interest and high demand.
There is rising interest for deep purple plants that is generally known for high antioxidant
content such as acai berry, blueberries and especially black rice. Black rice beats the
nutritional benefits of brown and red rice combined. There exists no other rice with a
higher nutritional spectrum near black rice. The trend in using black rice is fast growing
as it is now labeled as the ‘new superfood’. High in nutritional value, black rice is twice
stronger with respect to antioxidant activities compared to blueberries (Ichikawa et al.,
2001).

Aside from utilization of such amazing crops, another trend in food and
beverages today is the growing demand for plant-based food products. As plant-based
milks, meat alternatives and vegan offerings have rapidly moved into the mainstream,
consumers are looking for innovative options to take the inherent benefits of plants into
their daily lives. According to a recent beverage industry report, probiotic beverages are
gaining huge popularity from consumers. Probiotics are live microorganisms that provide
health benefits by improving the balance of intestinal flora. Probiotic beverages detoxify
the body and give energy boosts. Probiotics are found in yoghurt and other fermented
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products like kefir, naturally aged cheese like Gouda, fermented soybean foods like miso
and tempeh, naturally fermented sour pickles and cabbage like sauerkraut and kimchi,
sourdough bread, and the fermented tea kombucha (Kearney, 2010).

OryFir Philippines Inc. will produce high quality plant-based kefir drink from
black rice that is grown locally and organic. It targets the local and international food and
beverage market. As a by-product, black rice residue from the extraction of rice milk will
be processed to produce animal feeds. With the growing supply of black rice in the
country OryFir Philippines Inc. will utilize it to produce product that will be sold locally
and will be exported in the following years.

OBJECTIVES OF THE DESIGN

The general objective of this study is to design a plant that will utilize the
organic and locally grown black rice into a type of probiotic drink called kefir.
Furthermore, this project also aims to study the outcomes of building this processing
plant in terms of providing a solid market for black rice to help the local farmers. In
achieving the success of this project, we must first accomplish these following sub-
objectives:
1. To conclude the most appropriate design of equipment and processes for the
production of black rice kefir.
2. To assess the supply and demand of probiotic drink in the Philippines.
3. To provide suitable packaging for the main product and the by-product of this
project.

Specifically, the objectives detailed herein are elaborated and evaluated in the
following:
1. To evaluate the factors of financial aspect and the socioeconomic impact in
manufacturing black rice kefir.
2. To provide the readers with in-depth knowledge about the production of kefir
from rice milk.
3. To mark off target market concerning the demand of probiotic drinks kefir.

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4. To support ecosystem of social entrepreneur in the Philippines by consolidating

with local cooperatives.

BACKGROUND OF THE STUDY

Filipinos nowadays are being conscious of what they eat or drink because of the Commented [MACA1]: Ariding conciousnessd

trend of being healthy. At the same time, they want a convenient and affordable product.
In that note, the proponents opt for a product that meets Filipinos want, a cultured milk,
the kefir which is healthier than yoghurt (The Healthy Home Economist, 2018).

In 1935, Japan introduced Yakult a cultured Lactobacillus casei strain by Dr.

Minoru Shirota. Yakult has concluded its business activities around the world in ways
based on Dr. Shirota’s philosophy- Shirotaism (preventive medicine, the idea that a
healthy intestinal tract lends to a long life). According to the Yakult’s Annual Report
2017, there are 32,366,000 bottles of Yakult per day that are being sold in Asia on which
2,466,000 bottles of this are from Philippines. Commented [MACA2]: 7.62 % 5th? Thousand bottles per day

Black rice is especially rich in anthocyanin pigments, phytochemicals, protein

and vitamins. China cultivates most of the black rice followed by Sri Lanka, Indonesia,
India, Philippines (Ichikawa et al., 2011).

Rice milk is made from milled rice and water. It is the least allergenic of all Commented [MACA3]: Rice milk is the least allergic of all
alternative milk products, contains more carbohydrates, and less
alternative milk products, making it a good option for those with lactose or nut allergies. calories, less fats

Rice milk is the third most popular non-dairy alternative next to soy milk and almond
milk. Drinking rice milk supplies many essential nutrients via the bran and germ of this
whole grain. Rice milk contains more carbohydrates than cow's milk. One cup of rice
milk contains about 140 calories, compared to 185 calories in a cup of whole cow's milk,
and 97 calories in a cup of skimmed cow's milk. Rice milk contains about three grams of
fat per cup, while whole cow's milk contains about 11 grams per cup. Rice milk is also a
tasty alternative for vegetarians who are allergic to soy. Rice milk is first and foremost

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lactose-free. It is for this reason it has become one of the go-to beverage of individuals
who suffer from cow milk protein (CMP) sensitivity. Meanwhile, a study has found that
children with CMP allergy tolerate it better than cow or soy milk. Rice milk appears to be
better absorbed by infants’ stomachs, too, as was shown in yet another study.

A study was conducted to evaluate the properties of kefir prepared with a

combination of goat milk and black rice extract and its influence on the improvement of Commented [MACA4]: Study about properties of kefir
prepared with a combination of goat milk
beta-cells in streptozotocin-nicotinamide (STZ-NA) - induced diabetic rats. Substitution
of goat milk with black rice extract in kefir fermentation could decrease their pH and
increase in radical-scavenging activity. Inulin addition was able to increase (p<0.05) in
radical-scavenging activity of kefir. To improve insulin-producing pancreatic beta-cells
in diabetic rats, it was required at least 2.0 ml dose of kefir combination from goat milk
and black rice extract to achieve similar effect to glibenclamide as antidiabetic agent
(Sahewa, 2015). In line with this the proponents came up with the idea of utilizing the
black rice milk as a kefir.

SCOPE AND LIMITATIONS

1. Plant Location
The proposed plant will be situated at Naujan, Oriental Mindoro. The area is Commented [MACA5]: Add land area

chosen because it is near from the farms that can supply black rice and also to help the
people in terms of job opportunities. (Include land area)

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Figure 1. Plant Location (include source and change picture/ zoom in)

2. Production Level
The proposed black rice kefir plant will utilize 102, 3300 kilograms per year of
black rice. The process will then produce the black rice kefir. The production will be 341
days per year. Shutdown of operations will be done every month for 2 days to perform
the necessary maintenance and repairs on different parts of the plant and as the need
arises.

3. Raw Materials Availability

The supply of black rice will primarily come from Mindoro Organic Farmers
Association (Naujan, Oriental Mindoro) and Tamaraw Organic Black Rice (Bongabong,
Oriental Mindoro) and other farmers nearby with backup suppliers from Davao and
Cotabato. The total amount of black rice which will be utilized represents 5.23% of the
country’s black rice production. Kefir grains will be supplied by Weenteem Ltd. Hong Commented [MACA6]: 1956.022 MT or 2000 MT
Commented [MACA7]: WRONG!!
Kong, while alpha-amylase enzyme will be supplied by NOOR Enzymes – World of
Enzymes, OryFir Philippines Inc. will generally utilize supply and forward-purchase
contracts to help ensure availability and help manage the volatility of the pricing of raw
materials needed in its operations. The company is nonetheless highly exposed to

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changes in the price of commodities. Other raw materials are black rice, kefir grains, sun
flower oil, iodized salt, water, maltose (comes from kefir grains), and alpha-amylase Commented [MACA8]: Wutt?

enzymes.

Other Nueva Ecija,

Provinces, 20.36%
30.03%

Isabela,
15.72%

Mindoro, Iloilo,
5.23% Pangasinan,
8.52% 11.49%
Cagayan,
8.65%

Figure 2. Percentage of Production Supply of Black Rice (verify)

4. Years of Projection, Capture Market and Availability

OryFir Inc. is projected to operate for 25 years after its construction in 2023. It is
based on the growth prospects for probiotic drinks. According to EcoFocus, 46% of
grocery shoppers are actively looking for beverages that contain probiotics. Functional
beverages will continue to grow in popularity as consumers reach for healthier drinks.

The company focused on the market of black rice kefir that can fit into
consumers’ lifestyle by pioneering technology transfer in order to capture the unmet
consumer demand for safe, nutritious, affordable and branded kefir product. The target
consumers will be from all ages of the population, consumers in developing countries,
lactose-sensitive population, and consumers with dietary preferences like vegetarians. It
also regards potential foreign market as well. Statistics provided by Technavio have

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showed that the probiotic drinks market will grow at a CAGR of more than 7% by 2020.
Thus, the product can be said to be marketable.

The company is expected to expand its availability and distribution to make its
products accessible to consumers in its goal to improve the quality of life of Filipinos. It
is likely to focus first on establishing consumer patronage in the local markets. The Commented [MACA9]:

company will carry out this goal by continually educating consumers on the importance
of probiotics to digestive health and to overall wellness.

5. Technical Limitations and Capabilities

This study focuses on producing Black Rice Kefir. By-product will also be
considered which includes the production of animal feeds. Dry milling will be applied as
one of the process involve in converting the insoluble residues of black rice into the said
by-product of OryFir Inc. The company will provide necessary levels of sanitation, Commented [MACA10]: Process method for the by-product

means of preventing product and material contamination and means of preventing or

limiting product, raw material, and intermediate product deterioration due to naturally
occurring processes by running in a semi-automated mode.

Great caution will be exercised to achieve high levels of product purity and
preserve product integrity. Each process (e.g. fermentation, emulsification,
homogenization, pasteurization sterilization, biological waste treatment, etc.) has many
conventional unit operations but it also involves processes which differ greatly from
those usually encountered in the production of probiotic drinks.

Sanitation, which helps prevent contamination, will be facilitated by providing

or using impermeable coated or tiled floors and walls, special traps for such drains,
pitched floors that ensure good drainage, polished vessels and equipment that do not
contain dead spaces and which can be drained and automatically cleaned in place,
sanitary piping, clean-in-place (CIP) systems, heat exchangers and other types of
equipment which can be readily disassembled for cleaning if necessary, clearances for
cleaning under and around equipment, grouting to eliminate crevices at the base of

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equipment support posts and building columns, tubular pedestals instead of support posts
constructed from beams. Air flow and human traffic flow patterns should be maintained
to eliminate possibilities of containment transfer from dirty areas to clean ones. Very high
levels of sanitation will be provided for the final product due to processing temperatures
and conditions that favor microbial growth.

6. Equipment Limitation
The major equipment needed for the production of black rice kefir includes: rice
washing machine which will clean the rice grain; reception, storage and cooling tank
which will store the extracted milk from the grain and the final product; pasteurizing tank
for the pasteurization of the milk; fermentation tank which will ferment the kefir; mixing
tank that will mix the solution and heat exchanger to achieve the different temperature
requirements. The specifications of the equipment will be defined by OryFir Inc. and will
then be purchased.

7. Environmental Limit
The company will be governed by the existing Philippines laws and regulations,
provisions of local ordinances like the ISO 14000: environmental management that exists
to help organizations (a) minimize how their operations negatively affect the
environment (i.e. cause adverse changes to air, water, or land); (b) comply with
applicable laws, regulations, and other environmentally oriented requirements; and (c)
continually improve in the above, ISO 50001: energy management standard is a proven
framework for industrial facilities, commercial facilities, or entire organizations to
manage energy—including all aspects of energy procurement and ISO 31000: risk
principles serve as the guideline, method, logic, design, and implementation for the risk
management framework and its process. Also local agencies’ necessary permit and
licenses, like Department of Environment and Natural Resources (DENR) for
Environmental Certification.

For the implementation of good agricultural practices requirements in

compliance with the regulations of Department of Agricultural (DA).

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For the implementation of health and consumers’ safety requirements in

compliance with the regulations of Department of Health (DOH) and the Food and Drugs
Administration (FDA).

For the implementation of various required taxes in compliance with the

regulations of the Municipal/City Treasurers Office, Department of Trade and Industries
(DTI) and Bureau of Internal Revenue (BIR).

For the implementation of various requirements in labor and employment in

compliance with the regulation of the Department of Labor and Employment (DOLE).

The final product will comply with various rules, regulations and certifications
required by the law.

8. Financial Limit
Initially, seventy-five percent (75%) of the total capital investment will come
from the investors and stockholders. It includes the cost for the construction of the plant,
equipment and material procurement, operation and the manufacture of the products.
Also, they are responsible for making direct sales, marketing and all other operational
task involved to make the company successful. On the other hand, the remaining twenty-
five percent (25%) will be borrowed from the bank that is assumed to have an interest of
nine percent (9%). The price of the product to be manufactured and sold shall be set
according to the materials utilized, process used and the current market pricing.

SIGNIFICANCE OF THE STUDY

The aim of this study is to help the following by producing a probiotic drink in
which rice milk will be extracted from black rice and will undergo fermentation with the
introduction of kefir grains that will later become the final product – the black rice Kefir.
This study is deemed beneficial to the following:

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To the farmers, this study will contribute to social and economic development.
One of its goals is societal stability through local employability and employment
opportunities. The farmers are aggressively expanding the cultivation of black rice
following the huge potential demand for this type of rice both local and abroad. It will
also benefit the farmers, which could augment their income because the plantation of
black rice may expand due to the mass production of the product. This will encourage the
cultivation of black rice productivity in terms of product innovation.

To the consumers, as they look to adapt their diets to be conducive to a healthier

lifestyle, many are embracing kefir, a nourishing and flavorful ingredient that has long
been praised for its probiotic content, protein richness and its aid indigestion. The market
of kefir is anticipated to be driven because of its unique nutrient set that benefits human
body in several ways. It will benefit consumers especially those who are largely health
conscious.

To the food industry, black rice and kefir grains can be utilized into a specialty
product that has the potential for being the next ‘superfood product’ that could fill the
Philippines store shelves. It will also trigger the interest of the entrepreneurs and
manufacturers for product development and improvement.

To the country’s economy, it will aid for the proposal of the government to Commented [MACA11]: Add significance for the investors

further utilize or incorporate black rice and kefir grains into product. The production of
black rice kefir will also bring net economic benefit to the country.

DEFINITION OF TERMS

Black rice. It is a type of the rice species Oryza sativa L. which is glutinous, packed with
high level of nutrients and mainly cultivated in Asia. This rice includes several varieties
with a long history of cultivation in Southeast Asian countries such as China, India and
Thailand (Kong et al., 2008). The basic raw materials, it is used in producing black rice
milk which is the fermented to manufacture a kefir drink.

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Cultivation. The act or process of growing living material (as bacteria or viruses)
in prepared nutrient media (Merriam Webster Dictionary, 2014) This process is Commented [MACA12]: Do not use Dictionary

used during the fermentation of the probiotic drink.

Detoxify. Reduction and chemical alteration of the toxic properties of a alteration of the
toxic properties of a poisonous substance, which, when taken into the body by ingestion,
inhalation, injection or absorption, causes damage to structure and interferes or disturbs
normal physiological functions. (Weatherby, N.D., 2016) One of the benefit of the
product.
Functional food. A functional food is a typical food that has specific nutrients added to
it, like vitamins or minerals, fiber, or probiotics or prebiotics. In general, this includes
anything added for a specific functional purpose. (Hutt, PhD, RD, CFS.,2014) Black rice
kefir is one example of functional food.
Indigenous rice. A rice varieties traditionally cultivated and maintained by farmers
which contain high level of genetic diversity and can serve as potential genetic resources
for improving yield, resistance to pests and pathogens, and agronomic performance
(Mandel et al., 2011). Black rice as one of the indigenous rice that will be used in the
process of making kefir.
Intestinal Flora. The bacteria normally residing within the lumen of the intestine; some
are aids in digestion and food breakdown. (Health Dictionary for Health Professions and
Nursing, 2012). The product promotes the growth of goof bacteria in the intestinal flora.
Organic. Produced or involving production without the use of chemical fertilizers,
pesticides, or other artificial chemicals. (Oxford Dictionary, 2018) The company used
organic black rice for the product have more nutritional content.
Plant Milk. Any milk-like product that is derived from a plant source. (English
Wiktionary, 2015) It is the basic medium for the fermentation of the probiotic drink.
Probiotics. Live bacteria and yeasts promoted as having various health benefits. They are
usually added to yogurts or taken as food supplements, and are often described as 'good'
or 'friendly' bacteria (NHS, 2014). Probiotics is the beneficial bacteria present in the
product.

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Unmilled. Also known as unpolished ricehas only the husk removed. It means that the
fiber, vitamin and phytochemical richcoating of the rice are retained (Kimbell, 2016).
Unmilled black rice is the one used in the process of producing black rice kefir

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