Processed Fruits and Vegetables

21 June 2011

Introduction

The Philippine processed fruits and vegetables sector has the following coverage:
a) Jams, jellies, marmalades and processed/preserved fruits;
b) Juices, purees and concentrates;
c) Dried or dehydrated, drained, glazed and crystallized fruits;
d) Processed vegetables;
e) Processed nuts and coconut products; and
f) Sauces, condiments, spices and mixes.

Major fruits processed for exports include pineapple, mango, banana, soursop (guyabano), papaya, guava,
calamansi (lime), dalandan (orange), jackfruit, tamarind, strawberry, raspberry, palm fruit (kaong) and coconut.
Coconuts are generally processed into desiccated coconut, coconut chips, coconut water and coconut milk
(liquid/powder).

Commonly processed vegetables and root crops include ginger, onion, potato, cassava, ube (yam), cucumber,
green peas, chick peas (garbanzos), soybeans, sweet corn, mushrooms, tomatoes, ampalaya and carrots. These
vegetables are canned, pickled, quick frozen, and made into purees, sauces, pastes, catsup, soups and broth.

Majority of the players in the sector are micro-, small- and medium-sized enterprises (MSMEs), but key players
are large firms composed of Del Monte Philippines, Dole, T’boli Agro Industrial Development Corp., Ram
Food Products, California Manufacturing Corp. and Sysu International Inc.

Major export markets are USA, Japan, Canada, South Korea, The Netherlands, China, Hongkong, UK, Vietnam
and Australia covering 81% of the country’s total exports of processed fruits and vegetables.

% Share of Major Export Market 2010

Others, 19.1

Australia, 2.1

Vietnam, 2.2
UK, 2.4 USA, 48.6
Hongkong, 3.6
China, 3.6
Netherlands, 3.9

South Korea, 4.1

Canada, 4.4 Japan, 6.0

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 Market Opportunity

Global Demand for Processed Philippine Fruits and Vegetables

• Increasing trend in processed
fruits and vegetables exports Phil. Exports of Processed Fruits & Vegetables
with an average yearly growth of
about 7% for the period 2006 to 500.00 386.76
316.93 367.25 368.62 377.55
2010

US$ Million
400.00
• Major processed fruits exported 300.00
include prepared/preserved fruits 200.00
accounting for 53% of total 100.00
-
exports; juices/concentrates and
2006 2007 2008 2009 2010
purees accounting for 24%; and
dried fruits accounting for 18% Year
Source of Data: BETP
• 2010 export proceeds amounted
to US$386.76 Million or an increase of 2.44% from 2009 and exported to 108 countries

Increase in Demand
Projected Philippine Exports of Processed Fruits & Vegetables
• Export projection for the next five
Year Value (US$ Million) (5) years would require an additional
2011 413.83 production of about US$ 542.46
2012 442.80 Million worth of processed fruits
2013 473.80 and vegetables by 2015
2014 506.97
2015 542.46
Philippine Advantage

Natural Resources
• Abundance of a variety of fresh fruits and vegetables in the country that are generally cheaper during
peak season
• Readily available secondary inputs such as sugar, salt, coconut oil, corn oil, etc.

Technology that Supports the Industry

• Production process mostly manual to semi-mechanized using locally designed and fabricated
production machinery and equipment
• Those in the production of dried mangoes, fruit purees, fruit cocktails/ mixed fruits and fruit juices use
fully automated production line

Strong Support from Government/Industry Association

• Support from the government through designation of brand management teams to supervise the export
promotion of the sector
• Centerpiece agriculture program dubbed as FIELDS, which aims to sustain agricultural growth and
modernization to ensure long-term food security and sufficiency. The program involves the
provision of six major interventions as follows:
- Fertilizer and other inputs (fertilizer subsidy program and promotion on the use of organic
fertilizers through the Organic Fertilizer Production-Tamang Abono Program);
- Irrigation and other rural infrastructure (availability of irrigation systems and 2,158 km. of farm-
to-market roads (FMRs);
- Extension and education, R&D and training (various training courses and training-related

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 activities as well as research and development activities);
- Loans, guarantee and insurance coverage;
- Dryers and other post-harvest facilities; and
- Seeds of high-yield and sturdy crops

Support Industries/ Infrastructure

• Contract growing arrangement with farmers to ensure continuous supply of raw materials and
maximize the volume of production as well as support farmers’ growth
• Availability of post harvest handling and storage facilities through the implementation of the
Philippine National Cold Chain and Tramline Program by the Department of Agriculture
• Establishment of cold chain facilities in three major producing areas, namely: Benguet in Northern
Philippines (with alternative routes Mt. Province-Benguet-Manila Line and Cagayan-Manila Line),
Cebu in Central Philippines (with alternative routes Visayas Inter-island Connections) and Bukidnon
in Southern Philippines (with alternative routes Mindanao-Cebu-Manila Line)
• Presence of dynamic industry associations
- Philippine Food Processors and Exporters Organization, Inc. – focuses on planning, development
and sourcing of raw materials, improvement of manufacturing efficiency and productivity,
promotion of sound trade practices, among others
- Philippine Exporters Confederation, Inc. – mandated to strengthen the country's export industry
through its export promotion and development programs

Ideal Locations
• Most processing plants are located in
the National Capital Region, Region CAR - Vegetable
IV, Region VII, Region X and Region producers
XI
• Top vegetable producers are the Luzon-mango producers
Cordillera Region and Mindanao NCR Region IV
(Davao City, Davao del Sur, Coconut growers
Compostela Valley, Bukidnon and
Misamis Oriental) supplying Manila,
Southern Luzon and the Visayas.
• Luzon is the top mango producer;
Region X-
banana production are mostly in Region VII pineapple
Davao and some parts of Mindanao
• Region IV and XI are the largest Mindanao-vegetable
coconut producing regions and have producers
the most number of coconut Region XI-banana
processors in the country & coconut

Human Resources
• Large pool of skilled labor, which is advantageous to investors with limited capital equipment
investment.
Government Support
Enabling Laws/Policies
• Philippine Development Plan (MTPDP) 2010-2016 – government assistance through international
promotional events, inbound business matching and addressing the market access issues resulting from
new requirements of target and growth markets; strengthening the certification system for Good
Manufacturing Practices (GMP), Hazard Analysis Critical Control Point (HACCP), and ISO 22000
• Agriculture and Fisheries Modernization Act (AFMA) – duty-free importation of all types of
agriculture and fisheries inputs, equipment and machinery
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R&D Support
• Research and Development support from the Department of Science and Technology (DOST),
particularly the Philippine Council for Agriculture, Forestry and Natural Resources Research and
Development (PCARRD) and Industrial Technology and Development Institute (ITDI)
• Continuous provision of technical assistance from Food Development Center (FDC), the Food and
Drugs Administration (FDA), the Philippine Association of Food Technologist (PAFT) and the
Academe
Costs of Doing Business
Estimated Investment Cost
• US$255-848 per ton of processed fruit/ vegetable

Salaries and Wages (per day)

• NCR – Php 426.00
• Regions/Provinces – Php 204.00 – 337.00

Rentals, Lease, Acquisition (per month)

• Commercial space lease – US$2.0–9.0/ sq.m.
• Office space rental – NCR: US$10-12/ sq.m.; Regional/Provincial: US$5-6/ sq.m.
• Within an economic zone – lease of lots – US$0.40/ sq.m.
– lease of buildings – US$1.0/ sq.m.
Business Permits
• License to Operate and Product Registration from the Bureau of Food and Drugs (BFAD);
• Environmental Compliance Certificate from Environmental Management Bureau (EMB);
• Registration of Incorporation from the Securities and Exchange Commission (SEC).
Contacts
Philippine Exporters Confederation, Inc. (PHILEXPORT)
Mr. Sergio R. Ortiz-Luis Jr. - President & CEO
ITC Complex, Roxas Blvd. cor. Sen. Gil J. Puyat Avenue, Pasay City 1300
Tel. No. (+632) 833-2531 to 34
Fax No. (+632) 831-3707/ 0231
Website: http://www.philexport.ph

Philippine Food Processors and Exporters Organization, Inc. (PHILFOODEX)

Mr. Roberto C. Amores – President
Unit 1205 Jollibee Plaza, Emerald Ave., Ortigas Business Center, Pasig City 1605
Tel. No. (+632) 634-3304 / 634-3466
Fax No. (+632) 637-7434
Website: http://www.philfoodex.org

Food and Drug Administration (FDA)

Dr. Suzette Lazo - Director
Civic Drive, Filinvest Corporate City Alabang, Muntinlupa City 1781
Tel. No. (+632) 809-4390 locals 2183 & 2184
Fax No. (+632) 807-0751
Website: www.bfad.gov.ph

Bureau of Export Trade Promotion

Ms. Rosemarie Castillo – Brand Manager, Processed Food Sector
Tel. No. (+632) 890-4722
Fax No. (+632) 890-4716/ 897-4707
E-mail address: betprmgc@dti.gov.ph

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