The Van der Knaap Group of Companies has uncovered plans to expand its business in processing and marketing of coco peat from coconut husks into high value horticultural substrates in the Philippines for export.
“We see the market growing and we will support the growth not from Sri Lanka and India because we have problems in resources (in these countries),” said Dinesh Fernando, Sri Lanka managing director of Euro Substrates (Pvt) Ltd. in an interview during the recent National Coco Coir Summit in Lucena City.

Coco peat, also known as coir dust, coir pith, or coir fibre pith, is made from coconut husks.

Euro Substrates is one of the companies under Van der Knaap Group, the Netherlands-based provider of sustainable and high quality products and services in the field of rooting and growing media for horticulture worldwide. Van der Knaap Group has over 30 years of experience, with turnover of S$50 million and sales to over 50 countries around the globe. Fernando said the company is currently establishing a company with an initial investment of US$1 to 1.5 million in Mati, Mindanao.

Currently, he is arranging for his next visit with Ron van der Knaap, Chief Executive Officer of the Van der Knaap Group of Companies based in the Netherlands, to the Philippines. Two months from now, they plan to explore business opportunities in Laguna and Quezon.

“We can work with the DTI (Department of Trade and Industry). The DTI can support a selected number of producers with the required machines to produce; we give the technology for them to process it and ensure the market.  We kick start from there,” Fernando said.

During the summit, DTI Undersecretary Merly M. Cruz cited DTI plans to support the coco coir industry through its Shared Service Facilities (SSF) program. There are currently 30 identified SSFs in Regions 3, 4A, 5, 6, 7, 8, 9, 10, 11, 12, and 13.

These SSFs are common service facilities for certain production processes that provide small enterprises access to equipment and technology for them to be competitive in the domestic and international markets.

During their recent visit in the country to attend the summit, Fernando and Hans de Vette, director for the Coco Substrate Production of Van der Knaap Group of Companies, made an exploratory visit to Cocos Nucifera Pacific Enterprise (CNPE), a coco net weaving training and livelihood center in Gumaca, Quezon.

The CNPE is already operating a consolidating plant. Together with the DTI, Department of Agrarian Reform (DAR), Office of the provincial agriculturist (OPA), Philippine Coconut Authority (PCA), and local government units (LGUs), the CNPE intends to put together all existing and future cluster sites for coco coir production. These sites include decorticating sites, twining sites and weaving sites.  At present, the large part of CNPE’s production is on coco net production.

These coco nets can be sold in the domestic market, particularly in DPWH projects, mining sites, and exported to China, the United States, and other parts of Asia, Cruz said.

With the Van der Knaap Group’s initial visit in Quezon, new by-products from coco peat were considered for the export market.

Currently, raw coco peat is sold in the local market only as soil conditioner. It is not processed into coco peat products used for horticultural and agricultural applications. In processing it, coco peat is turned into a high-value planting medium by changing its properties.

According to the PCA data, the annual global production of coir is placed at 350,000 metric tons (MT), with India and Sri Lanka contributing about 90 percent of the global demand. The largest single importer is China, importing as much as 200,000 MT of coir fiber every year. The Philippine exports an average of 1,123 MT or a mere 0.5 percent of the total demand. In 2011, the Philippines lagged behind countries like Sri Lanka, India, Thailand and Indonesia in terms of coconut production and volume of coir product exports.

It also noted that the Philippines produces only 6,037 metric tons (MT) of coco coir products for export from the 15.245-billion nuts harvested from its 3.562 million hectares of land. On the other hand, Sri Lanka produces 120,616 MT of coco coir export products out of 0.395 million hectares of land that produces 2.707 billion nuts.

From 2010 to 2012, the contribution per coco coir commodity to the country’s export include: raw or baled fiber (62 percent), coco peat or dust (25 percent), coco twines or cordage (11 percent), and other products (2 percent), Cruz said.

In 2012, the major export markets for coco peat were China, the US, Singapore, Korea and Japan, according to the Bureau of Export Trade Promotion (BETP) data.

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