Dec 6, 2008

Chinese firm eyes cassava plant in Mati City

BusinessWorld Online - Quezon City, Philippines
Vol. XXII, No. 95 Friday, December 5, 2008 | MANILA, PHILIPPINES

DAVAO CITY — A unit of a Chinese state corporation is setting up a P1.5-billion cassava processing facility in Mati City, Davao Oriental, local government officials said.

Davao Governor Corazon N. Malanyaon, said Yuca Corp. Philippines, a unit of Guangxi State Farm, has committed to help the province develop its cassava industry. "[The Chinese firm] also intends to put up its own seaport here," said Dashiel P. Indelible, Ms. Malanyaon’s consultant on economics and agriculture.

He said the Chinese company is choosing two areas where it will build the processing plant — Mati City and the municipality of Banaybanay.

BusinessWorld could not confirm the information since Yuca Corp. does not have local representative. Provincial officials said Yuca Corp. has started organizing farmers who will grow cassava in at least 1,000 hectares in the near term.

The target is to develop 8,200 hectares in the next five years, said Mr. Indelible, a former director of the Agriculture Department’s upland development program covering the Davao region and other parts of southern Mindanao.

Last month, Ms. Malanyaon went to China to meet with officials of Guangxi State Farm and other investors to discuss commitments. Davao Oriental is a mineral-rich area, but the governor said her administration would focus more on the agriculture sector, the province’s economic backbone.

Ms. Malanyaon said her administration has started programs that will rehabilitate the coconut industry and expand rice and corn production.

The province is among the largest producers of coconut in the country. The governor also said the local government was looking at cashing in on banana, the Davao region’s biggest export.

Mr. Indelible said the Chinese company is looking at signing contracts to grow cassava or profit-sharing deals with landowners.

For the lease, the company is dangling an P8,000 per hectare annual rent with a promise that landowners will be employed in their farms.

Aside from being a staple and a source of starch, cassava is also identified as a raw material for ethanol. It is also used to make textiles, plywood and veneer. — Carmelito Q. Francisco

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