There would have to be adequate supply of water of acceptable quality, aside from reliable power, if the dream of Catanduanes to have its own abaca pulp mill is to be realized.
This was stressed during the recent Investment Forum on “the Potentials and Prospects of Abaca Pulp Industry in Catanduanes” by resource speaker Engr. Gerson Escaro of Germarine Industries.
Escaro told local abaca industry stakeholders during the May 25 forum at Rakdell Inn that the pulp mill setup requires that there should be two or more sources of acceptable, mill-use quality water that should not be too costly.
While there is available raw material on the island, he said, planners have to determine the volume of abaca fiber which can be tapped for pulp mill use without unduly putting pressure on current demand and supply situation. Using Catanduanes fiber along would be difficult, Escaro stressed, as it would have to be blended with other abaca fibers from Mindanao for optimum quality.
The logistical cost of delivery of the fiber, chemicals and other supplies to the mill site also needs consideration as well as supply and technical tie-ups with prospective pulp buyers, including market support, he added.
A study has to be conducted by the prospective investor to determine if a pulp mill is viable here, Escaro pointed out.
The industry consultant revealed that years ago when an investor wanted to set up such a mill, Catanduanes was not considered for evaluation, with the mill eventually built in Cabadbaran, Leyte where it is now the world’s biggest.
The Philippines is the main abaca pulp supplier with four mills in Albay (1), Leyte (2) and Mindanao (1) having a combined capacity of 3,000 metric tons of pulp per year. It was disclosed that the current capacity is just enough to supply existing demand in the world market, which is expected to increase at 4% per annum. Expansion is deterred by the high prices of abaca pulp, currently four times more expensive than wood pulp.
In Ecuador’s commercial abaca plantations, mechanized stripping results in fiber length of two to four meters, or twice that of Catanduanes fiber which is manually stripped. “Hand stripping must be combined with the mechanical process,” Escaro said.
He also noted that fiber grades on the island have large variations, with low, middle or high sides within S2 class.], while in Leyte mechanized stripping results in two grades only for S2. There should be uniform classification and quality of fiber, he said, otherwise the pulp mill has to reclassify the fiber again into grades that it wants.
Executive Director Atty, Raul Angeles of the Board of Investments (BOI) Investments Assistance Center, remarked that the issues can only be addressed if the concerned agencies and stakeholders would be united.
He likewise cited the need to look into existing power contracts, pointing out that nobody would put up a pulp mill if there is intermittent power supply.
“We have to move fast of we are to move ahead of competition from neighboring countries in Asia,” Angeles said. “If we will not help ourselves, we will be OFWs of other countries.”
The BOI official also discussed the 2016 Investment Priorities Plan of the national government while an aide talked on the impact of changing technological and economic factors on markets for natural industrial fibers such as abaca.
The country’s abaca exports have reached US$115 million in 2015, with RP supplying 90 percent of the world market. Catanduanes accounts for nearly 35% of total abaca fiber production.
Despite the high price of fiber since 2012, now at P67 per kilo, buying price on the island is low. This was attributed to traders controlling the local market.