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					                                           Chapter 9

                        Region 3: Processed Meat Industry Cluster

9.1 Overview of the Industry

      9.1.1   Situationer

              9.1.1.1   The processed meat industry in the Philippines

Meat processing is part of the processed food industry in the Philippines. Records of the
National Meat Inspection Service (NMIS) as of the end of January 2010 show the
following list of major meat processors in the country.

Table 9.1 Major Meat Processors in the Philippines, 31 January 2010
                        Enterprise                                         Location
Region 1
Cela’s Meat Products “Mangaldan’s Best”                  Mangaldan, Pangasinan
Mercedes Tita Calica                                     Urdaneta City
PGMA-Multiline Food Processing Plant                     Santa, Ilocos Sur
Sterling Quality Foods International, Inc.               Bauang, La Union
St. Isidore Meat Processing Plant                        Labrador, Pangasinan
Region 2
Babes H.A. Food Products                                 Cauayan City
Region 3
957 Foods Corporation                                    San Fernando City
Alpha Alleanza Manufacturing, Inc.                       Marilao, Bulacan
AMC Food Products                                        Magalang, Pampanga
Arbee’s Food Products                                    San Fernando City
Atu’s Meat Products                                      Apalit, Pampanga
Betis’ Best Meat Products, Inc.                          San Fernando City
Bounty Fresh Food, Inc.                                  Pulilan, Bulacan
Bretto’s International Food Corp.                        Angeles City
Cabanatuan Meat Products                                 Cabanatuan City
Classic Baker Corporation                                Tarlac City
Country Ham & Sausage Factory                            Angeles City
Ghee & Rica Food Products                                Angeles City
Gourmet’s Delights Food Products                         San Fernando City
International Ham & Sausage Manufacturing Co., Inc.      Marilao, Bulacan
Jess-nor Food Products                                   Sta. Maria, Bulacan
Jon Jon and Minda Food Storage                           Marilao, Bulacan
Kim’s Toll Packaging Services (Ariel’s Meat Products)    Angeles City
Len Meat Products                                        Angeles City
Malows Meat Products                                     Guagua, Pampanga
Mama Mia Meat Products                                   Magalang, Pampanga
Maricon Food Storage                                     Sta. Maria, Bulacan
Mekeni Food Corporation                                  Porac, Pampanga
Merle O. Ramos Enterprise                                San Fernando City
Minette’s Meat Products                                  Angeles City
MJB Food Products                                        Marilao, Bulacan
Mother Earth Products, Inc.                              Mabalacat, Pampanga


                                                                                       9-1
                         Enterprise                                Location
Nadeco Mei Food                                   Angeles City
NAN Foods Corp.                                   San Fernando City
National Agribusiness Corporation (Agri-Freeze)   CSEZ, Pampanga
Odessa Foods                                      Mabalacat, Pampanga
Pampanga’s Best, Inc.                             San Fernando City
Roel’s Food Corporation                           Mabalacat, Pampanga
Romac Industries, Inc.                            San Simon, Pampanga
S.G. Farms Food Processing                        San Fernando City
Tita’s Special                                    San Fernando City
Toprind Enterprises, Inc.                         San Fernando City
VWA Food Processing, Inc.                         San Jose del Monte City
Wholesaledge Corporation                          Meycauayan, Bulacan
Region 4-A
Asialink Co., Inc.                                Sto. Tomas, Batangas
Borjino Food Supply Corp.                         Cainta, Rizal
Cabuyao Meat Processing Corp.                     Cabuyao, Laguna
Dutch Windmill Foods, Inc.                        Bacoor, Cavite
Emma’s Meat Shop                                  Lipa City
Fasto Foods, Inc.                                 Antipolo City
Foodshere, Inc.                                   Malvar, Batangas
Genosi, Inc.                                      Cainta, Rizal
Jaro Development Corp.                            Imus, Cavite
Jentec Meat Processing Plant                      Calamba City
Jomark Food Corporation                           Dasmariñas, Cavite
Joshua’s Meat Products                            Nagcarlan, Laguna
L.C. Big Mak Burger, Inc.                         Lucena City
Liip Food Processing Corp.                        Biñan, Laguna
Limcoma Batangas Prime, Inc.                      Sto. Tomas, Batangas
Maco’s Meat Products                              Nagcarlan, Laguna
Maerdi Foods                                      Taytay, Rizal
Maycar Meat Processing Plant                      Lipa City
Mofel’s Food International Corp.                  Dasmariñas, Cavite
Pililia Poultry Processing Plant, Inc.            Pililia, Rizal
Promeat Products                                  Cainta, Rizal
Purefoods-Hormel Co., Inc.                        General Trias, Cavite
San Juan Food Products                            Calamba City
Soro-soro Ibaba Development Cooperative, Inc.     Batangas City
Velfram Foods Corp.                               Pagbilao, Quezon
Virginia Foods & Spice Manufacturing Co., Inc.    Silang, Cavite
Vitalife Agri Ventures, Inc.                      Liliw, Laguna
W.M. Candelario Enterprises                       Calamba City, Laguna
Zara Multi-Products, Inc.                         Rosario, Batangas
Zenith Foods Corporation                          Calamba City
Region 4-B
Viet Ville Restaurant                             Puerto Princesa City
Region 5
Bigg’s, Inc.                                      Naga City
Dellomas Meat Product                             Gubat, Sorsogon
Graceland Food Industries, Inc.                   Naga City
Region 6
AR Poultry & Frozen Foods                         Iloilo City
Cares Meat Foods                                  Arevalo, Iloilo


                                                                              9-2
                       Enterprise                                    Location
E&S Food Products                                  Iloilo City
Foodmaster Meat Products                           Iloilo City
Injap Foods                                        Iloilo City
Jester’s Foods                                     Iloilo City
New Jocyl’s Food Products                          Kalibo, Aklan
Kelowna Foods Corp.                                Oton, Iloilo
Panay Andok’s Corp.                                Iloilo City
Rosa Foods, Inc.                                   Kalibo, Aklan
Victorias Food Corp.                               Victorias City
Region 7
Combrands, Inc. (formerly Alenter Food, Inc.)      Mandaue City
Alfa-All Food Asia, Inc.                           Mandaue City
Belcris Foods                                      Mandaue City
DCTV Network Phils., Inc.                          Mandaue City
King’s Quality Foods, Inc.                         Mandaue City
Lami Food Products Corp.                           Mandaue City
Sunpride Foods, Inc.                               Mandaue City
Virginia Food, Inc.                                Compostela, Cebu
Zenith Foods Corp. (formerly Vismin Foods Corp.)   Mandaue City
Zeus Foods Corporation                             Mandaue City
Region 10
Botoy’s Lechon Manok, BBQ & Liempo                 Cagayan de Oro City
Darling Food Products                              Cagayan de Oro City
SARC Foods Corporation                             Tagaloan, Misamis Oriental
SLERS Industries, Inc.                             Cagayan de Oro City
Region 11
Amco Foods Corp.                                   Davao City
Calixtra’s Food Products                           Davao City
Davao Food Products Manufacturing Co.              Davao City
Davao Fresh Foods Corp.                            Davao City
Gensan Aqua Traders                                Davao City
Nenita Quality Foods Corp.                         Davao City
Swiss Gourmet, Inc.                                Davao City
CAR
Grow Foods Meat Products                           Baguio City
Josier Frozen Foods                                Baguio City
Lea’s Frozen Foods                                 Baguio City
Leony’s Frozen Foods                               Baguio City
CARAGA
Green Pine Agricultural Development Corp.          Butuan City
Vross Meat Shoppe                                  Butuan City
National Capital Region
7J & A Meat Processing Plant                       Quezon City
Agathon Trading                                    Parañaque City
A. Tung Chingco Manufacturing Corp.                Valenzuela City
Asia Food Canning Manufacturing                    Marikina City
Andoks Litson Corporation                          Quezon City
AR-Kids Processed Meat Products                    Quezon City
B3 Food Corp. Brother’s Burger                     Makati City
Century Park Hotel                                 Manila
Co.8 Corporation                                   Makati City
Donau Deli, Inc.                                   Makati City


                                                                                9-3
                         Enterprise                              Location
Eldon Industrial Corp.                          Caloocan City
Euro-Swiss Foods, Inc.                          Makati City
Felison’s Food Products                         Quezon City
Fil-Austrain Manufacturing Corp.                Quezon City
Foodsphere, Inc.                                Valenzuela City
Fresh n Famous Food, Inc. Chowking Commissary   Muntinlupa City
Galaxy Burger House                             Quezon City
Goldilock’s Bakeshop, Inc.                      Mandaluyong City
Great Food Solution                             Navotas, Metro Manila
Hocklieng Lucky Food Products                   Valenzuela City
Jaka Food Processing Corp.                      Taguig City
Joe Kuan Food Corp.                             Quezon City
King James Processed Meat Products              Pasig City
King Sue Ham & Sausage Co., Inc.                Caloocan City
Lapid Foods                                     Quiapo, Manila
Leslie Food Corp.                               Parañaque City
Lor’s Food Treats                               Caloocan City
M&H Food Corp.                                  Parañaque City
Macroasia Catering Services                     Pasay City
Makati Shangri-la Hotel & Resort, Inc.          Makati City
Maunlad Canning Corp.                           Navotas, Metro Manila
Maxima Meat Fair Co., Inc.                      Valenzuela City
Metropolitan Foods, Inc.                        Pasig City
Meatworld International, Inc.                   Tondo, Manila
MKKS Food Industry                              Pasig City
MLM Foods, Inc.                                 Muntinlupa City
Natasha Food Corp.                              Quezon City
Nena’s Meat Products                            Quezon City
Nobia, Inc.                                     Taguig City
Prime Pacific Corp.                             Mandaluyong City
Reno Foods, Inc.                                Malabon City
R. Lapid’s Chicharon & Barbeque                 Valenzuela City
Royal Processing & Canning Corp.                Malabon City
Rudy and Linda’s Food Products                  Marikina City
Seven Dragons Food Galore, Inc.                 Quezon City
Sochie’s Best Foods                             Quezon City
Spenser Foods Corporation                       Pasig City
Square Top, Inc./Max’s Commissary               Sucat, Parañaque
Staples Food Corp. 1                            Navotas City
Staples Food Corp. 2                            Navotas City
Swiss Deli Foods                                Pasig City
Tapa King, Inc.                                 Mandaluyong City
Tapa King, Inc. Satellite Kitchen               Pasig City
The Peninsula Manila                            Makati City
The Purefoods-Hormel Co., Inc.                  Marikina City
Tokyo Tokyo, Inc.                               Mandaluyong City
Wellington Foods House of Deli                  Pasig City
Zoi’s Meat Shop                                 Las Piñas City
Source: DA-NMIS




                                                                            9-4
The Philippines Association of Meat Processors Inc. (PAMPI) was impressed by the
performance of domestic meat processors as the processed meat sector appears to be
performing well despite the global downturn. [2] Determined to compete with imports
from neighboring countries, local meat processors have intensified efforts to add value to
their products.
According to Business Monitor Online, on the whole the Philippine economy has been
less affected by the global crisis than expected, having escaped a full-blown recession.
[2] Domestic meat consumption marginally declined, with demand for more expensive
red meat the main casualty. However, supply has continued to grow, owing mainly to the
growth of domestic processing, which has become a particularly profitable retail venture.
The acquisition of modern machinery and use of improved production techniques has
enabled retailers to market a broad value range of manufactured meat products to meet
the needs of various consumer segments. At the lower price end, products such as corned
beef and hot dogs are increasingly popular and affordable, implying a relatively stable
demand for livestock regardless of the macroeconomic climate.
        Table 9.2 Sales of Frozen Processed Red Meat, Philippines, 2004-2007
                  (In US$ ‘000,000, retail value)
                                                                     Year
                       Meat Product
                                                        2004     2005       2006      2007
         Bacon                                           32.7     35.5       40.8     43.2
         Hamburgers                                      14.7     13.7       14.3     18.2
         Hot dogs                                        94.9   107.4      121.3     136.4
         Pork sausages                                   11.5     15.5       18.4     20.5
         Salami                                      -        -                  2      3.4
         Others                                           9.8       10        7.1       5.7
         Total                                         163.7    182.1      203.9     227.4
       Source: Packaged Food: Euromonitor from trade sources/national statistics

The Department of Agriculture (DA) has identified several measures it believes would
further propel the industry forward, and support the industry’s aim of enhancing its
capacity to produce quality products at improved levels of efficiency. [2]
Unfortunately, processing capabilities are less of a problem compared to domestic
livestock farming, which may ultimately prove to be the biggest constraint to the progress
of the processed meat sector. The high price of feeds is hitting farmers hard. Livestock
raisers are especially worried that local production may be unable to compete with
imports from other South East Asian countries, including Thailand and Malaysia. Low
tariffs on imports from these countries only serve to worsen the threat.
The majority of livestock in the Philippines is still raised in small-scale backyard farms,
which in 2008 accounted for around 70 percent of the total pig population and 50 percent
of the total chicken population, according to the DA. [2] However, broilers - accounting
for around a third of the total number of chickens - and the 30 percent of the swine herd
raised on commercial farms accounted for a far higher proportion of meat production
than these figures would suggest at first glance. For the Philippine livestock value chain
to reach its full potential, the number and size of commercial farms will need to increase.


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Meat processing is just a small portion of the processed food industry in the Philippines,
and is concentrated mainly in two regions: Region 3 and Region 10. Available data from
the two regions’ major industry associations identify the following major meat processors
in the Philippines

          Table 9.2 Sales of Frozen Processed Red Meat, Philippines, 2004-2007
                    (In US$ ‘000,000, retail value)
                                                                       Year
                         Meat Product
                                                          2004     2005       2006                   2007
           Bacon                                           32.7     35.5       40.8                  43.2
           Hamburgers                                      14.7     13.7       14.3                  18.2
           Hot dogs                                        94.9   107.4      121.3                  136.4
           Pork sausages                                   11.5     15.5       18.4                  20.5
           Salami                                      -        -                 2                    3.4
           Others                                           9.8       10        7.1                    5.7
           Total                                         163.7    182.1      203.9                  227.4
         Source: Packaged Food: Euromonitor from trade sources/national statistics

The Department of Agriculture (DA) has identified several measures it believes would
further propel the industry forward, and support the industry’s aim of enhancing its
capacity to produce quality products at improved levels of efficiency. [2]
Unfortunately, processing capabilities are less of a problem compared to domestic
livestock farming, which may ultimately prove to be the biggest constraint to the progress
of the processed meat sector. The high price of feeds is hitting farmers hard. Livestock
raisers are especially worried that local production may be unable to compete with
imports from other South East Asian countries, including Thailand and Malaysia. Low
tariffs on imports from these countries only serve to worsen the threat.
The majority of livestock in the Philippines is still raised in small-scale backyard farms,
which in 2008 accounted for around 70 percent of the total pig population and 50 percent
of the total chicken population, according to the DA. [2] However, broilers - accounting
for around a third of the total number of chickens - and the 30 percent of the swine herd
raised on commercial farms accounted for a far higher proportion of meat production
than these figures would suggest at first glance. For the Philippine livestock value chain
to reach its full potential, the number and size of commercial farms will need to increase.

                 9.1.1.2     The processed meat industry in Region 3

Of the 39 NMIS-accredited meat processors in Region 3 as of January 2010, a total of 27
(69 percent) are located in the province of Pampanga. Three of these have advanced
facilities and have been given the “AAA” classification1, making them eligible for export
operation, although only one of them (Pampanga’s Best) has recently ventured into


1
  “A” accredited meat processing plants are authorized by the National Meat Inspection Service (NMIS) to sell
processed meat only at the city, municipal or provincial level. “AA” accredited meat processing plants are allowed to
market their processed pork both at the local and national levels, while “AAA” accredited meat processing plants are
allowed to sell their processed pork in both the domestic and international market.

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exports. The triple-A classification also requires GMP, GOP, and HACCP certification,
which all three processors have (Table 9.3).

Table 9.3 NMIS-Accredited, GMP/GOP-Certified Meat Processing Plants in Pampanga
        Meat Processor                     Location       Classification     Certification
957 Foods Corporation           San Fernando City               AA            GMP/GOP
AMC Food Products               Magalang, Pampanga              AA            GMP/GOP
Arbee’s Food Products           San Fernando City               AA            GMP/GOP
Atu’s Meat Products             Apalit, Pampanga                AA
Betis’ Best Meat Products, Inc. San Fernando City               AA
Bretto’s International Food     Angeles City                    AA            GMP/GOP
Corp.
Country Ham & Sausage           Angeles City                    AA
Factory
Ghee & Rica Food Products       Angeles City                    AA
Gourmet’s Delights Food         San Fernando City               AA
Products
Kim’s Toll Packaging Services Angeles City                      AA            GMP/GOP
(Ariel’s Meat Products)
Len Meat Products               Angeles City                    AA            GMP/GOP
Malows Meat Products            Guagua, Pampanga                AA            GMP/GOP
Mama Mia Meat Products          Magalang, Pampanga              AA
Mekeni Food Corporation         Porac, Pampanga                AAA        GMP/SOP/HACCP
Merle O. Ramos Enterprise       San Fernando City               AA            GMP/GOP
Minette’s Meat Products         Angeles City                    AA            GMP/GOP
Mother Earth Products, Inc.     Mabalacat, Pampanga             AA            GMP/GOP
Nadeco Mei Food                 Angeles City                    AA            GMP/GOP
NAN Foods Corp.                 San Fernando City               AA            GMP/GOP
National Agribusiness           CSEZ, Pampanga                 AAA        GMP/GOP/HACCP
Corporation (Agri-Freeze)
Odessa Foods                    Mabalacat, Pampanga             AA            GMP/GOP
Pampanga’s Best, Inc.           San Fernando City              AAA        GMP/GOP/HACCP
Roel’s Food Corporation         Mabalacat, Pampanga             AA            GMP/GOP
Romac Industries, Inc.          San Simon, Pampanga             AA            GMP/GOP
S.G. Farms Food Processing      San Fernando City               AA            GMP/GOP
Tita’s Special                  San Fernando City               AA            GMP/GOP
Toprind Enterprises, Inc.       San Fernando City               AA            GMP/GOP
Source: DA-NMIS

Significance of the processed meat industry

Region 3, specifically Pampanga, is home to the largest local meat processors, whose
facilities are comparable with processed meat giants, such as Purefoods. These
companies are GMP, GOP, and HACCP compliant.

The processed meat industry in Region 3 is considered highly significant. Industry
stakeholders acknowledge the importance of this sector in providing cash flow and
employment to numerous residents within and around the region.

In order to remain profitable and sustainable, however, the following major concerns of
the industry must be addressed:

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   The need for consistent and reliable supply of raw materials (pork meat)
   The need to ensure that the quality of the meat conforms to industry standards
   The need to establish a first class slaughterhouse with fabrication and cold storage
    facilities
   The threat from the underground economy/wet market retailers who somehow
    destabilizes prices and the competitiveness of the whole industry.

      9.1.2   Value chain and sub-sectors

              9.1.2.1   General value chain of the processed meat industry in the
                        Philippines

Figure 9.1 shows the general value chain of the processed meat industry. It includes
several players: (1) feed suppliers, (2) animal farmer/raisers, (3) truckers, (4)
slaughterhouses, (5) meat fabricator/cutters, (6) meat shops, (7) meat processors, (8)
packers, (9) cold storage, and (10) distributors/wholesalers.

Figure 9.1 Processed Meat Industry Value Chain, General




                                                                                           9-8
              9.1.2.2   Value chain of the processed meat industry in Region 3

Figure 9.2 shows Region 3’s processed meat industry value chain, which is composed
essentially of the same stakeholders as can be seen in Figure 9.1, the key ones being: (1)
hog farmers/raisers; (2) slaughterhouses; (3) meat processors; and (4) support agencies.

It differs from the general value chain depicted in Figure 9.1, in two respects: (1) the
absence of slaughterhouses with meat fabrication/cutting facilities; and (2) the
inadequacy of cold storage facilities at and after the meat fabrication stage. Because
there are no meat fabricators accessible to meat processors, they have chosen to import
meat (packed as choice cuts) instead of buying from local sources whole carcasses or
poorly cut meat sections.

Figure 9.2 Processed Meat Industry Value Chain, Region 3




              9.1.2.3   Support industries

Slaughterhouses

There are only four NMIS-accredited slaughterhouses in the province of Pampanga and
only one, Mother Earth (in Mabalacat), is GMP/GOP-certified.


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Table 9.4 NMIS-Accredited Slaughterhouses in Region 3, 31 January 2010
          Slaughterhouse                           Location                      Certification*
Balagtas Municipal Abattoir           Balagtas, Bulacan                    GMP/GOP
Balanga City Abattoir                 Balanga City, Bataan
Clarefelle Abattoir                   Obando, Bulacan                      GMP/GOP
Dealco Farms, Inc.                    Angeles City, Pampanga
Dealco Farms, Inc. 2                  Angeles City, Pampanga
Marilao Private Abattoir              Marilao, Bulacan                     GMP/GOP
Meyacauayan Market & Abattoir         Maycauayan City, Bulacan             GMP/GOP
Moncada Municipal Abattoir            Moncada, Tarlac                      GMP/GOP
Mother Earth                          Mabalacat, Pampanga                  GMP/GOP
Phil. Abattoir Development Center     San Fernando City, Pampanga
Rombe Philippines, Inc.               Pulilan, Bulacan                     GMP/GOP
San Jose del Monte Abattoir           San Jose del Monte, Bulacan          GMP/GOP
San Rafael Municipal Abattoir         San Rafael, Bulacan
*All of these slaughterhouses have been classified as “AA” establishments.
Source: DA-NMIS

Meat Cutting facilities

There are only two NMIS-accredited meat cutting plants in Region 3, one of which is
located in Porac Pampanga. Both are classified as “AA” establishments, but neither one
is GMP/GOP-certified.

Table 9.5 NMIS-Accredited Meat Cutting Plants in Region 3, 2009
            Cold Storage Facility                         Location                    Classification
GF Cutting Plant                             Guiguinto, Bulacan                            AA
PKC Meat Cutting Plant                       Porac, Pampanga                               AA
Source: DA-NMIS

Cold storage facilities

There are six cold storage facilities in Region 3, all of which except one are located in
Pampanga.

Table 9.6 NMIS-Accredited Cold Storage Establishments in Region 3, 2009
              Cold Storage Facility                        Location                   Classification
JENTEC Storage Inc.                           Luisita Industrial Park, Tarlac City         AA
557 Corp.                                     San Fernando City, Pampanga                  AA
KAYABE Ice Plant                              Mexico, Pampanga                             AA
Sta. Lucia Ice Plant                          Guagua, Pampanga                             AA
RDF Meat Shop Central Depot Cold Storage      Porac, Pampanga                              AA
Alma Refrigeration & Cold Storage             San Fernando City, Pampanga
Source: DA-NMIS

              9.1.2.4     Support agencies

Department of Agriculture-National Meat Inspection Service (NMIS-3)

The NMIS provides laboratory services for water, contaminants, bacterial pathogens,
antibiotic residues, banned veterinary drugs, which are analyzed at the Central Meat

                                                                                                  9-10
Laboratory. Seminars and training programs are also provided by NMIS-3 for
slaughterhouses and other meat plants. Training programs for meat processors are
sometimes conducted in cooperation with PAMPro.

Department of Science and Technology-Region 3

DOST-3 provides zero per cent financial assistance for equipment upgrading under the
SETUP program. The maximum loan amount is P1 million, payable in three years.
Unfortunately, there are no records of availment of this facility by members of PAMPro.

Under the Manufacturing Extension Program (MPEX), DOST-3 also provides training,
consultancy, and technical intervention as follows:

   Training/lecture-demo on meat processing
   Seminars on Good Manufacturing Practices (GMP)
   Seminars on packaging and labeling
   Training on product development
   Seminars on 5S
   Training on Hazard Analysis and Critical Control Points (HACCP)
   Training on preventive maintenance and housekeeping
   Training on basic food hygiene
   Technical consultancy on label design assistance
   Technical assistance in identifying appropriate packaging materials
   Laboratory tests and BFAD requirements
   Implementation of 5S and GMP

Table 9.7 DOST-3 Training/Seminars Conducted on Meat Processing, 2009
                                           No. of
Name of Training        Venue           Participants     Date Conducted   Funding Scheme
Training on meat  SM Clark, Angeles 14 participants     24 April 2009     OWWA
processing        City
Training on meat  San Fernando City, 23 participants (1 5 June 2009       Company-
processing        Pampanga           SME)                                 sponsored
Lecture-demo on   Balanga, Bulacan   21 participants    29 July 2009      Soroptomist
meat processing                      (members of                          International
                                     KABALIKAT)                           Bataan
Seminar on basic  Cabanatuan City,   20 participants    12 September      Bayer CropScience
meat processing   Nueva Ecija
and food safety
Source: DOST-3

     9.1.3   Demand/users and markets

             9.1.3.1   Major users

Small industry players generally sell their products in the wet markets of Pampanga and
nearby provinces. The bigger players utilize distributors and dealers, and normally sell



                                                                                      9-11
their products through their own outlets or in supermarkets. According to an officer of
Mekeni, one of the large meat processors in Pampanga, approximately 25 tons of meat
products are sold everyday.

                 9.1.3.2   Domestic market

The typical breakdown of sales for a medium-sized meat processor is: distributors, 30-50
percent; dealers/hotels/caterers, 20-35 percent; outlets, 10 percent; and supermarkets, 15-
30 percent.

                 9.1.3.3   Export market

In 2004, PAMPro launched the Export Market Development Project. Unfortunately, the
project never took off. At present, none of the meat processors in Region 3 are into
exports, except for Pampanga’s Best. Their main foreign market is Dubai. Their main
competitors are India, China, Korea, and the USA. At present exports account for about
five percent of total sales.

         9.1.4   Raw materials supply

In spite of the fact that Region 3 is among the largest producers of livestock and poultry
in the country, most of the raw materials required by the meat processors of Pampanga
are imported.

Table 9.8 Sources of raw materials
                 Raw Material                                           Source
Beef                                            Brazil, Australia, India, Australia
Pork                                            Within the province, within the region, Luzon,
                                                Visayas, Mindanao, USA, Canada, France
Buffalo meat                                    India
Chicken                                         Within the province, within the region, Luzon,
                                                USA, Canada
Sugar                                           Within the province, within the region, Luzon
Salt                                            China
Spices                                          Various countries

Purchasing of raw materials is generally done individually. This is true for both small
and large players, since raw material standards and requirements vary by company. The
common mode is direct importation through traders.

                 9.1.4.1   Raw material sourcing project

Local sourcing of manufacturing grade pork meat has been identified as one of the major
concerns of the Pampanga meat processors. A strategy that was identified sometime in
2002 to address this problem was the establishment of a direct link between the meat
processors and the hog raisers so that domestic meat prices might be kept at competitive



                                                                                                 9-12
levels relative to imported meat. In order to make this possible, PAMPro thought that it
was necessary to have modern facilities, such as a slaughterhouse and cold storage to
ensure that the meat cuts conform to the quality specifications of the meat processors.

DTI-Pampanga at that time took the lead in facilitating the link up between PAMPro and
Nenita Quality Foods Corporation (NQFC), an establishment in Davao City, which was
both an abattoir and a packaging plant, and which had the capability to act as the
consolidator for the Davao hog raisers.

PAMPro and NQFC committed to support the project and a Memorandum of Agreement
was signed by both parties. As stipulated in the MOA, NQFC was supposed to deliver to
PAMPro one 20-foot container per week with a minimum of 15 tons of pork cuts per load.

The main objectives of the project were:

       To neutralize the price of pork meat in the market
       To less pork importation
       To support the domestic hog industry

According to the implementing guidelines for the project, any bonafide member of
PAMPro could participate, subject to compliance to a number of requirements, such as
(1) he should officially communicate his intention to participate in writing, specifying his
desired purchase volume for each meat cut; and (2) his participation in the project should
be continuous, that is, until the end of each designated locked in period.

The project continued for three years, but eventually collapsed when NQFC stopped
operations in Davao.

It was originally envisioned that the project would have a second phase that would extend
the tie-up to Luzon hog raisers. This was considered a good plan because it could cut
down the cost of transportation substantially. Negotiations were initiated. Unfortunately,
the plan never materialized, as hog raisers in Luzon, specifically in Region 3, prefer to
sell their animals live to ready markets in Central Luzon, Metro Manila, and up north.

Another attempt was made to put up a slaughterhouse for funding by the DBP, but the
plan did not also prosper.

       9.1.5   Productivity

In general, the productivity of the processed meat industry of Region 3 and Pampanga are
comparable to identical industries in the country. Stakeholders of the sector believe that
they are competitive in terms of technology and product quality. Members of the
association are updated in terms of GMP and HACCP, although not all of them are GMP
or HACCP certified.




                                                                                       9-13
For large players, such as Pampanga’s Best and Mekeni, the productivity level is
considered higher than identical industries in the country, and may even be at par with
international brands. These companies have facilities and operations as good as those of
international companies.

     9.1.6   Price Competitiveness

Most of the meat processors in the region sell their products at relatively similar prices,
since they tend to have the same suppliers of raw materials. However, larger players are
likely to price their products somewhat lower since their production costs are lower and
they have the advantage of economies of scale. On the whole prices of products from the
Region 3, specifically Pampanga, are priced approximately 10-20 percent lower than
those outside the region.

9.2 Potentials and Issues in View of Cluster Development

     9.2.1   General issues

             9.2.1.1   Competitive advantage

The processed meat industry of Region 3 draws its competitive advantage from (1) its
proximity to Metro Manila, a major market; (2) it compliance with food safety standards
(HACCP); and (3) better prices of their products.

     9.2.2   Technology

There is a huge discrepancy in terms of level of mechanization among members of the
processed meat industry of Region 3. For very small players, processes would normally
be 100 percent manual. For big players, the level of mechanization ranges from 50-95
percent. Mekeni is 95 percent mechanized.

According to some industry members, large firms in the sector would usually assist the
smaller players. They call it complementation/supplementation, and it comes in the form
of technology and knowledge transfer.

     9.2.3   Marketing and distribution

Marketing and distribution are done individually. Marketing and distribution activities
adopted are similar to that adopted by other clusters.

     9.2.4   Financing facilities

Although there are various programs available for SMEs, such as the DBP Sulong
Financing Program, ISSEP 2, KKV-IPCCP, and IGL/CLF, meat processors favor private
banks and their accumulated earnings as sources of funds for working capital, letters of



                                                                                      9-14
credit, and revolving credit. For fixed asset acquisition, some companies go to DBP and
other financial institutions.

     9.2.5   Skilled labor development

The manpower requirements of the industry can be readily sourced from within the
region. High school graduates are acceptable for jobs that require only semi-skilled labor,
such as packaging, production, and utilities. For the more technical jobs, such as quality
assurance, logistics, and administration, degree holders are preferred. Machine operators
and butchers undergo special training.

GMP and HACCP training are provided by the DA-NMIS, DOST and the DTI. Training
on packaging and labeling are offered by the DTI and DOST. TESDA also provides
training on specific skills, such as slaughtering and meat cutting.

Some of the problems which have been identified in connection with labor are as follows.

   Insufficient manpower to meet desired output
   Lack of quality consciousness
   Lack of skilled personnel
   Food safety consciousness is needed
   High cost of labor

     9.2.6   Infrastructure

There are no significant problems with infrastructure, although there was mention of
impending problems with electricity. The inadequacy of NMIS-accredited slaughterhouse
facilities has also been cited, along with issues on warehousing/cold storage facilities and
incubation facility

9.3 Cluster Structure

     9.3.1   Existing industry cluster initiative

No formal cluster exists in the processed meat industry of Region 3 in general, or
Pampanga in particular. There is some degree of cooperation among the members of the
industry, facilitated by DTI-Pampanga and the Pampanga Association of Meat Processors,
Inc. (PAMPro), but not really formalized or institutionalized.

According to those who participated in the baseline survey, clustering could be beneficial
to the industry members, particularly in terms of ensuring the steady supply of raw
materials and stabilizing prices. Clustering may also be able to prepare the members of
the industry for the export market, and may facilitate transfer of technology.




                                                                                       9-15
     9.3.2     Relevant industry/trade associations

               9.3.2.1   Pampanga Association of Meat Processors

The Pampanga Association of Meat Processors (PAMPro) was officially registered with
the Securities and Exchange Commission (SEC) in October 2001. It has a total of 19
members.
Table 9.9 PAMPro Members
                       Member Firm                                    Location
  1    Arbee’s Meat Products                      Sto. Cristo, Angeles City
  2    Ariel’s Meat Products                      Bagong Bayan, Angeles City
  3    Atu’s Meat Products                        San Vicente, Apalit, Pampanga
  4    Bulacan’s Pride                            Nepo Mart, Angeles City
  5    Canaan Ham & Sausage                       St. Jude Village, City of San Fernando
  6    Flavor Fest                                Lakandula, Mabalacat, Pampanga
  7    Ghee & Rica Food Products                  Bagong Bayan, Angeles City
  8    Gourmet’s Taste                            San Isidro, City of San Fernando
  9    JPS Meat Products                          Dolores, City of San Fernando
 10    Mekeni Food Corporation                    Balubad, Porac, Pampanga
 11    Minette’s Meat Products                    Belen Homesite Subdivision, Angeles City
 12    Mother Earth Products Inc.                 Duquit, Mabalacat, Pampanga
 13    Nadeco Mei Foods Corp.                     Pulong Bulo, Angeles City
 14    Nan Foods Corporation                      Dolores, City of San Fernando
 15    Pampanga’s Best                            Magalang, Pampanga
 16    PG Lasang Pinoy                            Balibago, Angeles City
 17    Roel’s Food Corp.                          Duquit, Mabalacat, Pampanga
 18    Tita’s Special                             Dolores, City of San Fernando
 19    Yapin Ini Food Corp.                       Guagua, Pampanga

PAMPro has undertaken a number of projects in the past, among which are the following:

   Work force education

    This includes sponsorship of training courses, seminars, and briefings on HACCP,
    GMP, how to participate in trade fairs, financial management, hygiene monitoring
    systems, frozen meat thawing systems, alcohol immersion freezing, NMIC
    requirements for accreditation, Halal, visual merchandising, pricing and costing.
    These projects are usually conducted in collaboration with the Department of
    Agriculture-Regional Food Unit (DA-RFU), DA-NMIS, DOST, BFAD, TESDA, and
    DTI.

   Research

    This includes projects such as development of prototypes (labeling) for interested
    meat processors, production mechanization (factory improvement, purchase of
    machines, construction of new buildings), undertaken in cooperation with DOST,
    DA-ACEF, and PhilFoodex.


                                                                                             9-16
   Marketing

    This includes participation in trade fairs, market research, and information
    dissemination (e.g. development of materials, such as the Guide to Import Food into
    Hong Kong and Canadian Market for Selected Processed Food).

   Information dissemination

    PAMPro disseminated information on the funding program of the Technology
    Application and Promotion Institute (TAPI) of DOST; spearheaded the
    operationalization of Mother Earth Products, Inc. “AAA” Slaughterhouse in July
    2002; and disseminated information on the following financing facilities: DBP
    Sulong Financing Program, ISSEP 2, KKV-IPCCP, and IGL/CLF.

    PAMPro also conducted briefings on NMIC programs, BOI plans for the food sector,
    BFAD regulations, DA raw materials importation, the BMBE law, and ECC
    accreditation.

   Support for environmental protection

    PAMPro also led the adoption of the Waste Minimization Technology through the
    establishment of the Bio Gas project by MEPI. It also facilitated consultancy
    meetings with ECC officers.

9.4 Development Policies and Activities

     9.4.1   Development policy direction and targets of the DTI regional office

The development of the processed meat industry is a priority of DTI-Pampanga. The
agency has been working closely with PAMPro and its members. Unfortunately, not
many of the industry players have heard of the cluster approach. And DTI-Pampanga has
not formulated specific programs to pursue clustering as a strategy to promote and
develop the sector.

     9.4.2   Expectations for cluster development, existing support programs, and
             aggressiveness towards the cluster approach

             9.4.2.1   Lead government agencies

The stakeholders of the processed meat industry of Region 3 are not aware of any effort
on the part of the LGAs in pursuing the cluster approach to regional development.
However, agencies such as the DOST and NMIS seem to be open to it, realizing that
many of the problems currently faced by the sector could be addressed through clustering,
such as linking hog raisers and processors.




                                                                                     9-17
             9.4.2.2   Local government units

Local government units likewise are not aware of the clustering approach, but they
strongly support the sector.

             9.4.2.3   Regional Development Council

There are no indications of any RDC program in line with the cluster approach for the
processed meat industry of Central Luzon.

             9.4.2.4   Industry associations

PAMPro has not acquainted with the cluster approach. Thus, it has not been aggressive
in pursuing it. However, after having been oriented on the possible benefits that could
accrue to members of the processed meat sector, those who were involved in the baseline
survey said they would definitely welcome any clustering program for their industry

Interviews

1. Emily C. Lapid, executive assistant, Mekeni Food Corporation, Friday, 12 February
    2010
2. Renato S. Tayag Jr, president & CEO, Mother Earth Products Inc, Friday, 12
    February 2010
3. Alberto N. Deang Jr, president, Nadeco Meifoods Corporation, Friday, 12 February
    2010
4. Agerico L. Nicdao, chief, operation division, Provincial Veterinary Office
    (Pampanga), Friday, 12 February 2010
5. Custer H. Santos, Q.A. manager, Pampanga’s Best Inc, Friday, 12 February 2010
6. Marcial S. Alviz, general manager, Malows Meat Products Company, Friday, 12
    February 2010
7. Dr. Conrado J. Oliveros, regional director, DOST-Region 3, Friday, 12 February
    2010
8. Dr. Julius Caesar V. Sicat, assistant regional director, DOST-Region 3, Friday, 12
    February 2010
9. Benilda B. Villanueva, meat inspector, MSTD, NMIS-Region 3, Friday, 12 February
    2010
10. Dr. Teresita U. Buenaluz, administrative officer, NMIS-Region 3, Friday, 12
    February 2010
11. Myra S. Gomez, DTI-Pampanga, Friday, 12 February 2010

References

1. National Meat Inspection Service, NMIS-Region 3 Monthly Accomplishment
   Reports 2008 & 2009
2. Philippines livestock sector boosted by meat processing success, Business Monitor
   Online, 21 July 2009

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