If micro enterprises need to create an “added value” to survive in cut-throat competition, that value may come from the help they’re now getting through technology.

The Rockwood Sash and Furnishings (RSF) in Zamboanga Sibugay, the Greenhouse Fishing Station and the Nutri-Booster Foods Philippines both in Pagadian City, and an integrated feed mill, vermiculture, and compost distribution center in Zamboanga del Sur are among those getting that aid through the “Small Enterprise Technology Upgrading Program (SETUP).

Impacting on very small businesses that started with very meager capital such as the NBFP’s P10,000, SETUP is making a difference in agricultural or small manufacturing (furniture, handicraft, food, or metals) ventures in the conflict-riddened provinces of Zamboanga Peninsula.

Through the use of a furnace-type lumber kiln dryer (FTLD) developed by the Forest Product Research and Development Institute (FPRDI), the RSF is able to produce quality furniture – doors, sofa, chairs, cabinets, and chapel pews.

RSF’s new FTLD has a capacity of a 3,000 board foot.

“The advantage in furnace-type lumber kiln dryer is the fast drying of lumber. Lowest moisture content can be achieved. The product becomes stable in form so that no deformation and cracks can form during movements,” said Nestor Gargollo, RSF owner.

Gargollo, who put up RSF just about two years ago, also acquired other wood processing equipment through a P1.2 million investment. Of this, a loan of P711,000 was provided by SETUP which is run by the Department of Science and Technology (DoST).

With the FTLD, RSF will enjoy the following benefits in another two-three months:

Increased monthly production volume from 16 units of door per month to 18 units;

Enhanced quality and reduced rejects and back jobs by 80 percent on repairing cracks;

New markets on top of its present in Zamboanga Sibugay’s Siay, Imelda, and Kabasalan towns;

Increased sales by 100 percent to P567,000 after the first year of intervention, and;

Increased employment generation.
Gargollo’s business arose from a reforestation project of the Gargollo brothers that started in 1990. Of a total of 40 hectares that their father Pedro (thus their corporate name “Rock” wood), 16 hectares planted to mahogany at around 1,000 trees per hectare are currently harvestable.

Exposed to what the market needs as he has been with the Department of Trade Industry’s trade and promotion function for 13 years, Gargollo believes there is a market for his products in Dubai and Hong Kong.

In Dubai, there is a need to replace doors that use cement board with those that use more environment-friendly materials like RSF’s mahogany wood.

“In Hong Kong, they don’t have much space, so they need collapsible furniture like one that can be used as bed in the evening and can be collapsed by daytime,” he said. “We can compete with China in our own land. We want to export our products, but we need the raw materials to produce them.”

RSF is attending the Mindanao Island Fair to be able to meet new markets. Gargollo is aggressively advocating for the training of more Filipino craftsmen who can be among the world’s best in furniture making. He dreams of putting up a training center for them.

But one of his most important advocacies is on putting up of nurseries and on the “Refo-Agro Industrial Development.”

This agro-industrial program seeks to reverse massive forest destruction and its destructive effects to society and to replant forests with initially a 1,000-hectare area over 20 years. This reforestation may be in idle government lands or in denuded or idle private lands.

“We need to plant more of our endemic species – lawaan, narik, apitong – for our own environmental protection,” said Gargollo.

In Pagadian City, a once simple tilapia fish pond established by the family head Pede Conrad C. Lu, is now producing value-added dried tilapia that has the crispiness and marketability of Cebu’s famous danggit.

A P2.36 million expansion, of which SETUP provided P635,438 financing aid, has enabled it to acquire a mechanical fish dryer and stainless steel tables, put up a packing process, and construct a building for processing.

SETUP’s aid also involves manpower training and process upgrading to Good Manufacturing Practice (GMP) which ensures for it not only a local market but perhaps an international market in the future.

“We used to just sun-dry our fishes. This time it’s more sanitary. Since our fish pond is right here, you can be assured of freshness. We also use less salt compared to other dried fish,” said Greenhouse Fishing Station and Restaurant’s (GFSR) Hazel Lu.

Mechanical drying solves problems on inconsistent drying quality and is now producing dried tilapia at a uniform moisture content of 20 to 25 percent.

This program is increasing the fish pond’s productivity by 80 percent with 4,000 packs of dried tilapia produced per month. It is cutting rejects and wastages by 75 percent and is generating new employment, now totaling more than 20 people.

Starting the pond since the early 1970s, the Lu’s have also established a hatchery in the four-hectare fish pond and processing area, producing 100,000 fries per month. Really an integrated venture, the fish pond also houses a restaurant that caters to 250 persons at any given time.

The younger Lu said GFSR is now trying to tap institutional markets such as fast food chains and hotels. It is also seeking other technology interventions that would certify product quality.
“We’re asking DoST to help us analyze salt content,” and guide the company in food safety and quality standards, she said.

The company is using a tilapia variety, a brackish water fish once promoted by a project of the Growth with Equity in Mindanao of the US Agency for International Development, known to require less salt, she claims.

Perhaps a pioneer in the Philippines in producing weaning food for babies, the Nutri-Booster Foods Philippines (NBFP) is also adding much value to a Filipino processed food.

NBFP was founded by a former agriculturist, Concordio L. Bolusan, of the Department of Agriculture (DA) who earlier conducted a study on this product.

“My aim is to help malnourished children as malnourishment rate in the region has reached to 24 percent,” he said.
Through a P475,000 expansion, it has availed of a P275,000 aid from SETUP. Through it, NBFP completed the acquisition of a rice flour mill, a milling machine, an electric sealer, and a mechanical dryer and packaging materials.

It is further putting up a newer, value-adding process – the banana-enhanced nutri-booster production.

This is requiring the purchase of a heavy-duty foot sealer, a five-horsepower pulverizer, a mechanical dryer, and two units of grinder.

Nutri-Booster cereals enrich the protein and energy intake of babies at weaning stage of six months and up through enhancement from soybeans, mungbeans, rice, and sesame. Sesame provides the 25 percent protein source; mungbean, 20 percent; and soybean, 40 percent. These plant sources also provide other vitamins and minerals including amino acids, lysine, leucine, isoleucine, tryptophan, methionine, threonine, phenylalanine, and valine.

The community’s benefit from NBFP is even magnified by the company’s sourcing of raw materials in Region 9 and Region 10, around the Nutri-Booster plant site in Purok Malambuon, Balangasan District, Pagadian City.

“I’m campaigning for farmers’ planting of soybean and mungbean. We were producing soybean (in bigger quantity) when we were implementing a Philippine-Australia program, but we weren’t able to sustain production,” said Bolusan.

The planting expansion can become NBFP’s raw material source and can also replace some soybean imports from Canada that the company buys through a Cagayan de Oro trader.

The company is registering with the Bureau of Food and Drugs (BFAD) as it has also been working on a GMP with the SETUP assistance. It is estimated that this weaning food can raise a baby’s weight by one kilo in a month’s use. Its selling cost is cheaper at P170 per 600 grams compared to P250 per 600 grams from other suppliers, according to Bolusan.

The NBFP now employs 20 people. Its product, which transformed its packaging from plastic jars to aluminum foil and quality-printed boxes, is now being marketed in Misamis Occidental and Zamboanga del Norte.

It has boosted production volume by 45 percent to 5,600 kilos per month in 2008 from 3,900 kilos in 2007 as a result of the first SETUP program. This has been a big leap from the 2,000-kilo per month production prior to SETUP.

In Brgy. Tinago, Mahayag town, Zamboanga del Sur, an income generating project (IGP) of the local government has started producing four superior types of feed formulations for ducks and hogs that are well-marketed in the region.

The feed mill is now producing lactating, gestating, and pre-starter feeds for hogs.

For ducks, the feed is for layering particularly for producing delicacies balut and penoy which have tastes liked by the market due to the absence of hard parts called “stones” in balut, a duck egg specialty.

The mill is producing 1,000 kilos for each formulation per week.

An integrated business, the mill produces feeds for its own poultry and hog farms which use 80 percent of total feed mill output. The rest, the 20 percent production, is sold to the commercial market at lower prices compared to commercial feeds.

“The local government has recorded a 30 percent savings from cost of inputs in their production and had an increased net income because of the reduced cost of feeds," according to SETUP officers in DoST-Region 9 led by Director Brenda Nazareth-Manzano.

The integrated mill has availed of a P300,000 aid from SETUP which allowed it to buy one unit of hammer mill, and a mixer for the feed production facility. A vermi-composting and a composting facility have also been put up under the project in order to promote organic farming of vegetables.

Manzano said a biogas facility may also be established in the mill area which can help the plant save on electricity cost and at the same time enhance environment-friendliness in the plant, cut greenhouse gas (methane) emission, and eliminate farm foul odor.

SETUP proponents believe that micro and small enterprises (MSEs) have the capacity to make huge differences in rural areas if only aid in technology, markets, and financing are extended to them.

“We give assistance in technology to businesses that are already existing and to those that have products sought by the market,” said Department of Science and Technology (DoST) Sec. Estrella F. Alabastro.

In the Zamboanga Peninsula, the challenges are in easing poverty and unemployment, raising productivity, putting up infrastructure such as farm-to-market roads, utilizing wasted natural resources, improving investment climate, and opening up access to financing by MSEs.

The products to be tapped are coconuts, mangoes, rubber, seaweeds, aquaculture and fishery products, abaca, bananas, calamansi, and cassava. Export products are canned tuna, plywood, coconut products, marine and wood products, furniture, processed food, pet food, and seaweed products.

Capability building of government people and integration with other assistance (market promotion, putting up financial and accounting systems, infrastructure build-up) may be the key to boosting SETUP’s benefit to the countryside.

“Budget is not the limiting factor. We’ve only released about one-third of the P300 million that we allocated for it. But we need to look into other things like helping enterprises do feasibility studies,” Alabastro.

With a small amount so far spent, just around P100 million, SETUP has helped maximize the value-adding in more enterprises. It has caused growth in the production of Vitamin A-enriched squash pan de sal, Hazard Analysis Critical Control Point-compliant Spanish sardines, bottled “kinilaw” (raw fish) sauce, and Mediterranean and Oriental-designed furniture.

This is all over small businesses in the Zamboanga Peninsula provinces – in Dipolog City, Dapitan City, Roxas in Zamboanga del Norte – which are starting to find their identities amid a highly competitive, globalized environment.