Local coal producer MG Mining and Energy Corporation (MGMEC) is counting on the demand of non-power clients to stretch market base.

The company indicated in a press statement to have seen window of opportunity with the decision of some manufacturing firms to “convert their boilers to use coal because of the high cost of bunker fuel.”

“The canneries and food manufacturing industry in Mindanao remains a niche market for us,” said Michael Morales, MGMEC vice president for sales.

The coal mining firm bared it is setting sights on “expanding its market to Cagayan de Oro, Zamboanga and Davao as local demand for coal continues to grow.”

The company is projecting that sales in Mindanao may reach 20,000 metric tons on a monthly basis, following the company’s expansion platform.

Mindanao-based manufacturing firms, the company noted “are now refitting their power plants to burn coal instead of bunker fuel.” The cost rule of thumb in the acquisition of new boilers was placed at P25 million to P30 million; yet investment recovery is seen eased due to cost differentials between coal and fuel oil.

Morales said the manufacturing sector is largely considered a “non-traditional market for coal;” hence, they still thrive as exciting growth prospect to be catered by MG Mining. The traditional coal clients are power firms and cement companies.

MG Mining’s current clientele foothold is in General Santos City wherein it comfortably cornered market share of 95 percent. It existing contracts binds it to sell at least 5,000 tons monthly to clients in the area.

Morales explained that for the rest of the manufacturers in Mindanao, the canneries and food manufacturers are prospective core clients given substantial volume for their energy requirements.