December 11, 2009

Production of meat processing in the Philippines will likely drop by a fifth due to lower demand, an industry official said yesterday.

Francisco J. Buencamino, executive director of the Philippine Association of Meat Processors, Inc. (PAMPI) said output is seen down by 20% and sales growth is expected to be less than 10% in 2009 due to higher prices.

PAMPI is composed of 29 companies representing 85% of the entire meat processing industry, including San Miguel Foods Corporation, CDO-Foodsphere, Inc. and RFM Corporation. Member-companies produce about 600 million kilos of meat products worth over P90 billion (US$1.9 billion) each year. Canned and processed meat products include ham, hotdog, luncheon meat, sausage and bacon.

PAMPI was targeting an 8%-10% increase in sales this year.

Buencamino said imported raw meat materials have also dropped as much as 28%, noting 2008 importation of 277.575 million kilograms of meat.

Buencamino attributed the production drop to lower demand, which in turn was due to "[lower] purchasing power of Filipinos." The executive said people are switching to traditional substitutes like pancit canton and non-meat alternatives.

At the same time, Buencamino, who is also executive director of the Tuna Canners Association of the Philippines, said Philippine canned tuna exports are in trouble due to a new European regulation that kicks in January 1 next year. In the list of the illegal, unreported and unregulated fishing-free countries, Buencamino said the Philippines is not yet there and if the country doesn't get on the list by end of December, exports to Europe will be completely stopped.