April 27, 2009

PhilMaize eyes corn export venture with Korean firm

Philippine Maize Federation, Inc. (PhilMaize) and a Korean firm are planning to put up a 10,000- hectare plantation in Cagayan Valley, north-eastern Luzon, to export yellow corn, with the foreign investors committing to pour in PHP600 million (US$12.29 million).


PhilMaize said the terms of the joint venture are still being finalised.


The Korea Overseas Grain Investment & Development Co. Ltd. and PhilMaize will produce yellow corn - the main ingredient in animal feeds - exclusively for exports.


PhilMaize President Roger V. Navarro said the company is going to lead the venture while the Koreans will take care of the financing.


Navarro told said that PhilMaize aims to sign an agreement with the Korean firm in the first half of this year, to secure a minimum of PHP600 million in investments.


PhilMaize announced plans for a trial shipment of 40-container vans containing 30 to 35 tonnes of yellow corn to Korea last year, but this did not push through due to softening world corn prices.


Weak prices prompted the Korean buyer to offer a price of US$290-US$300 per tonne, lower than the US$330-US$350 per tonne expected by PhilMaize.


Navarro said under the proposed joint venture, partners will lease a contiguous 10,000-hectare area from some 800 land owners, which will be located in the municipality of Mallig in Isabela.


The new corn plantation would be able to produce some 26,000- 27,000 tonnes of yellow corn for each cropping season.


Last year, the Cagayan region accounted for 15.5 percent of the total 1.877 million hectares of corn plantations in the country, followed by Central Luzon's 14 percent share and Western Visayas at 12 percent.


According to data from the Bureau of Agricultural Statistics, full-year corn output fell short by 4 percent to 6.92 million tonnes last year from the adjusted target of 7.2 million tonnes on higher costs of fertilisers and with production affected by tropical storms during the first half of 2008.


US$1 = PHP48.804 (Apr 27)

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