Coco Coir and the Business of Empowerment by

Coco Coir and the Business of Empowerment by Maitet Diokno-Pascual Pilipinas Ecofiber Corporation Presented at the FSSI Forum on Social Enterprises in the Coco Coir Industry, SM Megamall, Pasig, Metro Manila, 28 November 2011

Pilipinas Ecofiber is … Engaged in the extraction of fiber & peat from coconut husks, and the processing of fiber into high quality stitched & woven coir products for sale in the Philippines and abroad. Coconut husks Coco fiber & cocopeat Coir ropes & mats Geonets, plant liners, trays, etc. Final sale Organized to link input providers, small producers & processors, with traders & distributors of various coir products, and to coordinate the activities of the former in order to meet the requirements of final users. Husk collectors (small biz) Rural workers Rural coops Small biz Plant workers Twining agents Weavers & Edgers Associat’ns Plant workers Traders, direct buyers A business system which selects coir products and the appropriate technology with an effective organization of all actors in order to access the market in a financially, environmentally and socially sustainable manner

Our network Husk collectors (small biz, 3 persons) Rural workers (21) Rural coops (3) Small biz (1) Plant workers (10) Twining agents (7) 1 association Estimated About 50 coconut farmers in Quezon Plant Workers (3) Weavers & Edgers Associations (2) 20 -30 130 twining members households in all in Bicol with 24 members, another group with 26 members, all in Bicol

Pilipinas Ecofiber’s basic functions Specific Inputs Purchase coconut husks; Fabricate & maintain equipment Production Extract fiber & dust from husks; Purchase fiber from other producers Transformation Stitch fiber into mats, liners, etc. ; Outsource twining of ropes & weaving of nets; Control quality; Finish, bale & pack; Coordinate these Trade Transport Distribute Sell Final Sale

Pilipinas Ecofiber’s bottom lines Economic and financial viability + Environmental sustainability + Social Equity = The business of empowerment

Some caveats While Pilipinas Ecofiber has been in existence for more than 30 years, it has only been since 2006 when FSSI acquired it that the company adopted a triple bottom line approach to business. Managing the ownership transition itself a challenge Not easy to transform a company that was run largely as a single proprietorship Getting everyone on board who has long been used to the ways of the old man and his managers is a challenge Workers/contractors want/need steady income and work, who cares about triple bottom lines Ways of the past needed to be addressed and changed

Where people matter Knowledge and crafts Handed down from generation to generation Acquired through time spent in the business Through practice of skills and profession Through research and development Shared among industry players here and abroad Learned from buyers Hard work and discipline To maintain quality To deliver required volume of work on time Creation of value With the right mix of machine, craftsmanship & imagination

In brief Without people the company doesn’t matter Without profit the company can’t help others Pilipinas Ecofiber is moving towards making itself a company that helps communities grow through environment friendly processes as an integral part of its profit earning business. We are in the business of empowerment.

Where we come in Provide a structure within which to put all these talents together to produce high quality coir products Market Equipment Working capital Logistical support Provide a business organization to develop implement and monitor a viable business plan Institute a working relationship that is mutually beneficial and empowering On the basis of mutual respect and fairness At the same time, provide mechanisms and incentives to instill business acumen and raise stakeholder claim in the

Our humble contribution Try and provide a steady source of employment and income for workers, small producers, small businesses Needs strong and sustained market base Thereby providing a steady stream of much needed cash to communities and enterprises As long as we pay on time and without unnecessary delay Women in rural areas included Constantly finding ways to raise productivity and improve efficiency, thereby raising the income earning capacity of all in the supply chain While maintaining market competitiveness Add to knowledge and skills base, discipline, as well as business acumen

Viability track record & progress

‘Typical’ Supply Chain Husk Suppliers PEC Deco Plant Fiber Export Market Peat Markets Other Deco Plants PEC Bicol Plant Twining Coops Weavers Associations PEC Stitching Plant Local bedmakers, bioeng'g contractors US/Korea buyers Local/foreign buyers of coco nets Foreign/local buyers of coco ropes

Social Enterprise Chain ENVIRONMENTAL ü Husk waste utilization Husk PEC Fiber Export Supplier Deco Market s Plant Peat Markets Plants Local bedmakers, Indirect livelihood generation: PEC Bicol Plant ü 3 husk suppliers (About 50 coconut farmers) ü 3 -4 other deco plants ü 200 families of twiners, weavers & edgers Environment-friendly Organic fertilizer for horti- & agriculture Other Deco ECONOMIC/SOCIAL $$$ Export PEC bioeng'g Stitching contractors Plant US/Korea buyers Local/foreign buyers of Weaver Twining s Coops Associa -tions coco nets Foreign/local buyers of coco ropes Support to local enterprises $$$ Export Infra / ecosystems dev’t: Cost-effective $$$/ interventions ¥¥¥ Environmentfriendly

How value is shared Geonets Plant Liners Husk suppliers Coop / Fiber supplier Labor Other materials Logistics Overhead Fiber producer Other materials Twining Weaving Logistics Overhead Gross Profit

How value is shared Fiber Export Husk suppliers Labor Other materials

Social Equity 5 -Year Plan

Challenge: Sustaining the Chain Pilipinas Ecofiber depends on many small businesses: husk suppliers, small coir producers, rural workers, twining households, weaving associations Sustaining this chain is a challenge We need a broadened market base and steady inflow of orders to ensure steady work and income Financial resources throughout the chain must be strengthened » Ideally to shift from hand to mouth existence to some level of savings to support the times when orders are weak » Pilipinas Ecofiber, while its own cash position is challenged from time to time, is conscious of the need to remit payments in a timely manner Protecting value at the lowest end of the chain » Not participating in a race to the bottom » Finding ways to improve productivity and efficiency

What if … DPWH / PNoy Government were to make good on its commitment to procure 2 million sq m of coco nets? major MAJOR contribution to rural employment: rope twining and weaving of nets, not to mention fiber production support to SME sector and coconut sector support to social enterprises » primary producers, POs, coops & microfinance Appropriate gov’t support to coir R&D leads to commercial utilization of peat and other coco-fiber products? WOW! Small farmers can think big with just one hectare of land More eco-friendly industrial & commercial horizons (architecture, engineering, apparel, houseware, etc. )

Very clearly Support to SEs like the coco coir subsector is one sustainable poverty reduction intervention that goes much further than the Conditional Cash Transfer (CCT)

Maraming salamat po!