Required Report - public distribution

**Date:** 3/3/2006

**GAIN Report Number:** RP6008

RP6008

**Philippines**

**Food Processing Ingredients Sector**

**Report**

**2006**

**Approved by:**

![](media/image1.wmf)Dennis Voboril, ATO Director

FAS Manila

**Prepared by:**

Patrick Quianzon

**Report Highlights:**

The Philippine food processing industry has remained resilient and is
estimated to grow at an annual rate of 10 percent. The U.S. remains the
top food and beverage ingredient supplier despite the increased
competition from other countries. Changing trends in the market has
created new opportunities for introducing new and variant products.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Manila \[RP1\]

\[RP\]

**I. Market Summary**

**Philippine Food Processing Industry Overview**

Food manufacturing, including food and beverage processing remains the
Philippines\' most dominant primary industry accounting for 40.1 percent
of total output in manufacturing. The gross added value is more than
\$2.0 billion with an annual increase estimated at 8-10 percent. The
Philippine Bureau of Food and Drugs' Statistical Report of
Establishments for 2004 lists 11,601 total number of food processing
establishments nationwide. Most of the companies are owned by a single
proprietor that are common among micro, cottage and small industries;
and a few large multi-product firms, some of which operate in
partnership or as a subsidiary of foreign or multinational companies.
Unlike many other countries in the region - where multinationals
dominate food sales - local companies like San Miguel, RFM Corporation,
Universal Robina Corporation and a few others dominate the market or
compete equally with foreign players.

The food processing industry is comprised of the following major
sectors: fruits and vegetables, fish and marine products, meat and
poultry products, flour and bakery products, beverages, confectioneries,
dairy products, food condiments and seasonings, food supplements,
bottled water, snack foods and fats & oils. The industry contributes
approximately 20 percent of GDP per annum. Domestic processors continue
to face numerous challenges, including high electricity cost;
improvements and innovations in technology and packaging from
competitors; inefficient or non-existent post-harvest and storage
facilities; and inadequate farm-to-market support. Recently, there has
been considerable improvement, particularly for larger companies that
are able to support expensive capital outlays.

According to the Philippine National Statistics Office, food and
beverage imports totaled \$2.2 billion in 2004. An estimated 60 percent
of these are raw materials or ingredients used in food processing.
Wheat, dairy products, beef, and soybean products topped the list of
imported products for further processing. (see table in Section III).

The US has remained the top exporter in total volume per country in 2004
at 1.4 billion kg followed by Canada (456 million), China (381 million),
Australia (337 million), Malaysia (249 million) and India (214 million).
As a group, combined exports of ASEAN reached 585 million kg. Wheat,
whey, soybean, peas, potato products and meat/fish extracts are the top
exports from the US.

Advantages and Challenges for US exporters:

  -----------------------------------------------------------------------
  **Advantages**                    **Challenges**
  --------------------------------- -------------------------------------
  U.S. ingredients are highly       Strong competition from other
  regarded for quality and product  exporting countries.
  consistency.                      

  Two thirds of the population is   Volatile exchange rate resulting in
  below 30 years of age and are     US ingredients becoming expensive can
  heavily influenced by Western     shift buyers' purchases to source
  habits and culture through media, cheaper alternatives to keep current
  and are observed to be very open  market prices in a very price
  to processed and ready to cook,   sensitive market.
  ready to eat and imported food    
  products                          

  Proliferation of malls and        Available supply from regional
  accompanying expansion in the     facilities licensing American brands
  retail and dine out               and an abundant domestic supply
  establishments especially on      especially on fresh vegetables,
  American franchises that require  poultry and seafood products.
  American ingredients.             

  Market is far from saturated with Deficient distribution and cold chain
  plenty of room for growth in the  systems in place.
  regional areas of the Philippines 
  with a growing middle class       
  market.                           
  -----------------------------------------------------------------------

###### II. Road Map for Market Entry

####### A. Entry Strategy {#a.-entry-strategy .unnumbered}

New to market US exporters should consider the following when planning
to enter the market

-   Filipino businessmen value interpersonal relationships and U.S.
    exporters should work to develop and maintain close contact and if
    possible, make regular visits to their clients to reaffirm their
    commitment and support.

-   While there is an increasing trend to import directly, especially by
    the large multi-products companies, most processors still rely on
    traders or agents. This allows the food processing company to not
    deal directly with any quality problems.

-   Competitive pricing as compared to other imported suppliers. While
    American products are usually highly regarded for their high quality
    and product consistency, consumers are highly price sensitive and
    processors may switch to other suppliers if they think the market
    cannot accept price increases.

-   Willingness to be flexible to changes in the market requirements
    like adjustments in formulations as dictated by the changing
    consumer trends.

-   Can work with one or several importers. Exclusive distributorship
    agreements are difficult to enforce in the Philippines while
    parallel imports are common.

####### B. Market Structure {#b.-market-structure .unnumbered}

This diagram gives an overview of the usual distribution channel for
imported food ingredients, with a similar pattern from domestic
suppliers to the retail and HRI sector.

![](media/image2.wmf)

Large food processing companies typically prefer to buy their imported
food ingredients directly wherein they have control of the price and
quality but also buy through a trader/agent because:

-   the quantity required is minimal

-   unresolved technical or quality problems with supplier in the past.
    Now prefer the trader/agent to deal with these problems.

While most companies have their own distribution network, especially in
supplying their major accounts or the big retailers, a considerable
number use the services of a distribution company to tap into smaller
grocers and micro-retailers.

######## C. Company Profiles {#c.-company-profiles .unnumbered}

The following lists the major manufacturing companies of several
processing sectors. A number of these companies are multi-product, have
subsidiaries or partners in the industry and what is indicated are
figures of only the specific sectors.

A. Production, processing and preserving of meat and meat products:

+-----------------------+---------+--------+--------------------------+
| **Company**           | **      | **E    | **Production/Plant       |
|                       | Sales** | nd-use | Location**               |
|                       |         | Chan   |                          |
|                       | **(\$   | nels** |                          |
|                       | 000)**  |        |                          |
+=======================+=========+========+==========================+
| The Purefoods-Hormel  | 149,964 | Retail | 2 (Philippines) that     |
| Company, Inc.         |         |        | also processes for       |
|                       |         |        | Purefoods Hormel and San |
|                       |         |        | Miguel Campocarne        |
+-----------------------+---------+--------+--------------------------+
| RFM Corp.             | 80,196  | Retail | 1 (Philippines)          |
+-----------------------+---------+--------+--------------------------+
| Swift Foods, Inc.     | 70,875  | Retail | 1 (Philippines)          |
+-----------------------+---------+--------+--------------------------+
| San Miguel Purefoods  | 60,553  | Retail | 1(Philippines)           |
| Company, Inc.         |         |        |                          |
+-----------------------+---------+--------+--------------------------+
| Fil-Am Foods, Inc.    | 30,464  | Retail | 1 (Philippines)          |
+-----------------------+---------+--------+--------------------------+

Note: Purefoods-Hormel and San Miguel Company, Inc. are owned by San
Miguel Corporation.

B. Flour milling except cassava flour milling

  ------------------------ ---------- --------- ---------------------------
  Philippine Foremost      99,642     HRI       1 (Philippines)
  Milling Corp.                                 

  Pilmico Foods Corp.      83,125     HRI       1 (Philippines)

  Morning Star Milling     31,660     HRI       1(Philippines)
  Corp.                                         

  Liberty Flour Mills,     30,803     HRI       1 (Philippines)
  Inc.                                          
  ------------------------ ---------- --------- ---------------------------

C. Manufacturer of Chocolate and cocoa products including chocolate
candies

  ------------------------ ---------- --------- ---------------------------
  Cocoa Specialties, Inc.  24,928     Retail    1 (Philippines)

  ------------------------ ---------- --------- ---------------------------

D. Processing of fruit and vegetable sauces

  ------------------------ ---------- --------- ---------------------------
  Southeast Asia Food,     44,142     Retail    2 (Philippines)
  Inc.                                          

  Heinz UFC Philippines    34,285     Retail    2 (Philippines)

  Genosi, Inc.             14,053     HRI       1 (Philippines)
  ------------------------ ---------- --------- ---------------------------

Note: Southeast Asia Food, Inc. and Heinz UFC Philippines are sister
companies.

E. Manufacture of Diary Products, n.e.c.

  ------------------------ ---------- --------- ---------------------------
  Yakult Philippines       23,642     Retail    1 (Philippines)

  ------------------------ ---------- --------- ---------------------------

F. Manufacture of Butter and Cheese

+-----------------------+---------+--------+--------------------------+
| **Company**           | **      | **E    | **Production/Plant       |
|                       | Sales** | nd-use | Location**               |
|                       |         | Chan   |                          |
|                       | **(\$   | nels** |                          |
|                       | 000)**  |        |                          |
+=======================+=========+========+==========================+
| Kraft Foods           | 109,535 | Retail | 1 (Philippines)          |
| Philippines, Inc.     |         |        |                          |
+-----------------------+---------+--------+--------------------------+
| Magnolia, Inc.        | 65,464  | Retail | 1 (Philippines)          |
+-----------------------+---------+--------+--------------------------+

Note: Magnolia, Inc. is also owned by San Miguel Corporation.

G. Baking of bread, cakes, pastries, pies and similar "perishable"
bakery products

  ------------------------ --------- ------------ ---------------------------
  Goldilocks Bake Shop,    52,053    HRI/Retail   3 (Philippines)
  Inc.                                            

  Gardenia Bakeries        18,071    Retail       1 (Philippines)
  Philippines, Inc.                               

  Golden Donuts, Inc.      15,767    HRI/Retail   1 (Philippines)
  ------------------------ --------- ------------ ---------------------------

H. Baking of biscuits, cookies, crackers, pretzels and similar dry
bakery products

  --------------------- --------- ------------- ---------------------------
  Monde Nissin          269,357   Retail        1 ( Philippines)
  Corporation                                   

  Monde M.Y. San Corp.  56,553    Retail        1 (Philippines)
  --------------------- --------- ------------- ---------------------------

Note: Monde M.Y. San Corp. is a subsidiary of Monde Nissin Corporation

I. Manufacture of macaroni, noodles, couscous and similar farinaceous
products

  --------------------- --------- ------------ ---------------------------
  Unilever Foods        121,214   Retail       3 (Philippines)
  Philippines (CMC),                           
  Inc.                                         

  --------------------- --------- ------------ ---------------------------

J. Manufacture of candies (excluding chocolate candies) and chewing gum

  --------------------- --------- ------------ ---------------------------
  Wrigley Philippines,  23,321    Retail       1(Philippines)
  Inc.                                         

  --------------------- --------- ------------ ---------------------------

K. Manufacture of ice cream and sherbet, ice drop, ice candy and other
flavored ices

  --------------------- --------- ------------ ---------------------------
  Unilever RFM Ice      24,714    HRI/Retail   1 (Philippines)
  Cream, Inc.                                  

  --------------------- --------- ------------ ---------------------------

L. Manufacture of snack products such as corn curls, wheat crunchies and
similar products

+---------------------+--------+-----------+--------------------------+
| Universal Robina    | 4      | Retail    | 1 (Philippines)          |
| Corp.               | 03,267 |           |                          |
|                     |        |           | 5 (Asia)                 |
+---------------------+--------+-----------+--------------------------+
| Commonwealth Foods, | 22,000 | Retail    | 1 (Philippines)          |
| Inc.                |        |           |                          |
+---------------------+--------+-----------+--------------------------+
| Liwayway Marketing  | 19,071 | Retail    | 3 (Philippines)          |
| Corp.               |        |           |                          |
+---------------------+--------+-----------+--------------------------+

M. Manufacture of drinks flavored with fruits juices, syrups & other
materials

  --------------------- --------- ------------ ---------------------------
  Philippine Beverage   86,446    Retail       9 (Philippines)
  Partners, Inc.                               

  Marina Sales, Inc.    36,589    Retail       1 (Philippines)

  Zest-O-Corp.          29,071    Retail       4 (Philippines)
  --------------------- --------- ------------ ---------------------------

Note: Philippine Beverage Partners, Inc. is a subsidiary of San Miguel
Corporation.

Source: Business World Top 1,000 Corporations 2005

######## D. Sector Trends {#d.-sector-trends .unnumbered}

Industry players:

The multi-product food and beverage processing companies and
multinationals or those with foreign partners dominate most of the
categories. A number of them have also increased their presence in Asia
by exporting, joint ventures, direct investment or acquisition of
established companies in other countries with the enormous opportunities
in these markets and their proximity advantage.

[San Miguel Corporation]{.underline} -- the country's biggest
conglomerate, its extensive business covers more than 100 facilities all
over Asia Pacific and its products are distributed or exported to 40
different overseas markets. It has established partnerships with Hormel
Foods International Corporation, the Great Wall Group and the La Salle
Company. Under San Miguel Purefoods Company, Inc., it offers a complete
line of food products and services for both individual and food service
customers. Its businesses range from vegetable oils, feeds, flour,
poultry, fresh and processed meats, dairy products to food service. Its
latest acquisition includes Berri Ltd. and National Foods of Australia.

[RFM Corporation]{.underline} - is the second largest food and beverage
conglomerate in the Philippines. Its food and beverage business include
flour-based products, ice cream, meat based products, pizza, fruit
juices and milk based products. Various acquisitions, partnerships and
licensing agreements are with Sunkist Growers Inc., Unilever Philippines
Inc., Little Ceasar Enterprises, for its pizza business, American Dairy
Queen Corporation for ice cream retailing business.

[Universal Robina Corporation]{.underline} - is one of the largest
branded food product companies in the Philippines that manufacture and
distribute a diverse mix of snack, chocolate, candy, biscuit, bakery,
beverage, noodles and tomato-based products. It has manufacturing
facilities and warehouses in several Asian markets. Some of its branded
consumer food operations are through its wholly-owned or majority-owned
subsidiaries and joint venture companies like Hunt-URC and Nissin-URC.

[Nestle Philippines, Inc]{.underline}. -- it is among the country's Top
10 Corporations and its products are No. 1 or strong No. 2 brands in
their various categories. It has 5 major manufacturing facilities in the
Philippines that supply both the domestic and export market in ASEAN.
Its product range has expanded to include coffee, milk, infant
nutrition, infant food, beverage, non-dairy creamer, food, ice cream and
chilled dairy, breakfast cereals, and confectionery.

[Goldilocks Bakeshop Inc]{.underline}. -- is the No. 1 retail chain
bakeshop in the Philippines with 192 branches nationwide and 17 in North
America. It has remained focused on providing classic Filipino favorites
of cake, pastry, bread and snack products that are popular as gifts and
take home packages. The company first opened shop on May 1966. In 1992,
it diversified into food service. It has recently announced plans to
expand into key Asian markets like Hong Kong, Thailand and Singapore.

[Southeast Asia Food, Inc]{.underline}. -- is the country leading sauce
and condiment company and is the sister company of Heinz UFC
Philippines. The product range of both companies includes banana
ketchup, hot sauce, sweet chili sauce, tomato ketchup, fish sauce, soy
sauce and vinegar.

[Monde Nissin Corporation]{.underline} - is considered as one of the
industry leaders in both noodles and biscuit product categories. Its
partnership with Monde M.Y. San Corporation makes it the market leader
for biscuit and crackers that are also exported to North America,
Europe, the Middle East and Asia.

**Sector Trends:**

Following are some of the trends affecting the food processing industry:

[New beverage flavorings]{.underline} -- the success of a green tea
based ready- to-drink has encouraged renewed competition among beverage
processors of flavored water, energy and health drinks to introduce new
flavors highlighting the health benefits. Powdered drinks still dominate
the market of non carbonated beverages over ready-to-drink but
processors are aggressively looking for other varieties of flavorings.
Even in the carbonated drink market, while still a minor player compared
to Coke, Pepsi and Virgin, a local processor has been making inroads
with its local fruit-flavored sodas like calamansi (lime) and dalandan
(sweet orange).

[Fruit and nut varieties]{.underline} -- Ice cream processors,
especially those catering to the mid to high end market, are always on
the lookout for new fruit variants they can introduce on a seasonal
basis in addition to their regular tropical fruit lines. Tree nut
varieties, especially those not grown in the country, have also
witnessed an increase in usage. In addition to bread and ice cream, tree
nuts are increasingly used in the food service sector, organic or health
food outlets; and family and fine dining establishments.

[Low fat and sugar free]{.underline} -- again, with the increasing
health consciousness among consumers, processors have introduced
"light", "non-fat" or "low sodium" products like milk, cheese, butter,
margarine and canned products. "Sugar free" drinks, baked products and
confectionery are also available but with the Filipinos inclination for
sweet products will most likely remain a niche market.

[Food fortification]{.underline} -- the Department of Health had a 5
year food fortification program called the Sangkap Pinoy Seal (SPS) to
help battle nutrition inadequacy among Filipinos. Food processors that
fortify their products with the recommended levels of various vitamins
and micronutrients were allowed to put the SPS logo in their product
labels as a way of informing consumers that their products can help in
addressing the nutrition problem. The government aggressively campaigned
for this program, with major food processors responding and pursuing
fortification for most of their products. These products included
canned/preserved food, frozen processed food, dairy products, baby food,
oils and fats, noodles, ready-to-eat meals, dried processed foods,
bakery products, sweet and savoury snacks, spreads, sauces, dressings
and condiments.

[New snack flavors]{.underline} -- cheese, barbecue and onion remain
popular flavors in most snack products. However, processors have
developed new variants such as onion, salt, garlic and vinegar, ketchup
flavored, and are looking into increased usage of other flavors such as
beef, sweet corn, sour cream and onion.

[Local and regional tastes]{.underline} -- new variants or products that
capture local or Asian tastes have been introduced particularly in
noodle, meat and condiments processing designed to appeal to the local
or Asian taste. This is because local dishes are almost always
indispensable in many households, despite the increasing Western-style
preferences.

**Consumption Trends:**

The lifestyle of the urban Filipino is continually changing.
Increasingly, the urban consumer not only spends more time away from
home but even home cooked meals are being replaced by packaged or
processed foods in the dinner table. Reasons include heavy traffic,
rural residents commuting daily to nearby cities, increasing rarity of
domestic household help, both parents working or one or both parents
working overseas, and graveyard shifts of those working at 24-hour call
centers. Supermarkets and convenience outlets now typically serve
packaged or ready-to-eat meals.

The National Statistics Office -- Family Income and Expenditures Survey
2003 revealed that the proportion of expenditure on food consumed at
home went down slightly from 38.6 percent in 2000 to 37.3 percent in
2003.

With the Filipino propensity for buying only for each day's or each meal
requirement, the variety and availability of smaller retail packs have
increased. Food processors realize that this is a growing segment of the
market, not only among low income but also among the work force. This
habit is deeply ingrained, even in households that have refrigerators or
freezers.

Food that is healthy and nutritious is also becoming a conscious part of
the Filipino diet. Especially popular are the products that are
affordable, convenient and filling to the stomach. Because of the
government's effort to address nutrition inadequacy and the multi media
attention given to health and nutrition, fortification in processed
foods is becoming a staple with companies highlighting their application
in packaging and advertising.

In addition to food processor companies, opportunities abound to supply
the raw ingredient requirements of food commissaries that cater to
restaurant chains and fast food establishments. Opportunities also exist
for higher-priced ingredients for high-end independent bakers,
restaurants and hotels. With a double digit annual growth - some years
around 20 percent - attributed to the increasing percentage of income
spent on food eaten outside the home and coupled by a changing urban
lifestyle, demand from these establishments are expected to increase.

######### III. Competition in the Sector {#iii.-competition-in-the-sector .unnumbered}

+------------+-----------+-------------+--------------+--------------+
| **Product  | **2004    | **Major     | **Strengths  | *            |
| Category** | Import    | Supply      | in Key       | *Advantages/ |
|            | Sta       | Source      | Supply       | D            |
|            | tistics** | (\$)**      | Countries**  | isadvantages |
|            |           |             |              | of Local     |
|            |           |             |              | Suppliers**  |
+============+===========+=============+==============+==============+
| Red meat   | 125 m     | India (54%) | Indian       | Shortage of  |
| (Beef and  | kilos     |             | buffalo beef | supply. Most |
| pork)      |           | Australia   | that is      | are sold     |
|            | \$ 116.97 | (28%)       | priced       | fresh to wet |
|            | m(FOB)    |             | c            | markets and  |
|            |           | USA (1%)    | ompetitively | supermarkets |
|            |           |             | and used for |              |
|            |           |             | corned beef. |              |
+------------+-----------+-------------+--------------+--------------+
| Milk and   | 261.8 m   | New         | Australia    | Domestic     |
| cream in   | kilos     | Z           | and New      | production   |
| solid form |           | ealand(39%) | Zealand are  | is very      |
|            | \$        |             | major        | minimal to   |
|            | 359m(FOB) | Aus         | producers of | supply       |
|            |           | tralia(22%) | milk         | industry     |
|            |           |             |              | r            |
|            |           | USA(1%)     |              | equirements. |
+------------+-----------+-------------+--------------+--------------+
| Whey or    | 50.4m     | USA (31%)   | USA, while   | No domestic  |
| modified   | kilos     |             | preferred as | supply       |
| whey       |           | Australia   | a suppliers  | available.   |
|            | \$3       | (28%)       | has lost     |              |
|            | 1.3m(FOB) |             | share due to |              |
|            |           | France      | price.       |              |
|            |           | (17%)       |              |              |
+------------+-----------+-------------+--------------+--------------+
| Wheat and  | 2,157m    | USA (50%)   | Quality,     | No domestic  |
| wheat      | kilos     |             | consistency  | production.  |
| flour      |           | Canada      | and          |              |
|            | \$335m    | (20%)       | in-country   |              |
|            | (FOB)     |             | trade        |              |
|            |           | China (13%) | servicing    |              |
|            |           |             | which is     |              |
|            |           |             | crucial in   |              |
|            |           |             | maintaining  |              |
|            |           |             | the loyalty  |              |
|            |           |             | of           |              |
|            |           |             | b            |              |
|            |           |             | uyers/users. |              |
+------------+-----------+-------------+--------------+--------------+
| Edible     | 2.6 m     | India (50%) | India mainly | No domestic  |
| Nuts       | kilos     |             | supplies     | production   |
|            |           | Vietnam     | groundnuts   | of a variety |
|            | \$.9      | (18%)       | while the    | of edible    |
|            | m(FOB)    |             | USA other    | nuts used by |
|            |           | USA (11%)   | types like   | bakeries,    |
|            |           |             | almonds,     | ice cream    |
|            |           |             | pistachios,  | companies or |
|            |           |             | macadamia,   | re-packed    |
|            |           |             | etc.         | under a      |
|            |           |             |              | local brand  |
|            |           |             |              | for the      |
|            |           |             |              | retail       |
|            |           |             |              | sector.      |
+------------+-----------+-------------+--------------+--------------+
| Dried      | 4.1m      | Iran (39%)  | Raisins are  | No domestic  |
| fruits     | kilos     |             | the major    | production   |
|            |           | USA (35%)   | item brought | of a variety |
|            | \$2.3     |             | in under     | of dried     |
|            | m(FOB)    |             | this         | fruits used  |
|            |           |             | category     | by bakeries, |
|            |           |             | both from    | ice cream    |
|            |           |             | the USA and  | companies or |
|            |           |             | Iran.        | re-packed    |
|            |           |             |              | under a      |
|            |           |             |              | local brand  |
|            |           |             |              | for the      |
|            |           |             |              | retail       |
|            |           |             |              | sector.      |
+------------+-----------+-------------+--------------+--------------+
| Dried,     | 82.2 m    | USA (24%)   | USA supplies | No domestic  |
| shelled    | kilos     |             | mainly peas  | production.  |
| leguminous |           | Myanmar     | and lentils  |              |
| vegetables | \$17.9    | (19%)       | while        |              |
|            | m(FOB)    |             | Myanmar and  |              |
|            |           | Indonesia   | Indonesia    |              |
|            |           | (14%)       | for beans.   |              |
+------------+-----------+-------------+--------------+--------------+
| Tomato     | 15.7 m    | USA (41%)   | Mainly       | Domestic     |
| p          | kilos     |             | tomato paste | production   |
| aste/puree |           | China (28%) | is being     | cannot keep  |
|            | \$8.1     |             | imported for | up with the  |
|            | m(FOB)    | Turkey (9%) | processing.  | volume,      |
|            |           |             |              | consistency  |
|            |           |             |              | and quality  |
|            |           |             |              | required by  |
|            |           |             |              | processors.  |
+------------+-----------+-------------+--------------+--------------+
| Extracts,  | 7 m kilos | Ma          | Proximity to | Domestic     |
| essences,  |           | laysia(40%) | Philippines  | production   |
| co         | \$1       |             | and pricing  | cannot meet  |
| ncentrates | 9.2m(FOB) | Ind         | compete with | demand of    |
| of coffee  |           | onesia(30%) | other        | the market.  |
|            |           |             | markets.     |              |
|            |           | USA(4%)     |              |              |
+------------+-----------+-------------+--------------+--------------+
| Cocoa      | 16.1 m    | Ind         | Proximity to | Supply       |
| beans,     | kilos     | onesia(51%) | Philippines  | cannot meet  |
| powder,    |           |             | and pricing  | the          |
| paste and  | \$2       | Ma          | compete with | increasing   |
| butter     | 5.5m(FOB) | laysia(28%) | other        | consumption. |
|            |           |             | markets.     |              |
|            |           | USA(2%)     |              |              |
+------------+-----------+-------------+--------------+--------------+
| Spices in  | 2.7 m     | Sin         | Proximity to | Mostly still |
| bulk       | kilos     | gapore(23%) | Philippines  | sold in      |
|            |           |             | and pricing  | unpacked or  |
|            | \$3.1     | China(10%)  | compete with | unlabelled   |
|            | m(FOB)    |             | other        | formats in   |
|            |           | USA(10%)    | markets.     | open         |
|            |           |             |              | markets.     |
+------------+-----------+-------------+--------------+--------------+
| Sugar      | 83.2 m    | China(34%)  | Technology   | While the    |
| d          | kilos     |             | to obtain    | country now  |
| erivatives |           | USA (27%)   | the required | exports      |
| (lactose   | \$2       |             | spe          | sugar, its   |
| ,fructose, | 9.4m(FOB) | T           | cifications. | does not     |
| glocuse    |           | hailand(6%) |              | have the     |
| and other  |           |             |              | technology   |
| sugars)    |           |             |              | to process   |
|            |           |             |              | sugar        |
|            |           |             |              | derivatives  |
|            |           |             |              | required by  |
|            |           |             |              | carbonated   |
|            |           |             |              | or cola      |
|            |           |             |              | companies.   |
+------------+-----------+-------------+--------------+--------------+
| Fr         | 37 m      | USA(36%)    | The USA      | Local        |
| esh/Frozen | kilos     |             | mainly       | production   |
| potatoes   |           | Aus         | supplies     | of potato is |
|            | \$1       | tralia(26%) | French fries | mainly       |
|            | 3.8m(FOB) |             | for the HRI  | supplied to  |
|            |           | New         | sector.      | chipping     |
|            |           | Z           |              | companies.   |
|            |           | ealand(19%) |              |              |
+------------+-----------+-------------+--------------+--------------+
| Potato     | 2.1 m     | USA(44%)    | USA is       | Local        |
| flour/fla  | kilos     |             | preferred in | production   |
| kes/powder |           | Nethe       | terms of     | is mainly on |
|            | \$        | rlands(25%) | taste and    | potato       |
|            | 1.6m(FOB) |             | quality but  | powder and   |
|            |           | G           | may loss its | starch.      |
|            |           | ermany(19%) | lead due to  |              |
|            |           |             | price.       |              |
+------------+-----------+-------------+--------------+--------------+
| Protein    | 13.8 m    | Israel(26%) | Israel has   | No domestic  |
| co         | kilos     |             | been the     | production.  |
| ncentrates |           | USA(17%)    | traditional  |              |
|            | \$1       |             | known        |              |
|            | 2.1m(FOB) | India(16%)  | supplier     |              |
|            |           |             | although     |              |
|            |           |             | competition  |              |
|            |           |             | from other   |              |
|            |           |             | suppliers is |              |
|            |           |             | increasing   |              |
+------------+-----------+-------------+--------------+--------------+
| Animal &   | 189 m     | Ma          | Proximity to | Local        |
| Vegetable  | kilos     | laysia(70%) | Philippines  | production   |
| fats and   |           |             | and pricing  | is mainly on |
| oils and   | \$        | In          | compete with | cooking oil  |
| their      | 101m(FOB) | donesia(9%) | other        | and fats     |
| fractions  |           |             | markets.     | from coconut |
|            |           | USA(1%)     |              | and corn     |
|            |           |             |              | based        |
|            |           |             |              | products.    |
+------------+-----------+-------------+--------------+--------------+
| Yeasts,    | 5m kilos  | France(37%) | Pricing      | Domestic     |
| baking     |           |             | competes or  | production   |
| powder     | \$        | China(33%)  | is sometimes | cannot meet  |
|            | 7.6m(FOB) |             | lower than   | demand of    |
|            |           | USA(1%)     | domestic     | the market.  |
|            |           |             | production.  |              |
+------------+-----------+-------------+--------------+--------------+

Source: 2004 Volume and Value of Imports, Philippine National Statistics
Office

######### IV. Best Product Prospects  {#iv.-best-product-prospects .unnumbered}

The following products are already present in the market that have good
sales potential:

Wheat

Whey

Soybeans

Green peas

MDM poultry meat

Milk powder

Fresh and dehydrated potatoes

Potato flakes/powder

Tomato paste/puree

Flavoring materials (snack, ice cream, canned or beverage)

Food colors

Fresh, dried, paste tree nuts

Fresh, dried , fillings and dehydrated fruits

Mixed fruits

Baking ingredients (emulsifiers, stabilizers, preservative, improvers,
bases, premixes)

Dressings and spreads

Cocoa based products

Milk replacers

Protein concentrates

Pre-mixed vitamins

Textured vegetable protein

Fats and oils

The following are available in small quantities or are untapped and have
potential for growth:

Meat offals

Animal by-products

Whey powder

Other flavorings, colors and extracts

Egg powder

Sugar substitutes

######### V. Post contact and further information {#v.-post-contact-and-further-information .unnumbered}

Agricultural Trade Office

Foreign Agricultural Service

U.S. Department of Agriculture

Embassy of the United States of America

25/F Ayala Life-FGU Building

6811 Ayala Avenue

Makati City 1203

Tel: (632) 894-5379/63

Fax: (632) 812-5430

Email: [ATOManila@.usda.gov]{.underline}

Annual and updated information on the following related industries and
commodities as reported by the Foreign Agricultural Service in Manila
can also be viewed online at
[www.fas.usda.gov](http://www.fas.usda.gov/) under FAS Attache Reports:

a.  Dairy and Products

b.  Coffee

c.  Livestock and Products

d.  Sugar

e.  HRI Food Service Sector

f.  Retail Sector

g.  Philippine Exporter Guide

**Regional Cooperators:**

Synergy Asia Marketing Services, Inc.

(Philippine representative of **Washington Apple Commission** and the
**California Table Grape Commission**)

Unit 602-C, Summit Office Tower

530 Shaw Boulevard

Mandaluyong City 1501

Metro Manila

Tel: (632) 534-8534; 534-8221; 534-8223

Fax: (632) 534-8234

Contact: Mr. Mandy Saracho, Managing Director

Email: mandys@synergyasia.com

Lieu Marketing Associates Pte Ltd

(ASEAN Representative of **California Pistachio Commission, California
Tree Fruit Agreement, Florida Department of Citrus, Pear Bureau
Northwest, Raisin Administrative Committee, United States Potato Board,
Wine Institute of California,** Western United States Agricultural Trade
Association, Mid-America International Agri-Trade Council, Food Export
USA-Northeast and the Southern United States Trade Association)

Block 3 Alexandra Distripark

Unit 08-22, Pasir Panjang road

Singapore 118483

Tel: (65) 6278-3832

Fax: (65) 6278-4372

Contact: Richard Lieu

Email: richelieu@lieumktg.com.sg

Pacrim Associates Ltd.

(ASEAN Representative for **US Dairy Export Council**)

The Regent Hotel

155 Rajadamri Road

Bangkok 10330, Thailand

Tel: (662) 251-6127

Fax: (662) 254-6913

Contact: Mr. Dan Fitzgerald, ASEAN Representative

E-mail: usdec@pacrimassociates.com

# USA Poultry and Egg Export Council

#15-04 Liat Towers, 541 Orchard Road

Singapore 238881

Tel: (65) 6737-1726

Fax: (65) 6737-1727

Contact: Ms. Margaret Say, ASEAN Representative

Email: usapeec_sing@pacific.net.sg

# US Meat Export Federation

39 Tyrwhitt Road

3rd Floor Suite

207538, Singapore

Tel: (65) 67334255

Fax: (65) 6732-1977

Contact: Mr. Eric Choon, ASEAN Representative

Email: echoon@usmef.com.sg

# 

AgriSource Co., Ltd.

(ASEAN rep for **USA Dry Pea & Lentil Council** and **U.S. Dry Bean
Council**)

Ambassador\'s Court, 4th Floor, No. 416

76/1 Soi Lang Suan, Ploenchit Road

Bangkok 10330, Thailand

Tel: 011-66-2-251-8655/6, 011-66-2-251-8669 & 8772

Fax: 011-66-2-251-0390

Contact: Mr.Tim Welsh, ASEAN Representative

Email: agsource@loxinfo.co.th

# US Wheat Associates 

28/F Ayala-FGU Center

6811 Ayala Avenue

Makati City, Metro Manila 1203

Philippines

Tel: (632) 818-4610 , 63-2-815-4619 Main

Fax: (632) 815-4026

Contact: Mr. Mike Spier, Country Director

Email: mspier@uswheat.org / InfoManila@uswheat.org

http://www.uswheat.org

# American Soybean Association

Unit 1408 B Robinsons-Equitable Tower

#4 ADB Ave. cor Poveda

Ortigas Center

Pasig City, MM 1605

Philippines

Tel: (632)637-5384 to 85 Main

Fax: (632) 637-5388

Contact: Mr. Teodoro M. Cortes, ASA Country Manager

Email: asatcj@mozcom.com

http://www.asasea.com