business and investment opportunities for bamboo
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Business and Investment Opportunities for BambooTRANSCRIPT
BUSINESS & INVESTMENT OPPORTUNITIES FOR
BAMBOO
2 October 2012World Trade Center – Metro Manila
Presentation Outline
The Bamboo Industry Profile
World Bamboo Industry Situation Status of the Philippine Bamboo Industry
Challenges & Business Opportunities
Strategic Responses
Why Invest in Bamboo?
Great global demand; international market value now 10B US dollars Low capital investment for many
products Fast growing; renewable; environment
friendly Technologies available Land available for pole production
The bamboo industryin brief...
The global demand
Bamboo Markets are classified into
Traditional:
HandicraftsBlindsBamboo shoots
Emerging:
Flooring Laminated furniture Construction materials
World Demand for Bamboo & Bambooable Products
Builders’Joinery &carpentry
ActivatedCarbon
BambooHandicrafts
• World Now USD7Bn Size of Current ‘Bamboo’ Markets (USD Millions)
30020
1,500
60
3,000
5
500
100 200
1,100
Chopsticks
BambooShoots
Charcoal Blinds WoodFlooring
WoodPanels
WoodFurniture
Size of Current World Market (USD Millions)
390 1,200 1,500 3,1006,000 6,500
1000014,000
27,000
57,000
Chopsticks
ActivatedCarbon
BambooShoots Charcoal Bamboo &
RattanHandicrafts
BJC Blinds WoodFlooring
WoodPanels
WoodFurniture
*Int’l. Finance Corp., Mekong Private Sector Dev’t. Facility(2007), OXFAM Int’l.*Int’l. Finance Corp., Mekong Private Sector Dev’t. Facility(2007), OXFAM Int’l.
Bamboo & Bambooable
products
China is the top exporter with a
share of 46%
global demand, cont…
Global traded bamboo products
averaged USD 1.49B
in 2007-2010
Bamboo world demandis expected to grow toUSD15–20B by 2015 45% of the total bamboo
market will be accountedfor by emerging products. Traditional products will
grow, but not as fast asthe emerging products
The major markets for bamboo products are:
• European Union• United States• Japan• Canada• China• Singapore• South Korea• Malaysia• Mexico• Australia
The USA is the largestWestern consumer ofbamboo, with annualimports of almostUS$300 million ofbamboo products,95% of which comefrom China.
Source: INBAR 2007-2010
global demand, cont…
About 57% of imports are
bamboo flooring and baskets
Phl bamboo industry as a glance...
Phl Bamboo Export
Export Market are:
EU-27, USA, Japan, Canada, China,
Singapore, Australia, Republic of Korea,
Switzerland, Russia, Hong Kong, South
Africa, Mexico, India, Norway and Turkey
Average Global market growth rate of 7% or valued at US$ 8 billion annually
Major Export bamboo products are Handicrafts andFurniture
Nat’l. Housing Authority
Special Education Fund≈ P 1Billion/annum@ 10% target ≈ P 100M/annum
≈ P 1Billion/annum@ 10% target ≈ P 100M/annum
TOTAL LOCAL DEMAND = P 450Million/annum or $11M
Local demand
P 1Billion/annum@ 25% ≈ P250M/annum
Procurement Budget ≈
Challenges and Opportunities
The supply deficit is about 2 million poles for furniture and 340,000 polesfor handicraft.
Supply-Demand Gap
The estimated demand for furniture is 3.5 million
poles and 575,000 polesfor handicraft
(Source: Foreign Trade Statistics)The supply deficit would require additional
bamboo plantations of 150,000 to 166,000
hectares by 2015
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BAMBOO NURSERY
Total Cost of Investment
PhP41,000.00
31% Return on Investment
Payback Period of approximately
1 year
ASSUMPTIONS 1. It will take about two months to prepare the site
for nursery (1/2 hectare)
2. It will take an average of 5 months for the nursery to prepare and make the bamboo seedlings available for sale.
3. Sales from bamboo seedlings will start on the 7th month of Year 1 operation and onwards.
4. A half-hectare nursery can produce 10,000 bamboo seedlings per year (recovery rate of 83%).
5. Shading materials is estimated at PhP10.00 per 100 propagates.
6. Transportation cost in hauling materials is PhP300 per 6,000 propagules.
7. Cost of nursery maintenance is assumed at PhP1, 000 per month.
8. Cost of fertilizer is PhP3.51 / propagule derived from 260g/propagule multiplied by PhP13.50/kg.
9. Cost of land is excluded in the computations since land valuation varies in every region.
With an average income of PhP13, 000
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BAMBOO PRODUCTION
Total Cost of Investment Php88, 000.00
131% Return on Investment
Payback Period of approximately
10 months
ASSUMPTIONS1. An average of 6 poles per year in every bamboo clump can be harvested.
2. It requires 12.25 hectares in a 7x7 meter area per clump to produce 15,000 bamboo poles.
3. It requires 25 hectares in a 10 x 10 meter area per clump to produce 15,000 bamboo poles.
4. Average cost of hauling is P8.00/bamboo pole.
5. Cost of propagule is P10.00/seedling. A total of 210 propagules are acquired.
6. Cost of transport of propagule from the nursery to the plantation is P0.50/seedling.
7. A clump requires 300g of chemical fertilizer w/ equal amount of nitrogen, phosphorus and potassium every 3 mos. or 1.2kgs/year.
8. A kilogram of fertilizer is valued at P20.00.
9. Labor cost for weeding is P300/hectare and is done twice a year.
10. Replacement of mortality is assumed at 5% of the total propagulesplanted.
11. Maintenance cost is P300/ha. Maintenance is done twice a year.
12. . Harvesting cost is P4.00 per bamboo pole
13. Cost of land was excluded in the computation since land valuation varies in every region.
With an average Annual income of Php114, 000
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BAMBOO NODES
Total Cost of Investment PhP442,000.00
112% Return on Investment
Payback Period of approximately
1 year
ASSUMPTIONS1. An average of 6 poles per year in every bamboo clump
can be harvested.
2. 1 gallon of wood tech could treat 2,000 pieces of bamboo slats [480,000 slats/2,000 = 240 gallons or 1,200 lit.]
3. Two (2) weeks raw materials inventory is allocated.4. Fifty (50) bamboo stem of varied species can yield an
average of 1600 slats.
5. **A pole could produce an average of 32 slats [480,000 slats/32 slats = 15,000 poles.
6. Cost of pole is estimated to increase by 10% yearly.
7. Workers are expected to work for 25 days per month. Rate per day will increase by 10% annually.
8. Overhead costs are also estimated to increase by 10% annually.
9. Price of slat will increase by 5% on the 2nd year and 10% on the 3rd year.
10. Marketing and administrative costs will also increase by 10% yearly.
11. Cost of land was excluded in the computation since land valuation varies in every region.
With an annual average income of
PhP496,600.00
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BAMBOO HUBS
Total Cost of Investment PhP 2,900,000.00
112% Return on Investment
Payback Period of approximately
1 year
ASSUMPTIONS1. The number of slats extracted from one bamboo pole
depends on the specie as follows:
2. Tinik: 4 cuts of 4ft length x 8 slats = 32 slats
3. Botong and Giant bamboo: 6 cuts of 4ft. length x 8 slats = 48
4. Fifty [50] bamboo poles of varied species can yield an average of 1,600 slats.
5. An average of .05kg of glue per square foot of tile, plank and laminated board is needed.
6. An average of 10ml of lacquer per square foot of tile, plank laminated board is needed.
7. One square foot of tile, plank, plybo and laminated board with ½ inch thickness requires 6 slats of 5mm X 1 inch x 4 ft.
8. With 1,600 slats [or 267 sq.ft./day] for 25 days operation per month in 12 months, a hub can produce 80,000 sq.ft. of bamboo tiles/planks/plybo/laminated board with ½ inch thickness.
9. The cost of land was excluded in the computation since land valuation varies in every region.
With an annual average income of
PhP 3,200,000.00
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BAMBOO HUBS (Medium Entrepreneur)
Total Cost of Investment PhP27,525,000.00
181% Return on Investment
Payback Period of approximately
11 months
Financial Assumptions:1. Botong and apos are the identified species of bamboo. They are the
species being considered for engineered bamboo because of their tenacity and thickness;
2. Production area is measured at 2,000 sq. meters;
3. Given an eight-hour and six days a week production, the business has the rated capacity to produce 200,000 square meters of engineered bamboo yearly based on the capacity of the set of equipment that they will be acquired from Shanghai, China.
4. The production will require 780,250 poles in a year [1 pole = 88 slats (11 3 ft round pole x 8 slats per round pole)];
5. Capacity utilization is 50% and will increase by 20% on the succeeding years.
6. Working capital cycle is one (1) month.
7. Products will be priced based on production costs. An average of 50% mark-up on cost will be implemented and the scheme of payment is cash basis, FOB shipping point;
8. Production ratio: Bamboo Planks=50%, Bamboo Laminated Board=10%, Bamboo Cabinet Doors=40%
9. Number of slats needed per product: planks=24; laminated boards=9; cabinet doors=34
10.Two production supervisors will be hired to oversee the daily operations of the business;
11.There are 74 production workers needed in the operation;
12.The business will incur an estimated promotional cost of Php 100,000.00 monthly;
13.All expenses will increase by 10% per annum
With an annual average income ofPhP 49,725,000.00
The Big Four
Tissue Culture
TOTAL PROPAGULE REQUIREMENT
500,000 HAS x 200/HA = 100 M PROPAGULES
Bamboo Farming/Plantation
• Construction, furniture & handicraft sectors
• Fish pen operators• Fruit & vegetable sector• Charcoal producers• Power providers
Cost/ha 30K
Benefit cost ratio (15%) 1.63
Potential Markets
Primary Products
Potential Markets• Construction industry• Furniture industry• Handicraft industry• Others
For Banana Props
Engineered Products
Potential Markets• Construction industry• Furniture industry• Handicraft industry• Others
DTI-CITC
Carved Articles
Handicrafts
Fences
Gazebos
Charcoal
• Hotels, restaurants, residences
• Supermarkets, warehouses• Hospitals, drug companies• Vehicle owners
Cooking & Heating
Air/water purification
Detoxification
Medicine
Lump or rawBriquetteActivated
Power Generation
Biomass
Cooking
Electricity
Heating
Bamboo Pellets
Executive Order 879Creating the Philippine Bamboo Industry Development Council (PBIDC) to promote the bamboo industry development project
EO 879 (PBIDC, 2010) allots 500,000 ha new forest planted to bamboo by 2020.
… directing the use of bamboo for at least twenty five (25%) per cent of the
desk and other bamboo furniture requirements of public elementary and secondary schools and prioritizing the use of bamboo in furniture fixtures and
other construction requirements of government
Rationale for the EO
RP contribution to ASEAN to reforest at least 500k hectares with bamboo from 2010 to 2020;
Planting bamboo can significantly help mitigate climate change and reduce impacts of natural disasters;
Bamboo can be used as cash crops for farmers;
RP can have larger share in 10B US$ global market;
Bamboo industry needs to be strengthened.
Major Provisions
PBIDC - to provide overall policy and program directions.
Executive Committee to assist PBIDC in program/project identification and resource generation.
Technical Working Group to assist Executive Committee.
DENR and associated units shall use bamboo for at least 20% of its annual reforestation.
PBIDC
Executive Committee
TWG
Council Composition
12 Members
Chair Secretary, DTI
Secretary, DENR
Secretary, DA
Secretary, DepEd
Secretary, DOST
Secretary, DOLE
Chair, Exec. Comm.
League of Municipalities of the Philippines
2 Representatives, NGOs
2 Representatives, Private Industry Associations
Members
PROGRAM COMPONENTS
DENR (FMB, MGB, LLDA, ERDB)DADAR (Excom Member)
NCIP (Excom Member)
DTIDOSTDepEdDOLECITC (TWG)
BambooPhilAHON MovementPHILEXPORTPCCILMP
shall look into disaster mitigation projects involving community development and social protection and responsibility.
shall take into account climate change mitigation measures.
shall address primarily poverty mitigation which would cover dev’t nodes & hubs, prodev, value/supply chain mgt, marketing & technology.
BUSINESS & INVESTMENT OPPORTUNITIES FOR
BAMBOO
2 October 2012World Trade Center – Metro Manila
UNDERSECRETARY MERLY M. CRUZChair, PBIDC Executive Committee