COMMUNITY WEALTH CREATION INITIATIVES IN COMMUNITY WEALTH CREATION INITIATIVES IN MINDANAWMINDANAW
KATILINGBANONG PAMAHANDI SA KATILINGBANONG PAMAHANDI SA MINDANAW FOUNDATION INC.MINDANAW FOUNDATION INC.
The Social Enterprise Institution of The Social Enterprise Institution of Balay Mindanaw Group Balay Mindanaw Group
KPMFI… KPMFI… • relatively newcomer in the field of social relatively newcomer in the field of social
enterpriseenterprise
• registered with Securities and Exchange registered with Securities and Exchange Commission (SEC) last Oct. 17, 2006Commission (SEC) last Oct. 17, 2006
• It is an institution that has been It is an institution that has been conceptualized by the leadership of Balay conceptualized by the leadership of Balay Mindanaw Foundation, Inc. Mindanaw Foundation, Inc. (www.balaymindanaw.org) (www.balaymindanaw.org)
after seeing the need for an institution that after seeing the need for an institution that will focus on social enterpriseswill focus on social enterprises
• It is also a logical evolution of its area based It is also a logical evolution of its area based development work for the last 11 years. development work for the last 11 years.
RationaleRationale• Integral part of our SIAD work as realized when we Integral part of our SIAD work as realized when we
implemented the SIAD Programimplemented the SIAD Program
• PuttingPutting value value from the existing initiatives (SIAD – from the existing initiatives (SIAD – COCOBREAD)COCOBREAD)
• Taking –off from the strength of the livelihood projects Taking –off from the strength of the livelihood projects of the partner communities in the last five years of the partner communities in the last five years (production, processing and marketing) (production, processing and marketing)
• How to ensure that “small How to ensure that “small victories and gainsvictories and gains” ” achieved by the partner PO’s and partner barangay and achieved by the partner PO’s and partner barangay and local government units will be protected and enhanced local government units will be protected and enhanced to grow stronger as the vehicle towards development to grow stronger as the vehicle towards development and become a foundation for building sustainable peace and become a foundation for building sustainable peace in the partner communitiesin the partner communities
Vision (Internal)Vision (Internal)
• A Social Enterprise NGO with big A Social Enterprise NGO with big dreams for its partner communities dreams for its partner communities under the BM Group of NGOs, with under the BM Group of NGOs, with professionalism at par with national and professionalism at par with national and global standards, and a local NGO with global standards, and a local NGO with a passion to revolutionize production a passion to revolutionize production technologies and contributing to market technologies and contributing to market reforms thus making it accessible to the reforms thus making it accessible to the poor…poor…
Mission : Mission :
• Helping Build Community Sustainable Helping Build Community Sustainable Enterprises Enterprises
• Helping Build Opportunities for Wealth Helping Build Opportunities for Wealth Creation for Local Entrepreneurs Creation for Local Entrepreneurs
• Helping Build Vibrant Local Economies Helping Build Vibrant Local Economies
• Helping Build Foundation of Sustainable Helping Build Foundation of Sustainable PeacePeace
• Helping Build Sustainable Business Models Helping Build Sustainable Business Models for Social Enterprises for Social Enterprises
Goals and Objectives(in Goals and Objectives(in 10yrs):10yrs):• Establish at least 10 farm based and off-farm Establish at least 10 farm based and off-farm
sustainable and viable community enterprisessustainable and viable community enterprises• Develop at least 1500 community based Develop at least 1500 community based
entrepreneursentrepreneurs• Establish direct joint venture investments Establish direct joint venture investments
with at least 10 business corporations, with with at least 10 business corporations, with LGU’s (province, municipalities/cities and LGU’s (province, municipalities/cities and barangays) and with enterprising NGO’s and barangays) and with enterprising NGO’s and PO’s and other civil society groups. PO’s and other civil society groups.
Strategies and ProgramsStrategies and Programs(SE Promotion or Scaling-up)(SE Promotion or Scaling-up)• Community-Based Work (Participatory Local Community-Based Work (Participatory Local
Governance, Access to Justice and Peace Building)Governance, Access to Justice and Peace Building)• Capacity Building program for partner PO’s and Capacity Building program for partner PO’s and
LGU’s on sustainable enterprisesLGU’s on sustainable enterprises• Joint venture partnerships with business Joint venture partnerships with business
corporations, enterprising NGO’s/PO’s, Local corporations, enterprising NGO’s/PO’s, Local Government Units (province, municipality/city and Government Units (province, municipality/city and barangays)barangays)
• Business Development ServicingBusiness Development Servicing• Market Development and Linkages (both for Market Development and Linkages (both for
mainstream and niche markets)mainstream and niche markets)• Capital Sourcing from Government, Donors and Capital Sourcing from Government, Donors and
Business CorporationsBusiness Corporations
KPMFI’s CORE BUSINESS
Helping Transform Agri-Based Poor Households to
become Entrepreneurs
WHAT WILL BE OUR WHAT WILL BE OUR BUSINESS MODEL?BUSINESS MODEL?
Rural Household Usual Situation in terms of Income and Rural Household Usual Situation in terms of Income and ExpensesExpenses
DailyDaily WeeklyWeekly MonthlyMonthly QuarterlQuarterlyy
SeasonSeasonalal
YearlyYearly
IncomeIncome BananaBanana CopraCopra
CoffeeCoffeeCornCorn
RiceRiceCassavaCassava
AbaccaAbacca
ExpensesExpenses FoodFood
School School BaonBaon
Farm Farm InputsInputs
WaterWater
ElectricityElectricity
SchoolSchool
TuitionTuition
RequiremenRequirementsts
Post Post harvest harvest ServiceServicess
Post Post harvest harvest ServiceServicess
Post Post harvest harvest ServicesServices
Context…Context…
Rural Household Usual Situation in Rural Household Usual Situation in terms of Income and Expensesterms of Income and Expenses
Result:Result:
Diminishing CapitalDiminishing Capital
Limited Capacity to ProduceLimited Capacity to Produce
Low ProductionLow Production
Low IncomeLow Income
PovertyPoverty
Immediate Challenge…Immediate Challenge…1. Increase Farmer’s Income1. Increase Farmer’s Income
Daily – Weekly – Monthly – Quarterly – Daily – Weekly – Monthly – Quarterly – SemestralSemestral
2.2. Good Social Enterprise Good Social Enterprise Triple Bottom Lines:Triple Bottom Lines:a. Raise the Quality of Life of the Poor (Doing Good)a. Raise the Quality of Life of the Poor (Doing Good)b. Generate Social Enterprise Income (Doing Well)b. Generate Social Enterprise Income (Doing Well)c. Address Social Issues (Doing Right)c. Address Social Issues (Doing Right)
Daily Weekly Monthly Quarterly Seasonal Yearly
ON-FARM DairyEgg
BananaCut FlowerVegetables
PoultryGoatVegetables
CopraCoco HuskLawi (broom)Coffee
CornRice
CassavaAbacca
OFF-FARM • SilhiG, Banig, Basket, Hand Craft, Post Harvest Facilities, Trading and Marketing
Schedule of Harvest
Daily Weekly Monthly Quarterly Semestral Yearly
Banana CopraCoconut Husk
CornRice
Cassava
Current Current SituationSituation
TRANSFORMATION TRANSFORMATION PROCESSPROCESS
RECLAIIMRECLAIIM
Rural Enterprises thru Crop-Rural Enterprises thru Crop-Livestock-Aqua Integration-Livestock-Aqua Integration-Intensification Model Intensification Model (RECLAIIM)(RECLAIIM)
INCOME SOURCE
Daily Weekly Monthly Quarterly
Seasonal
Yearly
ON-FARM DairyManureEgg
BananaCut FlowerVegetables
PoultryGoat MeatVegetablesOrganic Fertilizer
CopraHuskLawiCoffee
CornRice
CassavaAbaccaCattle Meat
OFF-FARM
• Silhig
• Banig
• Basket
• Hand Craft
• Post Harvest Service
• Trading and Marketing
Investment per HouseholdLivestock Input Investment
NeededProjected
Income per Month
Backyard Poultry Production
1,000 heads
120,000 P 6,000
Goat Dairy and Meat Production
20 Heads 120,000 P 6,000
Cattle Dairy and Meat Production
3 heads 150,000 P 10,000
TOTAL P 390,000 P 22,000
TRANSFORMATION PROCESS TRANSFORMATION PROCESS OVERVIEWOVERVIEW
ProductioProduction n Processing Processing Marketing Marketing
Farmer Supplier/Transporters
Processors
Whole-salers
Exporters
Retailers
Retailers
Local Market External Market
Input Supplier
Intra-chain/Inter-actor support, coordination, facilitation and consolidation and Supply Chain Management
Business Devt. Services
Community Development
Work
Multiplier Farm(Research and Development)
Market Development
Donors
Value Chain
Supporters
MFI/BANKS GOVT.
NGOS
BUSINESS CORPORATIO
N
Value Chain Actors
KPMFI core
interven-tion and
Programs
Basic Value Chain
Franchising Development
WHAT WILL BE OUR WHAT WILL BE OUR BUSINESS DESIGN?BUSINESS DESIGN?
Manok MindanawManok Mindanaw Backyard Poultry Production ProjectBackyard Poultry Production Project
20062006
Context:Context:• Provide additional Household incomeProvide additional Household income• Maximizing productive local resource Maximizing productive local resource
(land, labor, water and indigenous (land, labor, water and indigenous materials)materials)
• Revolutionize the poultry industry Revolutionize the poultry industry through backyard poultry project through backyard poultry project (breaking tradition)(breaking tradition)
Current Trend and System of Broiler Industry in the Philippines : Current Trend and System of Broiler Industry in the Philippines : Commercial Contract Grower (Conventional)Commercial Contract Grower (Conventional)
Large Contract Growers Large Contract Growers 120,000 birds/Grower120,000 birds/Grower
2424Flockman : 1 SupervisorFlockman : 1 Supervisor(25% Labor and 75% Owner)(25% Labor and 75% Owner)
Supplier 2Supplier 2
IntegratorIntegrator-Magnolia, -Magnolia,
Bounty, GAMA, Bounty, GAMA, ACIACI
InputsInputs-DOCDOC
- FeedsFeeds-Vaccines, Vaccines, MedicinesMedicines
- Technical Technical
Supplier 3Supplier 3
Supplier 1Supplier 1
Feed Feed MillMill
Contract Contract Agreement :Agreement :ALW = 1.4ALW = 1.4HR = 95%HR = 95%FCR = 1.85FCR = 1.85GF = Pph 8.00/birdGF = Pph 8.00/bird
Dressing Dressing Plant Plant
MarketingMarketing
DistributionDistributionFresh, Frozen and Fresh, Frozen and Processed ProductProcessed Product
OutputOutput30-35 day old 30-35 day old
chickenchicken
Food Food ProcessingProcessing
Revolutionizing the Broiler Industry in the Philippines : Revolutionizing the Broiler Industry in the Philippines : Commercial Contract Grower to Backyard Contract GrowerCommercial Contract Grower to Backyard Contract Grower
Backyard Contract Growers Backyard Contract Growers 120,000 birds @ 600 birds/Grower120,000 birds @ 600 birds/Grower
200 Households200 Households100% GF goes to the Household100% GF goes to the Household
IntegratorIntegratorACI/Sr. Pedro ACI/Sr. Pedro
LMLMInputsInputs-DOCDOC
- FeedsFeeds-Vaccines, MedicinesVaccines, Medicines
- Technical Technical
SuppliersSuppliers
Dressing Dressing Plant Plant
MarketingMarketing
DistributionDistributionFresh, Frozen and Fresh, Frozen and Processed ProductProcessed ProductFeed Feed
MillMill
OutputOutput30-35 day old 30-35 day old
chickenchicken
Contract Contract Agreement :Agreement :ALW = 1.4ALW = 1.4HR = 95%HR = 95%FCR = 1.85FCR = 1.85GF = Pph 8.00/birdGF = Pph 8.00/bird
Food Food ProcessingProcessing
KPMFIKPMFIFACILITATOR, FACILITATOR,
ORGANIZER AND ORGANIZER AND CONSOLIDATORCONSOLIDATOR
KPMFIKPMFIFACILITATOR, FACILITATOR,
ORGANIZER AND ORGANIZER AND CONSOLIDATORCONSOLIDATOR
KPMFI’s KPMFI’s Fee = 2/klFee = 2/kl
Management Fee = Management Fee = 3% of total INPUT 3% of total INPUT Cost (Pph 1.40/kl)Cost (Pph 1.40/kl)
Household BACKYARD Household BACKYARD MODEL MODEL Household BACKYARD Household BACKYARD MODEL MODEL
KPMFIKPMFIINTERMIDIARY, FACILITATOR, ORGANIZER AND CONSOLIDATORINTERMIDIARY, FACILITATOR, ORGANIZER AND CONSOLIDATOR
Warehouse and Warehouse and LogisticsLogistics
Trucks (1 chickvan Trucks (1 chickvan and 2 harvester and 2 harvester
with crates)with crates)
Setup of Admin and Setup of Admin and FinanceFinance
Technical PersonsTechnical Persons
Revolutionizing the Broiler Industry in the Philippines : Revolutionizing the Broiler Industry in the Philippines : Commercial Contract Grower to Backyard Contract GrowerCommercial Contract Grower to Backyard Contract Grower
Initial Investment Initial Investment of 3 Mof 3 M
WarehousingWarehousing
Sampling and Sampling and Harvesting Harvesting
Technical Training on Technical Training on Broiler Mngmt.Broiler Mngmt.
Technical Monitoring Technical Monitoring
Recruitment, Recruitment, Orientation and COingOrientation and COing
Delivery and Delivery and Distribution Distribution
Billing and PaymentBilling and Payment
Growers Assessment Growers Assessment and Programming and Programming
Contract Contract Agreement :Agreement :ALW = 1.4ALW = 1.4HR = 95%HR = 95%FCR = 1.85FCR = 1.85GF = Pph 8.00/birdGF = Pph 8.00/bird
KPMFI’s Fee = KPMFI’s Fee = 2.00/kl2.00/kl
Management Fee = Management Fee = 3% of total INPUT 3% of total INPUT Cost (Pph 1.40/kl)Cost (Pph 1.40/kl)
700 Households 700 Households engage into Contract engage into Contract
GrowingGrowing
What we have done so far….What we have done so far….
# HH # DOC Grower’s Net Income Grower’s Net Loss2006 248 140,429 1,303,884.48 19495.452007 655 694200 4,355,184.48 675,328.56
Totals 834,629 5,659,068.96 694,824.01
Observation: 1.Grower’s Buy out per bird is only 6.78/bird2.11% net loss from the supposedly total net income of the growers3.Almost 400% increase of total Day old Chick from 2006 to 20074.164% increase of Household engage in contract growing (2006 – 2007)5.Involving 2 Municipality and 1 City with a total of 59 Barangays 6.Average Grower’s Net Income 2006 – Pph 5,257.59/grower 2007 – Pph 6,649.13/grower
# DOC Harvested Harvest
Recovery Average Live
Weight
Feed Conversion
Rate 550,077.00 507,298.00 92% 1.48 1.80
1.92% harvest recovery is lower of 3% of the target HR of 95%2.Average Live weight is significantly higher to the target ALW (more percentage of oversize)3.FCR is significantly good (feed conversion rate)
AS of May 2008 AS of May 2008
Finance ?Finance ?
HH Grower’s Projected Income
Item Unit Unit price Quantity Cost
FARM Inputs Cost Day Old Chick bird 17.00 200 3,400.00 CBM (Chick booster mash) sack 860.00 2.00 1,720.00 BSC (Broiler Starter Crumble/Mash) sack 790.00 8.00 6,320.00 Total volume of Feeds sack 10.00 8,040.00 Cost of Medicines (2.00/bird) pesos 2.00 200 400.00 Total Input Cost 11,840.00 Hauling Charges DOC @ 0.5/DOC bird 0.50 200.0 100.00 FEEDS @ 35/SACK sack 35.00 10.0 350.00 Total Hauling Cost 450.00 Total Cost (Inputs and Hauling Charges) 12,290.00 Interest Income (3% of the total farm inputs) 368.70 Total Cost of Inputs and interest 12,658.70 Sales 52.00 per kl of the total harvest @ 1.45 ALW with 5% mortality) 14,326.00 Chicken Dung sack 60.00 4.00
Gross Sales 14,566.00
Gross Income 1,668.00 Profit per Bird 8.80 Assumptions: FCR 1.95 ALW 1.45 HR 95%Buy-out per Kilo 52
Site Inspection of the Proposed BBPP
Basic Orientation on BBPP (1 day)
Inspection of poultry house and equipment and approval
Technical Training on Broiler Management and Scheduling
Final Preparation of Housing and Brooding Area. Delivery of Initial INPUTs (feeds and medicine)
Monitoring on Growing Stage
Delivery of Feeds
Placement of Day Old Chick (DOC) Delivery and
Administration of Vaccines
Brooding Period (14 days)
Harvesting and delivery to Dressing Plant (35th day)
Sampling for Harvesting
Billing to ACI and Grower Billing to ACI and Grower
Payment to Growers
(15 days after harvest)
Payment to Growers
(15 days after harvest)
Growers’ Evaluation and Scheduling for Next Cycle
Growers’ Evaluation and Scheduling for Next Cycle
Approval and Signing of MOA – Memorandum of Agreement
Project Process OverviewProject Process Overview Construction of
Poultry House and Purchase of basic facilities and equipment
Next Production Cycle (21 days after harvest)
Payment and Collection of Payment from ACI
Payment and Collection of Payment from ACI
Site Inspection of the Proposed BBPP
Basic Orientation on BBPP (1 day)
Approval and Signing of MOA – Memorandum of Agreement
Construction of Poultry House and Purchase of basic facilities and equipment
Inspection of poultry house and equipment and approval
Technical Training on Broiler Management and Scheduling
Final Preparation of Housing and Brooding Area Delivery of Initial INPUTs (feeds and medicine)
Pre-production Stage
Monitoring on Growing Stage
Delivery of Feeds
Harvesting and delivery to Dressing Plant (35th day)
Sampling for Harvesting
Placement of Day Old Chick (DOC)
Delivery and Administration of Vaccines
Brooding Period (14 days)
Billing to ACI and Grower Billing to ACI and Grower
Payment to Growers
(15 days after harvest)
Payment to Growers
(15 days after harvest)
Growers’ Evaluation and Scheduling for Next Cycle
Growers’ Evaluation and Scheduling for Next Cycle
Next Production Cycle (21 days after harvest) Next Production Cycle (21 days after harvest)
Payment and Collection of Payment from ACIPayment and Collection of Payment from ACI
Production Stage Post-production Stage
Backyard Broiler Production Project FlowBackyard Broiler Production Project Flow
Offsetting of Inputs
Purchases and Sales of Stocks with
Hauling Cost
Offsetting of Purchases of Stocks and
Sales of INPUTS and
Hauling Cost
ANACIANO, INC. (INTEGRATOR)
ANACIANO, INC. (INTEGRATOR)
KPMFI (INTERMEDIARY)
KPMFI (INTERMEDIARY)
BACKYARD GROWERSBACKYARD GROWERS
Supply of INPUTS and Technical Services
Supply of INPUTS and Technical Services
Logistics (Delivery and Distribution) Logistics (Delivery and Distribution)
Production (30-35 days of broiler raising)
Production (30-35 days of broiler raising)
Processing Processing Logistics (Harvest, Consolidation and Hauling to Dressing Plant)
Logistics (Harvest, Consolidation and Hauling to Dressing Plant)
Produced ChickenProduced Chicken
Billing and payment Billing and payment
Billing and payment Billing and payment
Billing and payment Billing and payment
StakeholdersStakeholders
ANACIANO, INC. (INTEGRATOR)
ANACIANO, INC. (INTEGRATOR)
KPMFI (INTERMEDIARY)
KPMFI (INTERMEDIARY)
BACKYARD GROWERSBACKYARD GROWERS
Supply of INPUTS and Technical Services
Supply of INPUTS and Technical Services
Logistics (Delivery and Distribution) Logistics (Delivery and Distribution)
Production (30-35 days of broiler raising)
Production (30-35 days of broiler raising)
Processing (Dressing Plant)
Processing (Dressing Plant)
Logistics (Harvest, Consolidation and Hauling to Dressing Plant)
Logistics (Harvest, Consolidation and Hauling to Dressing Plant)
Produced Live ChickenProduced Live Chicken
Production
Sr. Pedro Litson Manok
Sr. Pedro Litson Manok
Premium Size (20%)Premium Size (20%)
Premium Size (50% ) Premium Size (50% )
Manok Mindanaw
The Healthy Chicken
Manok Mindanaw
The Healthy Chicken
MarketingMarketing
Out Size (US/OS (30%)Out Size (US/OS (30%)
Distribution
Promotion
Merchandising
Sales/Collection
BulkBulk
Individual Pack Individual Pack
Domestic
Dealer
Retailer
Hotel/Res
Supermarkets
Export Importer
CDO, Iligan, Ozamis,Zamboanga, Gignoog, Butuan, Surigao, Davao, Bukidnon...
Cebu, Bohol, Dumaguete, Iloilo, Bacolod
Malaysia, Brunie, Singapore…
Dressing Plant Dressing Plant
NCR ?
Target Costumer
Target Area
Premium Size (2,000 kls)
Premium Size (2,000 kls)
Out Size (US/OS )
3,000 kls.
Out Size (US/OS )
3,000 kls.