An Enterprise Study of Bamboo Processing Enterprises in Selected Areas in Cavite Province
Date
5-2024
Degree
Bachelor of Science in Agribusiness Management
College
College of Economics and Management (CEM)
Adviser/Committee Chair
Arlene C. Gutierrez
Committee Member
Rachelle A. Mariano, Ma. Teresa A. Acda, Reginald B. Vargas, Melodee Marciana E. De Castro
Abstract
An enterprise study was conducted to analyze the state and performance of micro- to small-scale bamboo processing enterprises in selected areas in Cavite. Specifically, the researcher aimed to: a) discuss the environmental factors affecting the bamboo processing enterprises in Cavite; b) present their socio-demographic and business profiles; c) describe their management practices and the key functional problems they encounter; d) analyze the key players’ entrepreneurial traits and characteristics through the model of entrepreneurial orientation (EO) with its five dimensions; e) assess the enterprises’ business performance; f) discuss the levels of EO dimensions across socio-demographic and business profiles; g) examine the relationship between entrepreneurial orientation and business performance; and h) formulate recommendations to improve their business performance.
A total of 82 respondents were covered in the study, consisting of 66 bamboo skewer manufacturers and 16 bamboo furniture and handicraft manufacturers. The researcher employed the snowball sampling method for the former, whereas a complete enumeration was intended for the latter. The researcher employed a combination of qualitative and quantitative research designs to address the research objectives, employing descriptive and non-parametric correlational research tools. The researcher used the EO model to analyze entrepreneurial traits and characteristics, which were then subject to statistical analysis, examining its association across demographic and business profiles and its correlation to the business performance among key players. In analyzing the enterprise environment, PESTLE analysis and SWOT analysis were utilized.
The macro-environmental analysis identified various factors affecting bamboo- based enterprises in the Philippines, discussing the government initiatives that provide both opportunities and challenges for the industry. The country’s economic recovery from the aftermath of the COVID-19 pandemic generally benefited the industry, as reflected in the surge in the respondents’ sales in 2022. Positive social forces are comprised of changing consumer preferences and the rising house resettlement projects, but the trend of poverty incidence poses challenges. Technological advancements drive growth, leading to the emergence of engineered bamboo products, while the province’s environmental suitability for cultivating kawayan tinik (Bambusa blumeana) and global wood shortages offer opportunities despite local climate impacts on bamboo quality.
Findings revealed that females dominate the bamboo skewer manufacturing sector (89.39%). 78.79% were married, while the average age recorded was 46. They all operate on microscale and subsistence levels, 95.45% were informal and unregistered, and their average years of operations was 19.53. They are all native to Maragondon and situated across its eight rural barangays. In contrast, the average age of bamboo furniture and handicraft manufacturers was 38.94. Most of them were married males (62.50%), with 62.50% identified as migrants from San Carlos, Pangasinan. The average business existence was lower than that of bamboo skewer manufacturers, operating for an average of 11.63 years. Manufacturers are scattered along major highways of the 7th and 8th districts of the province.
Women predominantly handle the major operations for bamboo skewer manufacturing. Utilizing different sizes of Kawayan Tinik (Bambusa blumeana), manufacturers rely on traditional hand-held tools in the manufacturing process. Product lines are limited to food skewers of different sizes. Word-of-mouth strategy is usually employed to be known by skewer trader-buyers who hold the higher bargaining power. Workforce units are family members who are not being paid. Their financial practices are characterized as informal since they do not employ formal recording and budgeting practices. Key functional problems they face include inconsistent quality of poles, unfavorable weather conditions, physical exhaustion, lack of control over prices, lack of market awareness, and low sales.
Contrastingly, more diverse product lines were discovered in the sector of bamboo furniture and handicraft manufacturers, ranging from woven handicrafts, traditional furniture and handicrafts, agricultural implements, and nipa huts (bahay kubo) to different varieties of engineered bamboo products. This means that manufacturing processes are more complex and differentiated. All of these utilize Kawayan Tinik (Bambusa blumeana) since it is the most abundant species in the province and the most favorable material for construction and handicraft purposes. A cost-plus pricing strategy was common among them. Road-side displays, word of mouth, and Facebook marketing were the common marketing strategies targeting the identified markets within Region 4a (CALABARZON) and the National Capital Region (NCR). The typical clients would comprise owners of farm lots, resorts, restaurants, recreational parks, and LGUs, among others. About 75% of the respondents employ stay-in laborers paid on a per-output basis. The financial aspect of bamboo furniture and handicraft manufacturers can also be distinguished based on their products. Weavers of bamboo handicrafts would require an initial capital of Php5,145, and the payback period is within one month. Traditional bamboo furniture and handicraft makers require Php50,000 to Php350,000 with payback periods of one month to one and a half years of operations. As of the third quarter of 2023, the shared-service facility of Kawayang Maragondon Municipal Economic Enterprise (KMMEE), one of the respondents producing engineered bamboo products, is valued at Php3,903,000. Manufacturers of bamboo furniture and handicrafts are said to be constrained by pest infestation, shortage of other forest raw materials, unfavorable weather conditions, high degree of product substitutability, plagiarism on social media, seasonality of some products, cash advances from laborers, uncompetitive salaries for laborers, high cost of production, lack of working capital, and high cost of outbound logistics.
The assessment of entrepreneurial orientation revealed that the bamboo skewer manufacturers had the highest manifestation of autonomy dimension (5.15) as they operate with strong family ties wherein decisions are made collaboratively with open communication and shared responsibility. Meanwhile, the proactiveness was measured as moderately manifested (4.15), with nearly half (48.48%) of the population still producing skewers during the COVID-19 pandemic despite being unable to sell their produce. They were by the opportunity of a surge in sales from the possible reopening of the economy. However, they are relatively weak in risk-taking (3.51), innovativeness (3.47), and competitive aggressiveness (3.13) dimensions. On the other hand, risk-taking (4.90) was found, with most of the manufacturers being migrants who took the risk of venturing into a new location. The innovativeness dimension was also relatively strong, with several manufacturers adopting modern designs for nipa huts with steel roofing, electrical systems, sliding windows, etc., and the fact that there exists a pioneer producer of engineered bamboo products in the province. However, most of the manufacturing processes are still traditional for 15 out of 16 respondents. Interestingly, artisans appear to have a relatively strong autonomy (4.75). They are always encouraged to contribute ideas, particularly in the production aspect, but their access to important financial information is inadequate.
The subjective assessment of product performance identified that bamboo skewer manufacturers had moderate success in sales and market share establishment (4.16). They perceived that the local food industry in the province and parts of NCR heavily rely on their production, with some expressing positive earnings given the low capitalization and minimal efforts while manufacturing at their households. However, the recorded sales undoubtedly fall below the municipality's minimum wage, making the venture sustainably challenging. Bamboo furniture and handicraft manufacturers, on the other hand, demonstrated a relatively strong product performance (5.07). They were able to exploit the opportunity from the surge in tourism and recreational activities across CALABARZON. However, operational bottlenecks in catering to simultaneous projects have become an issue for most of the traditional manufacturers. In terms of profitability, bamboo skewer manufacturers accrued an average monthly net income of Php3,462.88 with a net profit margin of 81.26%. However, when factoring in notional labor costs relative to the municipality’s minimum wage, a theoretical net loss and negative profit margin were determined. Bamboo furniture and handicraft profitability varied widely. Weavers of bamboo handicrafts had an average annual net income of Php290,000 (77.98% profit margin), while traditional furniture and handicrafts showed diverse net income and profit margins ranging from Php30,730 (5.49%) to Php1,657,665 (23.18%). In 2022, KMMEE experienced a net income loss of Php268,900 (-67.23%).
In the correlation analysis conducted for entrepreneurial orientation and business performance, proactiveness and autonomy dimensions were linked to better product performance among bamboo skewer manufacturers. However, none of the dimensions showed significance in explaining the variation of their profit margins, suggesting a further outlook on the moderating variables. Proactiveness and innovativeness, on the other hand, were the key dimensions for the increased sales and successful market share establishment among bamboo furniture and handicraft manufacturers. In the dimension of profitability, proactiveness was linked to higher profits, whereas risk-taking and innovativeness were associated with lower profits.
Overall, specific recommendations for each key stakeholder were formulated to enhance the overall performance of the bamboo processing industry in Cavite. For bamboo skewer manufacturers, the researcher recommended the implementation of proactive concentric diversification, expanding product lines by introducing other items, such as chopsticks, coffee stirrers, toothpicks, and popsicle sticks, to take advantage of the growing food industry and green consumerism. A need for value addition through proactively investing in product sterilization and packaging was also emphasized. Fostering collaboration, better networks, wider market reach, formation of strategic alliances among players, and engaging in e-marketing activities were given importance. Business registration was also recommended, bringing them closer to support programs and increasing recognition in the national industry. On the other hand, strategic recommendations for bamboo furniture and handicraft manufacturers involve innovating new and unique designs that are harder to imitate, utilizing the benefits of the Barangay Micro Business Enterprise (BMBE) Act of 2002, and short and long-term operational expansion, catering to the growing demand from domestic markets. To enhance their operational efficiency and to increase their market reach, it was recommended that they diversify their distribution channels, access the shared-service facility in Maragondon, and implement better inventory and forecast management.
The national government, with the support agencies constituting the Philippine Bamboo Industry Development Council (PBIDC) and Local Government Units (LGU), were recommended to invest in the construction of cemented roads near bamboo stands, systematic data and information management, and the establishment of “Bagsakan” centers for bamboo skewer manufacturers. Spearheading governmental interventions, the Department of Trade and Industry and the Department of Science and Technology – Forest Product Research and Development Institute (DOST-FPRDI) were recommended to intensify training and seminars that would leverage and improve the important EO dimensions among the players. Lastly, future researchers are suggested to expand the study to region 4A, which has considerably larger numbers of bamboo furniture and handicraft manufacturers. They were also recommended to delve into bamboo pole farmers and traders and explore consumer behavior and perceptions of bamboo products, aiming for a more comprehensive grasp of the industry.
Language
English
LC Subject
Bamboo-pulp industry, Business enterprises
Location
UPLB College of Economics and Management (CEM)
Call Number
LG 993 2024 M17 D44
Recommended Citation
Decio, John Ave T., "An Enterprise Study of Bamboo Processing Enterprises in Selected Areas in Cavite Province" (2024). Undergraduate Theses. 11518.
https://www.ukdr.uplb.edu.ph/etd-undergrad/11518
Document Type
Thesis
Notes
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