Status, Problems, and Prospects of Ornamental Plant Enterprises in Naga City, Camarines Sur, Philippines

Date

6-2023

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Maria Noriza Q. Herrera

Committee Member

Gemma U. Reyes, Fitz D. Jimenez, Mar B. Cruz

Abstract

The study Status, Problems, and Prospects of Ornamental Plant Enterprises in Naga City, Camarines Sur, Philippines, described the status of the industry in the city. Specifically, this study focused on providing contemporary insight and contextual industry data to one of the well-known areas of ornamental plant production and trade in the Bicol region that is Naga City; known as the “Little Baguio”. The overall framework used in this study is the Porter’s Five Forces framework which assessed the competition among growers and traders.

Generally, the study aimed to analyze the status, problems, and prospects of the ornamental plant industry in Naga City, Camarines Sur. Specifically, it aimed to present the profile, structure, and performance of industry players in the locale through a synthesis of field surveys and key informant interviews; assess its current problems and weaknesses through a SWOT analysis; identify the common key success factors in the industry; and came up with recommendations to maximize the opportunities which were seen in the PESTEL and in the Cost and Returns Analyses. Dominant Economic traits of the industry were also identified to assess the overall dynamics which shape the industry.

The literature showed an overview and potential of the whole ornamental plant industry on a local and globalized context. Global demand for ornamentals is growing and in the ASEAN Region, Thailand and Malaysia had grown their industries significantly in recent time while the Philippines continued to lag behind. This also served as a benchmark of the Philippines’ capacities. In the Bicol region, it was found that growing ornamentals has existed since the 1970s to 1980s and the region had contributed to the country’s ornamental production as seen by records in the late 2000s.

This study utilized the qualitative research approach with an emphasis on exploratory and descriptive research which provided a contemporary insight and contextual data on Naga City’s ornamental plant industry and related enterprises. This data is critical as the Philippine Government is set to boost the country’s ornamental production in the coming years.

Ornamental plant enterprises in Naga were all sole proprietorships who were retailers, wholesalers, or a mix of both. To enter the ornamental plant industry business is easy due to the low capital requirements, absence of regulatory barriers, and the highly profitable nature of the industry. This attracted players of all ages and experience to pursue an enterprise in ornamentals. Moreover, the study revealed that many of the current industry participants are second-generation business owners who decided to continue their business due to personal reasons.

Based on production and marketing practices, key players are able to sell plants within and outside of Naga City but traders often have a competitive advantage over the growers to reach their customers as their business locations are generally more strategic in nature. This is due to their ability to make regular contacts with their target markets. However, their grower counterparts are more efficient in production as they relied more on self-propagation rather than the procurement of plants from outside of Naga City which allowed them to incur savings. Growers also mentioned that they sold viable planting materials to other local government units who have started their local production of ornamentals. In terms of acquiring inputs, growers sourced fertilizers and pesticides which contributed to the bulk of their costs while traders’ costs were more on plant procurement, rent, and logistical costs.

The problems which were identified in the study include: low control on price and forecasting among key players; reliance on seasonal demand; slow growth of the industry due to poor support; absence or lack of recordkeeping, innovation and differentiation; and increasing cost of inputs.

Based on the author’s analyses, there are several key weaknesses in the ornamental plant industry of Naga City, Camarines Sur: lack of proper cold storage equipment and facilities; reliance on experience as a technical knowledge; seasonality of demand; inability to set & control prices; limited support from government agencies and the local government unit, and limited product offerings in the market. The cost and returns analysis also showed that growers can profit more consistently than traders. However, the profit margins of traders are higher than those of growers especially if they are able to generate sales greater than P25,000 per month.

Key players still see the industry as profitable and would continue to pursue such businesses. The City Agriculturist Office expressed a positive outlook for the industry as they believe it will continue to grow in the coming years although at a slow rate. Some of the key strengths of the industry players: the city’s reputation for growing ornamentals especially cut flowers; strategic location of key industry players; ease of entering the market; salability all-year round; high profit margins under right practices; accessible labor, and the existence of organizations among industry players.

General recommendations were presented by the author after the study. Some of these recommendations include: the introduction and practice of record-keeping; to exercise product differentiation, and business registration.

Specific recommendations were given to traders, growers, and the local government unit. Some of the recommendations for traders include local sourcing of ornamentals & training for the improvement of employees. Growers were also advised to: implement more promotional schemes, and explore new production techniques. Lastly, the LGU was recommended to: coordinate with local universities to extend technical assistance to growers, benchmark with other lowland ornamental plant=producing areas in the Philippines and ASEAN neigbors, and the extension of financial assistance to traders.

In summary, the local ornamental plant industry of Naga City is a healthy position for growth. Through the help and action of the government agencies like the Department of Agriculture and local government units, improvements across the industry will boost the growth of key players. That is why key industry players must work together with the support subsector, especially the LGU, to capitalize on the growing market for ornamentals not just in the local context but on a global level as well.

Language

English

LC Subject

Business enterprises--Philippines, Ornamental plant industry

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2023 M17 R34

Notes

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Document Type

Thesis

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