Feasibility study of establishing an integrated cacao plantation and cocoa-processing plant in Brgy. Paiisa, Tiaong, Quezon

Date

3-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Normito R. Zapata

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Abstract

Cacao, Theobroma cacao, is an equatorial crop thriving at areas in the equator. It has three varieties namely: Criollo, Forastero, and Trinitario. It can be processed into cocoa powder, cocoa butter, and cocoa liquor, all can be used as flavoring for cakes and beverages. Cocoa butter can be used in cosmetics. The cacao industry has been decreasing in the past few years, but the government is now supporting the industry, regarding cacao as a High Value Crop. The SUCCESS Alliance, which is funded by the USDA, encourages farmers to go into cacao farming by training them and providing them resources and assistance. It seeks to collaborate to the Department of Agriculture in providing the necessary resources. The problems identified in the industry are inadequacy in technical knowledge of farmers, inadequate sources of planting materials, high cost of inputs, and poor market development, fragmented linkages, poor coordination of the market chain and limited market access for farmers. This study aims to know if establishing a cocoa-processing plant integrated with cacao plantation will be feasible. It has the following objectives: (1) to present the Cocoa-processing plant and its planned area of operation; (2) to determine the market, production, organizational and financial viability of operating the business in Tiaong, Quezon; (3) to recommend specific courses of action based on the findings of the study. Primary data in this study were gathered through market survey in Tiaong, Quezon, interview with Mr. Dennis Bihis, project manager in the Department of Agriculture – Quezon Agricultural Experiment Station and with Mr. Fred Pascual, , an agricultural technician in cultural management under UPLB Crop Science Cluster Physiology Division, and through storecheck. These were done to know the technicalities about cacao plantation and cocoa processing. Secondary data were from journals and internet sites. The project will be owned by Mr. Willie G. Esquivel, who is the father of the author. It will be located at Brgy. Paiisa, Tiaong, Quezon, and its target market are the bakeries that produce their own bread and cakes. A market survey was conducted to know the volume, the frequency of buying, and the form of cocoa (powder, liquor, or butter) they buy. They were also asked about their current supplier and about the factors that would make them shift to other suppliers. There were 35 respondents, who came from Tiaong and Candelaria, Quezon, and a few from San Pablo City, Laguna. Six hundred cacao seedlings, which will be acquired from DA-QAES will be intercropped with 1,900 tissue-cultured bananas, which will be acquired from UPLB. The planting involves the following activity: clearing-out, land preparation, laying-out, hauling, fertilizer application and planting of seedlings. Cacao beans undergo different processes: harvesting, cacao pod breaking, fermentation, drying, sorting out, roasting, winnowing, grinding, distillation and packaging. Cocoa powder and cocoa butter are to be produced. Production capacity of the business was projected. Market demand was also computed. Income statements and statement of cash flow were created. It was subjected to three scenarios. On the base scenario, it is found out that the project is feasible. However, it is very risky. It is not feasible in Scenario I, where yield of cacao decreased be 20 percent. Similarly, it is not feasible in Scenario II, where costs increased by 3.2 percent due to inflation. Same is true for the third scenario, where prices of cocoa powder and cocoa butter are reduced to Php 40 and Php 280, respectively. The study recommends the following: (1) monitor sanitation effectively to mitigate the occurrence of pests and diseases; (2) use cheaper alternatives like organic fertilizer should be used and; (3) do not increase prices for these are already price competitive.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 E87

Document Type

Thesis

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