Feasibility Study of Establishing a Market Hub for Agripreneurs in Los Baños, Laguna

Date

5-2025

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Juan Paulino S. Trespalacio, Junior

Committee Member

Rei Chino C. Pua, Rolando G. Allam, Jr., Dia Noelle F. Velasco

Request Access

For non-UP researchers, requests for access to this material may be directed to the CEM Library at cemlibrary.uplb@up.edu.ph or to the UKDR administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

In recent years, agripreneurship has emerged as a growing interest among local micro-,small, medium enterprises in the Philippines. Despite their enthusiasm and creativity, many agripreneurs face significant challenges in accessing stable and formal market platforms to sell their products. Current opportunities such as weekend markets and occasional bazaars offer only temporary exposure, while institutional outlets often require permits and certifications that are inaccessible to student-level producers. Given these constraints, this study explores the feasibility of establishing a market hub that would serve as a consistent, start-up friendly venue for marketing and distributing their agri-based products. The analysis encompasses the market, operational, organizational, and financial aspects of the proposed project.

Primary data were obtained from 17 agripreneur college students from UPLB taking an undergraduate degree of BS in Agribusiness Management and Entrepreneurship Major in Entrepreneurship, through a pre-tested survey questionnaire. The Factor Rating Method was used to determine the optimal location for the market hub. Additionally, descriptive analysis was conducted to evaluate the market, operational, and organizational aspects of the project. Lastly, the capital budgeting technique and sensitivity analysis was used in assessing the financial viability of the market hub.

Through the location analysis using Factor Rating Method, it was determined that Baker Hall Court is the most accessible and strategic location to host the hub among the six alternatives including the UPLB Community Hub, Pili Drive, Elbi Square, Centtro Mall, and Raymundo. This location is within the reach of both the locators and consumers, and offers high foot traffic, contributing to the potential sales of the market hub. To proceed with using the Baker Hall Court, the cooperative has to bid the location in the Business Affairs Office. The bidding process for long-term lease starts by submitting a proposal to lease addressed to the Chancellor followed by the submission of endorsement of Terms of Reference (TOR) and bidding documents, including business profile and proposal, DTI/SEC and BIR registration, Barangay/Mayor’s Permit, Police Clearance, and latest Income Tax Return and Financial Statement submitted to BIR / SEC. The submitted proposal will be evaluated by several offices concerned, specifically the verification of use of land to be leased will be done by the Office of the Vice Chancellor for Planning and Development (OVCPD), while the clarification/setting,  recommendation and approval of fees and other terms and conditions will be facilitated by the UPLB BAO, Fiscal Policies and Operations Committee (FPOC), and other unit/s concerned. This whole application process usually takes a month for the applicant. Once the proposal is accepted, advertisements of available space for lease will be posted at the BAO and UPLB website and other institutions that could be a potential participant will also be invited. UPLB BAO sets a deadline for the submission of a bidding form which usually last for a week. Lastly, the winning bidder shall be given a Notice of Award and shall coordinate with BAO for payment of rental fees and processing of contract, and PPMSO for utilities. The rental fees are to be paid online via Landbank online banking.

The market analysis confirms a strong interest among agripreneurs to participate in the project, and even to become a member of the cooperative, relying on the benefits they could gain for their active participation. Moreover, it was determined that the potential consumers, which are the locals and tourists of Los Baños, Laguna, are highly interested to patronage the products in the market hub. To meet the growing consumer demand, the market hub will serve as a rental space for agripreneurs offering shelves with different sizes and rates, based on the prevailing rental fees in the market set by the existing market outlets that offer the same services, available for rent that will feature products manufactured by agripreneurs from the province, sold with competitive prices. These products will be placed in a 250 sqm store located in Baker Hall Court, operating for 12 hours every Mondays to Saturdays. There will be a total of thirteen (13) sections designated for all the products that are divided for food and non-food products. In total, there will be a total of twenty (20) different shelves with different sizes and three (3) display chillers allotted for specific products that will be available for rent. There would also be a storage area with 4 storage shelves that will be available for rent.

The organizational evaluation revealed that the Laguna Prime Multipurpose Cooperative will provide the primary support for the establishment and management of the market hub as its owner. This overall management of the market hub will fall under the Business Development & Investment Committee of the cooperative, but to oversee the daily operations, there will be one general manager and a total of four (4) employees with their respective responsibilities. Lastly, financial analysis revealed that the project is currently infeasible. In the Base Scenario, the net present value (NPV) is calculated at PHP -10,023,340.10 and a BCR < 1 which is 0.9818 indicating that the business is not feasible. However, Scenario 1 presents a feasible result for the proposed project with an NPV of PHP 1,908,047.50, IRR that is 12%, and an expected payback period of 6.2791 indicated a quicker recoupment of initial investment. Scenario 1 also resulted with a benefit-cost ratio of 1.4035 further suggesting a feasible project.

Scenario 2 presents a less optimistic but still better picture compared to Scenario 3 and 4, it has an NPV of -564,579.004 and IRR of 5%, with a prolonged payback period of 7.969 years. It has a benefit-cost ratio of 1.2955 that also presents a positive case as the BCR > 1. Scenario 2 presents a case that may warrant further consideration. While Scenario 3 shows an infeasible result, with an NPV of PHP -4,061,076.04, IRR of -7%, payback period of 15.844, and a BCR of 1.184, implying a more prolonged duration for recovering initial investment, potentially increasing the project’s risk, and decreasing its attractiveness. Lastly, Scenario 4 yielded an NPV of PHP-8,471,503.58 with a BCR of 0.9595.

Given these factors, it can be concluded that establishing a market hub for agripreneurs in Los Baños, Laguna is currently not feasible. Despite the potential benefits the project could bring, several significant concerns need to be addressed before pursuing this project. The identified concerns are not profitable business model, competition in the proposed location, hesitancy among agripreneurs due to fee concerns and internal competition, operational dependence on the participation of agripreneurs thereby affecting the potential sales, and financial challenges tied to significant initial investment and high operating costs, and the variability of locator commitment.

To mitigate these challenges and make the proposed project feasible, the study recommends revenue stream diversification through value-added service offerings. The cooperative can utilize the 80% of the hub, that is 175 sqm, as rental spaces for other small businesses, 20% of it will be allocated for rental shelves, that will comprise of 5 big shelves, 3 small shelves, and 1 display chiller, and storage rental should also be utilized. This could help them maximize the capacity of the market hub and have the opportunity to have more sources of income in the daily operations of the business. This can also help them accommodate different types of agripreneurs looking for market outlets. To help fund the initial investment and strengthen the credibility of the business to attract more locators, it is recommended for the cooperative to form strategic partnerships with LGUs, universities, and other government agencies. To reduce the operating costs it is also recommended for the cooperative to consider utilizing the current existing establishment of the cooperative for the market hub. Lastly, To control the potential internal competition, the management should develop locator screening and rotation policies.

Language

English

LC Subject

Entrepreneurship--Economic aspects, Industries—Social aspects, Small business marketing

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2025 M17 C39

Notes

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Document Type

Thesis

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