Status, Problems and Prospects of Panutsa Enterprises in Selected Municipalities of Batangas

Date

4-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jeanette B, Madamba

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

The study aimed to present the structure, conduct and performance of panutsa industry in Batangas, determine the key success factors of the panutsa industry, pinpoint the problems, weaknesses and gaps of the panutsa industry, identify the investment opportunities and development entry points in the industry for entrepreneurs and government or non-government organizations, respectively; and formulate strategic directions and recommendations for competitiveness and sustainability of the industry.

It aimed to present the current status of the panutsa industry in selected municipalities of Batangas by using Porter’s Five Porters framework which tackled the threats of entry, intensity of competition, presence of substitute, bargaining power of suppliers and buyers of the industry. Cost and Benefit Analysis was used in order to properly evaluate the profitability of the industry. Supply-Demand Analysis was used to assess the production volume that industry players can supply to the current demand for the products. SWOT Analysis was also used in order to evaluate the external and internal factors that affected the players in the industry and the industry as a whole.

The study only covered selected municipalities in Batangas, these were Rosario, San Juan and Taal Batangas. The three municipalities were chosen by reference of the Provincial Department of Trade and Industry of Batangas. These municipalities were considered as the top producing municipalities of panutsa in the province.

Producers were commonly located at Taal, Rosario and San Juan. The first panutsa was made in Seiran, Taal consequently most of the producers were concentrated in this area. Raw materials were procured in the local public market or in Divisoria by producers and were sold to deployers, stalls, and vendors.

The socio-economic factors of the respondents that were evaluated in this study include age, educational attainment, civil status, gender, nature of business, nature of operation, and length of existence in the industry.

The functional aspects of the business were discussed and evaluated in this study. There are three types of panutsa namely the wet, dry and “semi” type. The producer both employs delivery and pick-up as their mode of sale. Pricing scheme of going rate was widely used in the industry. Most of the producer use consignment and cash basis as their term of sale. There was observed seasonality on sales. Christmas and summer seasons were the period of peak months and June to September were the lean months. The distribution channels that are used in the industry are deployers, stalls, pasalubong shops, and individual vendors.

The production plant does not require a large area. The ideal area was about 80-150 m2 . Production volume of each producer can be stratified to those who can produce 1 sack/week, 2-5sacks/week,6-10sacks/week and 11-16sacks/week. Doubling of sales during peak months was observed and a decline in sales during lean months. Basis of supplier selection are proximity, regular supply, low price, better quality, credit, and trust. Only two of the respondents tried to modify the product. Process of making panutsa are mixing, molding, cooling, packaging, cooling and putting it in sacks or boxes. Only 7 of the producers claim that they implement sanitary procedures but none of them were observed to be doing it in the actual production.

The production of panutsa has a very simple organizational structure which only involves the owner and the workers. The average number of workers in an enterprise is about four to six individuals. Most of the producer do not have qualifications for the workers that they hire. Most of the workers were able to get high school education.

The majority of the producers source their initial capital investment through equity. Most of them do not intend to increase capitalization in the near future.

There is a considerably high threat of entry in the industry due to low capital requirement. Low intensity of rivalry was observed because each of the producers have their own specific market to cater to. Threats from substitute is high due to the availability of many other pasalubong products. Supplier bargaining power is high due to the importance of the raw materials in the production.

Strengths of the industry are expertise of workers, good relationship to buyers, established name for panutsa production and low labor cost. Weaknesses are poor sanitation practices, limited sources of financing, little support from the government and other institutions, absence of association within the industry, poor grading and classification standards and no bookkeeping activities. Opportunities are as follows presence of newly but what organization to support the industry, unchanging Filipino traditions, and increasing Filipino migrants. Threats are bad publicity, increasing price of raw materials, changing consumer preference, threats in the Philippine soil.

Supply/demand analysis of panutsa in Batangas revealed that producers can supply an estimate of 106 sacks/week and buyers demand 103 sacks/week. Factors affecting supply and demand are price of inputs, seasonality of demand and environmental conditions. Cost and return analysis shows that the industry is profitable.

The key industry players are Beth’s Special Sweet Peanuts and RJ Special Sweet Peanut. Both of these producers are located in Seiran, Taal, Batangas and are registered with the local municipality. These players have a great impact on the industry by obtaining the highest market share and being the local financier in the industry.

The main key success factors that have been identified in the study are excellent product quality, Strong buyer ties, good owner worker relationship, effective payment and collection scheme. These factors are found to be critical to prosper in the industry. Problems within the industry are high cost of raw materials, inefficient collection of payments, lack of government support, poor sanitation and working conditions and lack of product development.

It was concluded that industry was bombarded with external and internal factors that made it unattractive for investors. Even though this is the case, enterprises are not willing to leave the said industry for several reasons like being attached to the industry as being part of their culture. It is therefore recommended that the government and other institutions to support the industry in order to safeguard its growth and existence.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 G33

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

Link to Full Text

Share

COinS