Cashing in on chips

The farmers’ cooperative in the North Cotabato province took a risk and a gamble by undertaking entrepreneurship with a conscience—and is now reaping its rewards.

The Magpet Agro Industrial Cooperative (Magirco ) was organized in 1989 by Eufronio Zamoras and Jesus Kionisala.

They put up the cooperative as a way of consolidating the local farmers’ products and negotiating with buyers for volume-based incentives and better prices. Magirco started by selling raw rubber clumps, then went into copra trading, and later became a provincial supplier of cooking oil to a major cooking oil manufacturer. In 2009, it entered another arena: the production of export-quality “first-fry” banana chips. These chips are sold in bulk to exporters, who in turn process them for “second frying” and sweetening before shipping them to foreign markets.

Today, Magirco has 342 members and an asset base of Php100 million. It can also rightfully claim to have helped raise the standard of living of thousands of farmers and workers in North Cotabato in the course of its 25 years of operation.

Magirco General Manager Emmanuel “Bobot” Zamoras, son of co-founder Eufronio, recently steered the cooperative toward the use of more earth-friendly and socially-conscious practices which would make his father proud.  The cooperative now buys up to 40 metric tons of bananas of the cardava varieties daily from the local community. The local communities include some 1,600 indigenous Manobo who tend to some 500 hectares of ancestral lands. Magirco also provides local employment, primarily by hiring banana peelers and paying them rates from Php100 up to Php600 a day. Banana peel accounts for more than half the weight of each fruit and Magirco produces over 24,000 kilos of banana peel daily. Instead of treating it as waste, however, the cooperative returns it to its suppliers for use as organic fertilizer for their banana farms.

Farmers earn extra income from Magirco, which buys their palay husk to use as fuel for its furnace. The carbonized husk, like the banana peel, is not treated as waste but is given free to outlying communities for their fertilizer needs. The mills’ furnace itself is an interesting innovation using a conveyor system fashioned from recycled jerry cans. Magirco members also supply the copra that is converted to cooking oil, which is used to fry the chips.

Magirco and PEF enjoy a long-standing and productive relationship. The cooperative earlier availed of PEF loans which it has since fully paid. Currently, PEF maintains a Php3-million credit line for Magirco, helping the latter raise its working capital. It has also given the cooperative a grant for a study on plant improvements including carbon emissions. This has enabled Magirco to run a smoother operation and set a premium price for produce sold by its members.

Bobot Zamoras believes that much still needs to be done. He says the Magirco factory is not running at full capacity.

“We can process 40,000 kilos daily, but now we are only doing 10,000 to 15,000 kilos.” Zamoras is also exploring new potential markets for Magirco , specifically the production of second-fry or sweetened banana chip for export.

Banana chips from the Philippines are exported to countries in Asia, Europe, and North and South America.

According to the Department of Trade and Industry, the export value for banana chips has been increasing by 15 percent every year since 2009. The sector reported revenues of USD36 million in 2011. The country only has 35 banana chip processors so there is room in the export market for a company like Magirco, Zamoras believes.

Zamoras dreams of Magirco becoming a world-class export organization run by a group of socially conscientious individuals, and a responsible business that helps raise the living standards of the local communities around it. PEF is proud to be its partner.