Davao banana chip exporter feels crunch

DAVAO CITY, Philippines — An exporter of banana chips has cut down its plant capacity by half as it anticipates a rough 2009 as a result of slowing global demand. See International Food Manufacturing Corp.’s (See International) plants in Davao City and Mati City now operate at half their usual 10-ton daily production capacity after noticing a slide in order from the US, Europe, Asia and the Middle East by as much as 30%. "Even the booked orders have stopped coming as the buyers preferred to order on a requirement basis," See International President Ruben L. See said in an interview. He noted that clients used to place their orders three months ahead. Prices of banana chips in world markets have also gone down to 92 to 95 cents per kilo from $1.20 in the first half, resulting in lower profits for food processors. See International produces banana chips, dried fruit cocktail, coconut chips, dried papaya and dried mango under the Gold Chips brand. Set up in 1996, it started exporting in 2000 and has become one of the leading exporters of banana chips in the country. Mr. See said local farmers from whom they get the fruits have had to accept a lower price of P3.50 to P4 per kilo for the fresh saba variety, or P1.60 cheaper than at the start of the year. "Everybody now is tightening his belt," he said, adding that while the company did not see the need to fire workers, they might have to sacrifice their bonuses this Christmas. "Next year, we expect our margin of profit to drop even further," Mr. See said. The owner also appealed to government financial institutions and private banks to be a little more flexible when their loans mature. "This is the best time for the government and banks to help us." — Joel B. Escovilla, BusinessWorld