Small Livelihood Project Outline

Title BUTANSAPA COCO COIR PROCESSING PROJECT

Location Brgy. Butansapa, Municipality of Mogpog, Marinduque
Components Postharvest : Gathering and stockpiling of coconut
husks (copra making waste);
Processing : Extraction of coir fiber suitable for twining
which produces peat another useful waste
product;
Input Provision: Pertains to the hanks- the end product
at the SLP level which serves as the primary
input for handicraft and geo net
production;
Marketing/Trading: The output is primarily intended to
support the establishment of local production
of geo-engineering materials within the
island (an start-up industry) hence, a supply
agreement would suffice as a marketing up-
link. However, the potentials of the coco
twine hanks as handicraft raw materials
provides a marketing opportunity that would
also on be explored.
Products Product/s: Coco Coir Twine in Hanks
and /or Service/s: n.a.
services Annual capacity: 912,000 hanks/annum
Seasonality: n.a.
Stage of
Start-up; Expansion; Upgrading
enterprise/s
Name of the
BUTANSAPA MULTI-PURPOSE COOPERATIVE
Proponent
(CDA Reg. #9520-044001889 dtd. 12 Nov. 2009)
Group
Contact Person MS. MA. MARILYN BUAG
and Secretary
Designation
Address Brgy. Butansapa, Mogpog, Marinduque
Contact Landline: none
Numbers Fax: none
Mobile: 0929 251 1588
E-mail: none
Business ( Cooperative Development Authority; Year Registered:
Registration 11/05/2002
Securities and Exchange Commission; Year Registered:
__________
Department of Labor & Employment; Year Registered:
__________
Enterprise Local Fiber/Handicraft Manufacturers: Balita MPC; Tanikala
Clusters or MPC
other Start-up: Geo Net Production Tanikala MPC
participating
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 1
groups
Producers/Sup Primary coconut husk suppliers are coconut farms within
pliers the Mun. of Mogpog, Marinduque.
Target Buyers/ Supply Agreement with the Tanikala MPC. MOA with the
Instruments Provincial Agriculture Office and the MAOs of Torrijos and
Sta. Cruz.

BUTANSAPA COCO COIR PROCESSING PROJECT

Table 1. Investment Capital Requirement
FUND SOURCES
Component Proponent
Amoun
s / Line Unit Group
t, PhP LP GOP PLGU
Items In-
Cash
Kind
Land
Processing 500 110,00 100,0
Center sq.m. 0 - - - - 00
Small Works
Storage/Shed 60
300,000 180,000 60,000 60,000
Building sq.m. - -
Multi-Purpose 128
57,600 34,560 11,520 11,520
Pavement sq.m. - -
24
Soaking Pond 26,400 15,840 5,280 5,280
sq.m. - -
Vehicle
Hauling &
Decorticator
1 150,000 90,000 30,000 30,000
Service - -
Vehicle
Equipment
Mobile
Decorticating 1 400,000 240,000 80,000 80,000
- -
Machine
Twisting/
Twining 25 37,500 22,500 7,500 7,500
- -
Devise
Weighing
1 4,800 2,880 960 960
Scale - -
Spade 4 1,200 720 240 240

Paleta 10 3,000 1,800 600 600

- -
Working Table 2 5,000 3,000 1,000 1,000 - -
10,50
Filing Cabinet 1 10,500 - - - -
0
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
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Working
1
Capital 11,00 165,82
mont 176,832 - - -
(Labor & 8 4
h
Supplies)
3
Raw
mont 34,560 - - - - 34,560
Materials
hs
1,317,3 591,30 197,10 197,10 21,50 310,3
TOTAL
92 0 0 0 8 84

BUTANSAPA COCO COIR PROCESSING PROJECT

Table 2. Cost Sharing
ENTERPRISE SMALL WORKS TOTAL
Cost Cost AMOUNT
FUND SOURCE Amoun
Amount Shari Shari OF
t
ng ng BUSINESS
a) World Bank 591,300
591,300.00 60%
Loan Proceeds .00
b) Government
of the 197,100 197,100.
Philippines - 20%
.00 00
Department of
Agriculture
c) Provincial
Government 197,100.0
197,100.00 20%
Unit of 0
Marinduque
985,500.0 985,892.0
TOTAL 100%
0 0

d) Proponent 331,892.0
331,892.00 25% - -
Group 0
TOTAL WITH
1,317,392. 1,317,392.
PROPONENT
00 00
GROUP

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

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EXECUTIVE SUMMARY

Coco coir processing is an established livelihood undertaking which the

Proponent Group is aspiring to implement for income generation. As a start-
up enterprise, the Butansapa Multi-Purpose Cooperative (PG) will be
processing coconut husk into coir twines (hanks) which are highly in demand
for geo-engineering applications and for handicraft production as well. The
proposed undertaking requires rudimentary skills and simple implements that
the PG believe they can put to good use to earn extra income while cleaning
the local waterways.

Butansapa Multi-Purpose Cooperative is an active organization of 42

persons, 32 of which are women and with 37 members doing coconut
farming. Collectively, its members has 54.1 hectares of coco farm land which
constitute a very negligible area planted to coconut within the Municipality of
Mogpog. The need to source out additional income opportunities is
commonly realized that in 2007, they embarked on a micro-financing project
to assist each other. However, the relending operation is always being
compromised as calamities, such as typhoons, that adversely deter coconut
farm production output hence, repayments by members on their accounts
are delayed. To address this situation, the PG intends to complement their
relending activity with a production base that would enhance the economic
survival of their members.

Coconut husk is a common copra-making waste product which the PG

is now intending to utilize to secure regular income. With a mobile
decorticating machine that can process coconut husks at established copra
making sites, securing supplies for coir twining is easier. The 25 units of
twining/twisting devises to be manned by the women cooperative members
shall produce the hanks in their respective homes. Completed hanks shall
be temporarily be held at the storage building that will also serve as garage
for the service tricycle and the mobile decorticating machine. This income
generating undertaking being proposed will be managed by the members of
the cooperative. Its members are prioritized when it comes to raw materials
sourcing (regardless of where they source the husk they supply to the
enterprise); coir twiners, labourers and even structure construction workers
for as long as they have the skill and capability.

Under a medium term Supply Agreement, the initial output (hanks) of

the project shall be sold to Tanikala sa Pagkakaisa Multi-Purpose Cooperative
in support for their geo net and handicraft production activities.

The proposed livelihood enhancement project is projected to generate

an annual income of PhP780,206.71 for a 59.22% ROI. More importantly, the
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 4
processes of production will generate income opportunities as follows:
PhP138,240.00 for husks purchases; PhP1,989,888.00 for production wages
and an additional PhP228,000.00 for sales and operating payroll.

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 5
I. PROJECT PROFILE

The proposed livelihood enhancement project is intended to secure for

the members of the proponent group a regular and steady source of income.
Presently, their coconut farming activities, being marginal due to very small
land area (54.1 has.) under their control, do not meet their economic needs.
The move to undertake relending activities within the cooperative is deemed
a stop-gap measure that for most of the members, while giving temporary
reprieve, are later proving to be additional burdens as interests and service
fees are mandatory to sustain the financing flow. Copra, as their farm
produce is susceptible to damages by typhoons. It does not require for high
winds to topple down coconut trees, winds normally associated with typhoon
(like Lando) shakes up the tall coconut trees enough to deplete fruiting for
the next half a year. Without copra, repayment to coop relending is always
at risk. Processing the copra-making waste (husks) into economic product is
deemed the most sensible way of improving the livelihood of the marginal
coconut farmers. The proposed project will be providing them with regular,
more reliable income.

A. The Proponent

Butansapa Multi-Purpose Cooperative is a group of marginal coconut

farm owners and workers that was registered under the Cooperative
Development Authority on 12 November 2009 with Reg. Cert. No. 9520-
04001889. As a multi-purpose cooperative, their economic enterprise was
principally relending. The Cooperative has 32 female and 10 male
members. The group is classified as active coop by CDA-Marinduque.

The Cooperative is based in Brgy. Butansapa which is located along the

Manggamnan River that traverses a wide swatch of coconut lands within the
Municipality of Mogpog and part of the Municipality of Sta. Cruz. The river is
a critical factor in the proponent group selection as this would provide a
cheap conveyance of raw materials. More than their strategic location, the
Cooperative is willing to put up counterpart financing for the project, secure
land for the required structures and manifested their willingness to be trained
on the processes of the proposed project.

B. Project Objectives

Generally, the project aims to provide the members of Butansapa Multi-

Purpose Cooperative with a livelihood project that ensures material
improvement of their economic status.
Particularly, the project is intended to:
1. Secure a regular and secure source of income thru productive common
endeavor:
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 6
 a. Share from annual distributable net income (if shared equally):
PhP13,003.45/member
b. Monthly husks payment share (if members has to provide the
requirements, from own farm lands or gathered elsewhere):
PhP 3,291.43/member
c. Monthly Production labor (if shared equally):
PhP47,378.29/member
d. Monthly Operating Wages (5 persons)
PhP3,800.00/month
2. Diversify their livelihood avenues coherent with their normal
agricultural practices:
No need to quantify since this objective simply means that instead of
relying on income from copra-making alone, the beneficiaries will have
the
facility or means for additional income without adversely changing
their farm works
3. Enhance the operation of their existing relending program by
ensuring their means of loan installment repayments. This can hardly
be quantified as the borrowing levels of the members vary and their
periodic repayment pattern is oftentimes irregular depending on the
availability and pricing of copra. The average annual family income of
the members is PhP6,497. This values are not even enough to cover
daily needs hence, repayment of borrowed funds are compromised. On
this premise and since the relent amount per member is very limited,
even their individual dividend share alone may be enough to cover
their repayment, although possible production labor share could
provide the extra repayment margin.
4. Help in environment clean-up as a critical aspect of disaster mitigation
and provincial tourism enhancement. It has been repeatedly
experienced that coconut husks not used in copra-making are
environmental eyesores at the beaches and flood inducers on the
waterways as they tend to clog such waterways. The project will take
away about 76,800 waste coconut husks/month from the Manggamnan
River and from the shorefronts of Boac and Mogpog, that will be a real
clean-up.
5. Provide deodorizing medium for local swine breeding, growing and
transport. Since coco peat has high absorption capacity which needs to
be neutralized before being used as soil enhancer, using the peat first
as a deodorizing medium is ideal. (NOTE: 1 sack of Coco Peat weighs
approximately twenty (20) kilograms)
a. As a substrate for rice hull/pigpens: (reference size @ 2.0m x
2.0m)
(2.00m x 2.00m x 0.30 thk.) = 1.20 cu.m or 1,200 liters (say, 20-25
sacks)
b. As bedding for transport of livestock: (reference truck bed @
2.40m x 4.00m)

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

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 (2.40m x 4.00m x 0.20m) = 1.92 cu.m. or 1,920 ltrs/shipment (say
30-35 sacks)
c. As soil enhancer, coco peat volume for incorporation to production
fields will depend on the recommendation(s) of the responsible
Department of Agriculture official(s) who will also be the responsible
person to facilitate the necessary funding for the rehabilitation of
local production fields, hence the determination of the periodic coco
peat volume requirements.

II. MARKET STUDY

A. Product Description

1. Coco Fiber/Coir

The fiber extracted through decortication from the fibrous outer

covering of mature coconut fruit. The coir or coco fiber may be processed
into: geo-nets, upholstery cushion, mattress fiber for filtration pads,
insulation materials, mattresses, rugs, plant liners, handicraft media or as
caulking materials for boats.

Typical Properties of Coir Fiber

(Source: Utilization of Coconut Husk Based Materials by: Arturo A. Pablo,

Orlando R. Pulido, Vicente C. Mallari, Jr., and Rico J. Cabangon)

Physical Properties

Parameter Quality Characteristics

Color Brown
Fiber Length, mm 50-250
Fiber Diameter, mm 0.1-0.4
Bulk Density, kg /m3 145-280
Ultimate Tensile Strength, N / mm2 100-130
Modulus of Elasticity, N / mm2 19-26
Elongation of Break, % 10-26
Water Absorption, % 130-180

2. Coco Fiber Twine or Rope

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

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 Coco fiber twine/rope results from twisting, at low speed, of coco
fiber to produce a 100% biodegradable weaving material or rope at
approximately 4.00mm 5mm, packaged as hanks of eleven (11) LM
each. These ropes are weaved into mats to produce the geonets.
However, this semi-processed material can also be utilized for a host of
other handicraft products.

3. Coco Peat

A fiber extraction waste product (approx. 70% by weight of raw

coconut husk processed or decorticated) which can be used as soil
conditioner or substrate for vermicomposting. This decortication by-
product is said to have enormous economic potentials. (Intended to be
explored later). For the proposed project, this decortications waste shall
be sold as soil conditioner or deodorizing medium.

B. Target Market

The proposed project intends to supply coco fiber twine or rope (in 11-
meter Hanks) to geo-net manufacturer and/or handicraft producers within
Marinduque. As a start-up enterprise introducing a relatively new product in
the local economic environment, the initial output of the project is designed
to be limited and intended for local identified markets only.

Table 3. Target Markets

Mode
Delive Buying of
Client Address Volume
ry Price Payme
nt
912,000/y
COIR TWINES (Hanks)
r.
Brgy.
TANIKALA SA
Tugos, 19,000
PAGKAKAISA PhP3.50/ha Cash on
Boac, Hanks Weekly
MULTI-PURPOSE nk delivery
Marinduqu (100%)
COOP.
e,
193,400/y
COCO PEAT (Kilograms)
r.
Mun. MAO- 2,015 kg. Weekly PhP1.00/kgs Cash on
Agriculture Torrijos, (50%) . pick-up
Officer-Torrijos Marinduqu
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
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 e
Mun. MAO-Sta.
Agriculture Cruz, 2,014 kg. PhP1.00/kgs Cash on
Weekly
Officer-Sta. Marinduqu (50%) . pick-up
Cruz e

The identified client, Tanikala sa Pagkakaisa Multi-Purpose Cooperative

is the prioritized sole buyer for the coir hanks in support of the
development of the geo net manufacturing industry in Marinduque. The
client is also a consistent processor of abaca handcrafted products for which
coco coir twine would be integrated as a product component (slippers) or as
distinct handicraft item (door mats and similar products). The Supply
Agreement stipulates a price (PhP3.50/hank) that is about PhP0.20 lower
than what it would take should Tanikala process the coir themselves. The
weekly delivery and payment scheme is designed to minimize working
capital requirement and at the same time, keep to the minimum, the storage
of the finished hanks at the PG.

Coco peat (coir production by-product/waste) is to be distributed

between the PVO-Marinduque and the PAO-Marinduque. Previous discussions
has laid out the system of encouraging/enforcing Babuyang Walang Amoy
using coco peat in conjunction with rice hull as an enhancement for backyard
and medium-scale swine breeding and growing operations. More
importantly, as it impacts on local tourism, transport of live animals (swine or
large cattle) thru the RoRos (Marinduque to Dalahican: 3hrs-4hrs) shall be
required coco peat bedding to reduce, if not eliminate the disgusting smell
that permeates in the sea craft throughout the trip when live animals are
loaded onboard along with other cargoes. PVO-Marinduque could either
finance the purchase or direct raisers and/or live animal traders to do the
procurement.

The portion earmarked for the PAO-Marinduque is generally intended

for soil conditioning as would be packaged under the offices food production
enhancement program. As with the PVO, procurement can be directly be
done by the PAO or by their project beneficiaries. At any rate, the growing
local consciousness on the diverse applications or uses of coco peat is a very
positive market development that will tend to sustain the project viability.
The Provincial (or Municipal) Agriculture Office(r) can include in his Annual
Budget Proposal the cost requirements for the volume of coco peat he may
deem appropriate for funding as part of the offices development/work plan.
Under the BUB concept, the farming groups can require this assistance.
Nevertheless, nothing will stop the crop farmers/animal growers to make
their own purchases direct to the proponent group.

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 10
 The Provincial Veterinary Officer has signified his intention of requiring
the traders that transport live animals out of the island province to secure
the bedding materials as prerequisite for Animal Shipment Permit. (After 3-4
hours in the RoRo with the animals in transit, passengers retain the pungent
smell of animal odor upon disembarkation in Dalahican. This has negative
effect in tourism promotion.

Hanks are 11-meter long coco twines (which are accounted as semi-
processed units at the Tanikala processing center). For shipment purposes,
hanks are either bundled with plastic twines (preferably within the lifting
capacity of the twiner) or packed into sacks. Volume of each pack may vary
as this quantity will depend on the periodic (weekly) output of the twiner
from which the twines were collected. To combine weekly twining output of
different twiners will cause complications in identifying sources of
reject/defective hanks (either at PG product screening or at the processing
center by the Quality Control Offier).
Coco peat shall be in sacks @ approximately twenty (2) kilogam/sack

No distribution channel is required. Completed hanks will be delivered

weekly to Tanikala Multi-Purpose Cooperative at their Boac offices while coco
peat shall be picked up by the buyer at the decortication site.

III. OPERATIONAL PLAN

Butansapa Multi-Purpose Cooperative was organized in 2002 and

registered in Cooperative Development Authority (CDA) in the same year. It
has maintained its active category at CDA-Marinduque. The cooperative
has 42 members of which 88% are coconut farmers or coconut farm workers.
Presently, the cooperative is involved in copra processing and relending
(micro-finance).

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 11
 The proposed Coco Coir Processing project will be managed by the
cooperatives incumbent officers. The officers and members of the board of
directors of the cooperative will serve as the policy making body with general
membership as the highest governing body of the cooperative.

For its day-to-day operation, the enterprise shall be managed by Chris

Rodo Tamin who is the General Manager (shared service) of the cooperative.
Said officer will be assisted by the existing administrative staff of the
cooperative who will work part-time on the proposed project. These officers
worked as volunteers and are not receiving any compensation from the
cooperatives present business activities. Most of the operational positions
will be sourced within the cooperative members. The proposed mobile
decorticating machine to be provided will serve not only coconut farm areas
of the cooperative members (which comprise only about 6% of fruit bearing
coconut trees required) but also those owned by non-members conveyed
thru the Manggamnan River or serviced by the mobile decorticating machine
for so long as profitability is not compromised. The machine will be operated
and maintained preferably by members of cooperatives. This enterprise will
offer reliable income-generating opportunities as demand of geo-nets and
other coir-based products is expected to be on an uptrend. This proposed
environmental friendly enterprise will have great favorable impact on
economically enabling residents (especially women) in various farm areas as
the planned outsourcing of various value-adding works will be dispersed.
While coop members may act as agents for non-members who wish to sell
their husks, the processing aspect of twisting/twining being home-based is a
revenue earner that will not generally disrupt domicile activities.

Representatives from the Department of Agriculture MIMAROPA IVB and

PLGU Marinduque will sit with the board of directors as ex-officio members
that will closely supervise, monitor and assist the cooperative in sustaining
the business. Being non-voting directors, they can participate in policy
deliberations but never in direct voting. They can neither be involved in final
settlement of issues nor be elected into office of the Proponent Group
control/organizations officials. Technical assistance from different partner
agencies like DAR, DA, DOST, DTI, PhilFIDA, DENR, DOLE and PCA will be
tapped to facilitate smooth operation and enhance sustainability.

For the purpose of the enterprise, the Butansapa Multi-Purpose

allocated duties and responsibilities for different functions and processes
directed towards achieving their business objectives.
The Grievance Redress Mechanism Point Persons primary role is to
collect and resolve all feedbacks from the beneficiaries and resolution of
complaints regarding the PRDP subproject performance and activities in all
phases of its implementation (pre-construction, construction and operation
phases).

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

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 A. Organizational Structure of Coco Coir Processing

Figure 1. Organizational Structure

BUTANSAPA
DTI, DOST, MULTI-PURPOSE
PLGU-Marinduque
PCA, DA, PhilFIDA, DOLE, COOPERATIVE
MLGU, DAR, MARO-Mogpog, PCC

EXTERNAL AUDITOR
SALES CLIENTS
GENERAL MANAGER (Shared service)
MATERIALS SUPPLIERS
GRIEVANCE REDRESS MECHANISM (GRM)

OPERATIONS ADMINISTRATIVE

Coco Husk Suppliers

CASHIER
(1) Decorticating Machine Operator BOOKKEEPER
w/ 1 Helper (Part-time) (Part-ti
(Coconut Farmers/ Land Owners)

Driver Laborer (1)

Village Coco Coir Twiners/Twisters

(25)
NOTES:
Parties in the white field-filled boxes are stakeholders who are not part
of the enterprise staffing requirement. These are presented only to illustrate
the whole operating context of the business.

The General Manager, Cashier and Bookkeeper are incumbent

appointed officers of the Cooperative.

Table 4. Staffing Requirements and

Qualifications/Responsibilities/Compensation Package
ITE POSITION QUALIFICATIO RESPONSIBILITI COMPENS
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
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 ES/
M NS A-TION
FINCTIONS
A. GENERAL Incumbent Oversee, direct PhP265/
MANAGER and control the work-day
day-to-day (@
operation of PhP350/wd
Geonet -shared
production/ service
business 75% of time
operation: devoted to
1. Supervise the Coco Coir
subordinates in Processing
compliance to Project
their job since other
descriptions; cooperative
2. Act as the business
overall quality activities
controller on the are
finished schedule-
products; based or
3. Submit
seasonal)
monthly reports
to the BOD on
the following
with comparison
with the Coop
targets:
a) Geonet
Production
Report
b) Inventories
Report
c) Sales Report
4. Manage and
control
expenditures
within agreed
budget
5. Ensure that
activities meet
organizational
requirements for
quality
management,
health and
safety,
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 14
 regulatory
requirements,
environmental
policies.
B. CASHIER Incumbent 1. Act as fund PhP100.00/
custodian for the work-day
enterprise, pays (Part time
purchases of only)
supplies/raw
materials, etc. in
coir and geonet
production
2. Prepare
summary of
payments/
releases
3. Prepare
monthly
monitoring
report like
Purchase/
Payment
Reports
C. BOOKKEEPER Incumbent 1. Maintains the PhP100.00/
Books/ financial work-day
records of the (Part time
enterprise. only)
2. Prepares
preliminary
financial reports
and other
reports
pertaining to the
accounts
maintained
D. DECORTICATI Male, 21-60 1. Facilitate PhP2.00/kgs
NG MACHINE years old preparation of . of coir
OPERATOR At least High requirements for processed*
(1) School coir production.
2. Supervise *shares with
graduate
performance of 1 helper
With 2 year
experience in helper.
machine/ 3. In-charge of
mechanical proper care of
operation/ the mobile

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Cooperative 15
 troubleshootin decorticating
g/maintenanc machine.
e. 4. Maintain the
Willing to cleanliness and
attend hands- orderliness of
on-training on the production
the operation facilities and its
and surroundings.
maintenance 5. Perform duties
of mobile as assigned by
decorticating the General
machine. Manager.
Preferably a 6. Prepare/submit
bonafide required
Cooperative report(s).
member
E. DRIVER (1) Male, 21-60 1. Drive hauling PhP250.00/
years old tricycle. work-day
At least High 2. Assist in
School packing and
graduate weighing of coir
Knows how to fiber
read and write 3. Assist in
Knows how to hauling of
drive vehicles products and
Possess drivers materials
4. Perform duties
license with
assigned by the
restriction
General
1,2,3
Knows simple Manager.
5. Responsible for
mechanical
the
operation/
maintenance of
troubleshootin
hauling tricycle.
g/maintenanc
e.
Preferably a
Coop member
F. LABORER (1) Male, 21-60 1. Assist driver/ PhP235.00/
years old decorticating work-day
Knows how to machine
read and write operator
Preferably a 2. Assist in
Coop member packing and
weighing of coir
fiber
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 16
 3. Assist in
hauling of
products and
materials
4. Undertake
drying/ cleaning
of coir as
needed
5. Perform duties
assigned by the
General
Manager.
6. Responsible for
the cleanliness
and orderliness
of the area of
operation.
G. VILLAGE Male or female, 1. To produce coir PhP2.00/ha
TWINE 15 years old twines in nk
MAKERS (25) and above accordance produced
With the with
aptitude to specifications.
learn and/or 2. To produce
master coir required
twining products on
Has time to do time
twining works 3. Responsible for
and deliver the care and
products per maintenance of
schedule twisting/twining
Coop Members devises
entrusted for
their use.
PARTIES THAT RELATES TO PRODUCTION and OPERATION
1. EXTERNAL AUDITOR Performs annual financial audit
Per Resolution of the Board of in accordance to the New
Directors (Accredited Philippine Auditing Standards
Cooperative External Auditor as and make necessary
mandated by RA 9520 or the recommendations to the
Philippine Cooperative Code of cooperative.
2008)

B. Production Process

In the initial stage of operation (Year #1), the enterprise will be

operating at 80% of the rated capacity of the mobile decorticating machine

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 17
of which only one (1) unit is packaged under this project proposal. Said
mobile decorticating machine is rated at 600 coco husks per hour, hence 480
coconut husks hour or 3,840 husks will be processed per day.

Sixteen percent (16%) of husk requirements can be supplied by the

members while the remaining 84% will be brought in from other coconut
farms in the Municipality of Mogpog, Marinduque. Particularly, these other
farms refer to coco lands along the banks of the Manggamnan River.

Considering continuous supply of coconut husk is critical, the

enterprise is set to maintain an inventory of raw materials good for three (3)
months decortication operation working at five (5) work-days per week (20
works-days per month or 240 work-days per year). Ample buffer is deemed
necessary should unfavorable conditions (typhoons or dry spell) diminish
routine husk supply. At the initial 80% decortication capacity, the inventory
requirement would 230,400 husks which is intended to be accumulated in
designated copra-making zones through purchase of additional 960 husk
per day of the first year of operation. The flexibility of having the mobile-
type of decorticating machine would ensure that raw material inventories at
the zones will always be within the limits (to be decided later based on
actual conduct of operations). As such, only the raw materials from husks
suppliers within viable distance from the cooperative center or conveyed thru
the Manggamnan River will have to be stored within the vicinity of the
processing center. For safety purposes as dry husks are fire hazards, the 3-
months husks inventories shall be maintained in the selected decortication
sites (in near proximity to copra-processing sites or the river). The purpose
of having a mobile decorticating machine for the project is simply because
the availability of husks varies and only actual operations will make the husks
volume per area be determined for viability. Local copra-making areas are
known to the project proponents but the determination of exact zoning shall
be finalized only after the start of operation.

A soaking pond is proposed. Being near the river, the soaking pond is
not so vital to the operation during rainy days but needed during dry spells.
The soaking pond will be located at the lot donated for the project. However,
the mobile decorticating machine proposed can process even very dry husks.
Coir dust is the concern in dry husk decortication but this favors the PG as
decortication is paid by weight of processed coir fiber. (Dry is less weight)

The target coco areas within Mogpog, Marindque will later be divided
into five (5) zones. Four (4) of these zones will be assigned a decortication
day (fixed day per in each week). The spread of each zone and the actual
decorticating site per zone will also be determined after the project has
started operation. Each decortication site, aside from its proximity to copra-
making points per zone shall be near access road where the tricycle that
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 18
pulls the mobile decorticator will load the coco coir for delivery to pre-
determined member-household that will process them into hanks. This
mobility likewise facilitate the outsourcing of twiners/twisters (initially
prioritized for women coop members). This condition eases up the space
requirements which would have otherwise constricted processing operation
within the confines of the shed.

C. Resources and Production Method

There are 37 members of the Butansapa Multi-Purpose Cooperative

who own or tend coconut trees for livelihood. With about 11,132 coconut
bearing trees however will never be enough to fill the husks requirement for
processing. About 84% of the raw materials will have to be sourced-out by
members, acting as agents of the cooperative. The situation is not
considered critical as the raw material required is considered farm waste
which until now has not been an object of commerce. The volume required
however is easily available within the viable field of operation of the
cooperative as the Municipality of Mogpog alone has about 3,939 hectares of
coconut land including those owned by the cooperative members. These are
the primary source of raw materials for the proposed coir hanks
manufacturing. The coconut husks gatherers would be the coconut farmers
and their household members (with the permission of the landowner
preferably). But as being usually treated as copra-making waste, other
non-farm owners and/or landless workers could benefit from the opportunity
of having a processor who buys said waste.

Typically, the coconut husks will be gathered from pre-identified

coconut farms within the area of operation and from neighboring barangays
at designated schedules. The Municipality of Mogpog, where the enterprise
will be based has 32 barangays with a total of 495,648 bearing coconut
trees inclusive of those owned by the cooperative members. BMPC will be
working with the coconut farmers in nearby barangays as well as with those
adjacent to the Manggamnan River to secure the raw material requirements.

The use of mobile decorticator offers the flexibility that is required of

the start-up business. Programmed outputs for the production processes are
as follows:
a. The main product for the project is coir twines/ropes in units called
as hanks;
b. The mobile axial-type decorticating machine is capable of
processing at least 600 husks per hour to produce suitable coir in
single (1) pass only;
c. Field Utilization of the mobile decorticator shall be @ 80% or 3,840
husks/day;

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Cooperative 19
 d. The industry data of 90 grams of coir : 210grams of peat per 1,000
husks is applied such that the projected daily out-put are at: 3,800
hanks and 806 kgs. of coco peat;
e. Coir Twining capacity is at 20 hanks per hour/twining device. For the
required output, each the 25 units of twining/twisting devices would
need to turn-out 19 hanks/hour (95% efficiency). With payment
based on completed hanks, underproduction is not considered a
matter of concern.
f. Eleven (11) hanks of 11 meters each can be processed from each
kilogram of coir;
g. Being home-based, hanks shall be collected daily (on regular
rotation) as replacement coirs are delivered. Hanks are paid upon
pick-up
D. Process And Resources Needed In Producing Coco Geonets

Figure 2. Process Flow

GATHERING/HAULING OF HUSKS
(Daily)

SOAKING OF HUSKS
(As needed)

DEFIBERING/DECORTICATION
(Daily)

DRYING OF COIR
(As needed)

SELECTIVE CLEANING OF COIR

(As needed)

PACKING OF COIR & PEAT (in

Sacks)

COIR DELIVERY
(Daily rotation on members)

TWINE/Hanks PRODUCTION/Pick-
up

PACKING/HAULING
(every Friday)

MARKETING
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 20
Table 5. Operation Process and Input Requirements:

INPUT
PROCESS DESCRIPTIO LOCATIO PROCESS RESPONSIB
REQUIREME
STEP N N OUTPUT LE PERSON
NT
Gathering Daily Farm level/ Hauling Quality Farmers/
of coconut collection of Designated Vehicle (for Husks of Contact
husks husks (4,600- pick-up Plant Site required Persons,
5,000 pcs.) areas Deliveries quantity Driver
with build-up Only)
of inventory
coconut husks.
Soaking of Submerge Plant Site/ Soaking Wet husks Decorticating
Husks husks in water Decorticati Pond, Mach.
(as on Centers (stream/cree Operator and
needed) k for field helper
decortication
)
Defibering/ Separate coir Plant Site/ Mobile Coco coir Decorticating
Decorticati from coco Decorticati Decorticatin fiber and Mach.
on dust/peat on Points g Machine coco peat Operator and
and tricycle helper
Drying Reduction of Multi- Improvised Dried fiber Winnowing/
(as moisture purpose rake @ 16%- Baling
needed) content pavement 20% Machines
moisture Operator
content supervising
the
helpers/labors
Manual Reduction of Manual at Shed for Cleaned Winnowing
selective dust/peat Decorticati manual Coir Mach.
cleaning content and on Centers Operator w/
(as decreased helpers
needed) CH-W coir Twiners in the
grade field
Packing / Putting Coir Decorticati Open tricycle Coir in Laborer
Weighing into sacks on sites Weighing Sacks
Scale various
weight
Twisting/ Convert coir Residence Twisting/ 11 mtrs. Coop.
Twining into hanks by of Twining Hanks @ 4- Member
twisting Members Devices 5mm Twiners
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 21
 usable
twine
Packaging/ Proper Coop Tying Properly General Mgr.
Hauling Tagging/ Shed/Stora Materials identified Labor
Identification ge Wooden hanks
and hauling of Paleta
hanks
Marketing Identification Plant Site/ Product Data Sales General
and Negotiation Sheet Manager
negotiations Points
with various
heads of office
of prospective
clients

E. Infrastructures, Equipment, Tools, Furniture And Fixtures

Table 6. Infrastructure Requirements

ESTIMATED ESTIMATED
QUANTI SPECIFICATIO
ITEM PURPOSE COST PER TOTAL
TY NS
UNIT (PhP) COST (PhP)
6m x 10m
Storage and
Shed/Stora Semi-Concrete 5,000.00/sq.
equipment 60 sq.m. 300,000.00
ge Building with G.I. m.
safekeeping
Roofing
8.0 m x 16.0 m
@ 7.50 cms
Drying & coir
thick Concrete
Multi- cleaning
Pavement, 450.00/sq.m
Purpose when 128sq.m. 57,600.00
Plain Cement .
Pavement needed.
on leveled and
Other uses
compacted
natural base
4.0m x 6.0m @
60 cms deep
Area for Rein. Concrete
Soaking soaking slab with CHB 1,100.00/sq.
24 sq.m. 26,400.00
Pond husks as sidings, m.
needed plastered/plain
cement
finished.

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 22
Table 7. Vehicle
ESTIMATE ESTIMATE
QUANTI SPECIFICATI D COST D TOTAL
ITEM PURPOSE
TY ONS PER UNIT COST
(PhP) (PhP)
Reliable
Hauling of
Motorcycle
Materials
Hauling & unit with
and
Decorticat fabricated
Servicing 1 unit 150,000.00 150,000.00
or Service loading sidecar
of
Vehicle (GI Pipes) and
Decorticato
pulling
r
attachment

Table 8. Tools and Equipment

ESTIMATE ESTIMAT
PURPOS QUANTIT SPECIFICATION D COST ED TOTAL
ITEM
E Y S PER UNIT COST
(PhP) (PhP)
Axial
Flow/Drum
Type with
Extract stabilizers and
Mobile coir fiber at least 600
Decorticati from 1 unit pcs. of coconut 400,000.00 400,000.00
ng Machine coconut husk
husks decortication
capacity/hour.
12 Hp (Kubota)
Diesel Engine
Convert
Village/Rim
Twisting/ coir into
Type Portable
Twining twines 25 units 1,500.00 37,500.00
Twisting/twinin
Device usable for
g units
weaving
Weigh coir
Suspended
fiber (in
Dial-type
Weighing sacks) as
1 unit Weighing unit 4,800.00 4,800.00
Scale labor cost
@ 50 kgs.
payment
Capacity
reference
Spade For proper 4 pcs. Steel blade 300.00 1,200.00
disposition with wooden
of coco handle
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 23
 peat
Wooden
Proper movable
Paleta stockpiling 10 pcs flatform 60cms 300.00 3,000.00
of Hanks x 100cms
x10cms
Used for
All-purpose
miscellane
Working 24" x 48" x
ous 2 pcs. 2,500.00 5,000.00
Table 32" wooden
operation
table
activities
For Steel (matt
Filing records painted) 4
1 unit 10,500.00 10,500.00
Cabinet safekeepi layers cabinet
ng with lock

Table 9. Supplies (Part of Working Capital)

ESTIMATE ESTIMATE
QUANTIT SPECIFICATIO D COST D TOTAL
ITEM PURPOSE
Y NS PER UNIT COST
(PhP) (PhP)
Temporary
packaging
Sacks for 500 pcs. NFA Size 10.00 5,000.00
transport of
fiber coir
Securing
Tying sacks and
100 rolls Plastic straw 50.00 5,000.00
Straw rolled
geonets
Protection
for workers
Face against
100 pcs. Surgical Mask 10.00 1,000.00
Mask dust/particl
es
inhalation

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 24
IV. SOCIAL AND ENVIRONMENTAL SAFEGUARDS

A. Social Safeguard Aspect

1. Subproject Beneficiaries

The subproject beneficiaries are the 42 members of the Butansapa

Cooperative wherein 32 were female and 10 male. The membership of the
cooperative is open to all Filipinos who are of legal age, with capacity to
contract, and are residing or working within the area of operation. Majority
are living below poverty with an average monthly family income of P
6,200 with average family size of 5. Farming is the major source of income
of the most members. One of the major concerns of the members is that
during lean season or after typhoon they were greatly affected that their
income are not enough to sustain their living. Thus, coco-coir production is
seen as one solution to improve their livelihood as coco-husk is always
available from the surrounding as a waste from copra making.

A consultation meeting was conducted last February 2, 2016 at

Butansapa Barangay Hall attended by 25 coop members. The objective of
the meeting was to orient and consult the members regarding the project
proposal under PRDP.

Women will be tasked to do the twinning and twisting of coco fiber.

One of the benefits of the project is improving the socio-economic status
of members and non-members. Aside from the direct benefits of the
members in the form of dividends, patronage refund, and sales from
husks, the project would also generate employment for those involved in
the operations. The impact of the enterprise on farm household women is
also an excellent area for the manufacturing process. Having satellite
processing sites (even for the hanks alone) can give these farm-bound
women to earn extra income at their available time. Being part of an
organized work process is expected to likewise enhance their social
awareness.

2. Indigenous Cultural Community/ Indigenous People (ICC/IP)

There is no presence of indigenous people and declared ancestral

domain within or near the area of operation as certified by the barangay
captain (see attached certification).

3. Status of Land Ownership

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Cooperative 25
 Under the project in which coir production is mobile, securing of raw
materials which are wastes from copra processing do not require actual
ownership of the coconut farm lands from which such waste materials will
be secured.

However, the project shall use and maintain a storage/shed facility

located at Mogpog, Marinduque with an area of 1000 sq. meters donated
by a private individual who is a member of the cooperative (see attached
Deed of Donation).

4. Grievance Redress Mechanism (GRM)

The current Mediation and Conciliation Committee Chairman is

appointed as the Grievance Redress Point Person. The Point Person is
tasked to collect and resolve all the feedbacks from the beneficiaries
regarding the PRDP subproject performance and activities in all phases of
its implementation (pre-construction, construction and operation phases).

Executive Order No. 2015-009 dated October 9, 2015 entitled

Reorganizing and Strengthening the Philippine Rural Development Project
Provincial Project Management Implementing Unit of the Province of
Marinduque and for other purposes includes the creation of Grievance
Redress Mechanism (GRM) team.

B. Environmental Safeguard Aspect

1. Natural habitat

Proposed site is a piece of alienable and disposable land located

within the western part of barangay built-up area along the national road.
The site has no significant plant habitat; vegetation is generally natural
weeds of grass species and with few coconut trees and bananas planted
near the lot boundary and is not included in the list of endangered flora
species. The said site has been utilized for vegetables production for quite
some time during rainy season. The adjacent lots are being utilized for
non-irrigated rice production, coconut plantation intercrop with fruit trees
and banana, and residential areas.

There is no fauna habitat and endangered fauna species present in

the site. Birds such as batobato, bulbul, maya and tagak; butterflies,
hawaiian frog, goldkuhol and fruit bats are commonly observed in the
vicinity and are not included in list of endangered species. No record of
avian migration and habitat known to occur in the area. The nearest
protected area is about 3km away and no encroachment will occur.
Likewise, the said site is far from any water ecosystem. Assessments
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 26
undertaken indicate that the proposed activity is unlikely to have
significant impact on natural vegetation and biodiversity.

2. Hazards/Risk Assessment (Drainage Situations, erosion and

Flooding Potential)

The location of proposed site is located within the flat to nearly flat
terrain having slope of 0-8% occurring as pocket between the skirts of
hilly and mountainous areas. Based on the flood hazard susceptibility
map of the province with reference to NAMRIA and Mines and
Geosciences Bureau maps, the proposed site including adjacent areas are
under moderately susceptible to flooding with provability of occurrence
and return period of 1 in every 21 years. The return period was computed
and determined based on the threshold rainfall event for the province
including the effects of climate change as projected for year 2020. There
were flood control and drainage facility built by the barangay that
addressed the flooding issue in the low lying eastern portion of barangay
built-up area and agricultural land caused by storm run-off coming from
the western mountainous areas. There is an on-going construction of
flood/river control project along Mogpog River by DPWH in the upper
northern portion of the barangay proper to mitigate the occurrence of
flooding. Necessary drainage facility such reinforced concrete drainage
crossing is present in the vicinity. However, necessary back filling works
has to be done in the proposed site to mitigate the provable occurrence
of flooding in the area. With reference to the hazard susceptibility map of
the province the site and adjacent areas is free and not susceptible to
rain-induced landslide and earthquake induced landslide. No record of soil
erosion in and adjacent hilly areas as slopes are adequately covered by
vegetation.

Being located along the national road the road right-of-way (ROW)
of not less than 20 meters must be observed and included in the site
development to allow continuous flow of pedestrian and vehicular traffic.
A setback of 5 meters or less from the outermost face of the building to
the property lines must be provided and free from physical obstructions
that can negatively affect the natural light and ventilation or that can
impede access to the sides and read areas. All construction,
infrastructure development, advertising sign and bill board shall secure a
building permit and locational clearance at the local building official
covering the required scope of work. Any construction/installation of sign
board and advertising sign that may cause obstruction to traffic must
secure clearance from the DPWH so that minimum setback requirements
are properly observed.

All construction and infrastructure development shall secure a

building permit and locational clearance at the local building official
BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose
Cooperative 27
 covering the required scope of work. During civil works, available vacant
lots shall be maximized as temporary depository for excess excavated
materials and construction materials. Contractor compliant to
occupational safety standards shall be considered in the awarding of
contracts. There are no potential air contamination issues during
construction and operation. Provision of gas mask, goggles and hard hat
shall be required as part of safety measures. No waste will be produced
during the operation. However, garbage bins shall be provided and proper
waste segregation shall be implemented for domestic waste from workers.

3. Integrated Pest Management (IPM) and DA-KASAKALIKASAN

The farmers in the area are adopting organic farming technologies

such as natural fermented juices and other botanical pesticides. Some of
the farmer members had attended Farmers Fields School.

4. Social and Environmental Impact (Please refer to Accomplished

ESMP Form attached)

Since the project deals with the utilization of waste materials for
economic purposes, the coco coir processing proposal is deemed to have
no adverse effect to the environment. No processing aspect under the
project requires the use of chemicals. Noise to be created by mechanical
machinery will be minimal and far enough from school compound.

More importantly, the processing by-product (coco dust/coco peat)

may even be utilized as soil conditioner in and around the area where the
decortications process is undertaken.

V. FINANCIAL ASPECT

The financial projections for one (1) year operation of the business
indicates high profitability with Gross Profit Margin @ 32.29% and Net Profit
Margin of 23.27%. More impressive is the return on Investment Rate of
59.22% which puts investment costs recovery within less than a year. The
Ending Net Asset Balance of PhP1,529,998.33 favorably compares with the
Investment Cost of PhP1,317,392.00.

More noteworthy however that in a single year transaction, the

proposed business is expected to generate PhP2,711,122.06 in direct
payments for dividends, patronage refund, husk acquisitions, labor cost,
wages and salaries. Such direct benefits amount is more than twice the
investment.

The Working Capital which includes labor and supplies amounts to

PhP176,832.00.

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 28
 The accumulation of husk inventory is reported in the Projected
Monthly Cash Flow and in the Projected Monthly Balance Sheet. Cost of husk
in production is indicated at net of inventory movements.

BUTANSAPA COCO COIR PROCESSING PROJECT Butansapa Multi-Purpose

Cooperative 29