SPMC palm oil business not hurting coco industry

This refers to the news item titled “Solon seeks probe of palm oil imports by gov’t firm” (Inquirer, 2/3/13).

In this news item, Rep. Danilo Suarez is reported to have said that the importation of palm oil by San Pablo Manufacturing Corp. (SPMC) and its distribution in the country are “anomalous.”

The truth is, despite the distribution by SPMC of imported palm oil, sales of coconut oil products by the CIIF Oil Mills Group (OMG), to which SPMC belongs, actually grew. Also, the group’s sales of palm oil represent only a small fraction of its total sales. The group’s production of coconut oil and by-products went up 35 percent, from 285,647 metric tons in 2011 to 386,154 MT in 2012. SPMC’s palm oil sales (3,717 MT) represent only 1 percent of the group’s total sales and 3 percent of its total domestic sales in 2012.

The truth is, SPMC is engaged in the sale of palm oil only for the purpose of maintaining its share in the domestic cooking oil market and to generate incremental revenues.

The prevailing scenario, where demand for palm oil is increasing as there are now 34 brands of palm oil, has forced SPMC and other producers of coconut oil to engage in the business of selling palm oil as well.

Had SPMC refused the offer of a large Indonesian palm oil producer to distribute palm oil in the country, we would have lost a business opportunity where palm oil sales would offset any decline in the company’s coconut cooking oil sales.

Through the years, the group has continuously increased its production of coconut oil and other by-products. This means only one thing—the purchases of copra feedstock from our coconut farmers have also been increasing. Clearly,

CIIF OMG has been strongly supporting the coconut industry.

Suarez further claims that SPMC had imported palm oil products without paying duties or import taxes. The truth is SPMC “religiously” pays import VAT on all incoming palm oil shipments and the records of the Bureau of Customs will attest to this.

I welcome the proposed congressional investigation on the matter.

—JESUS L. ARRANZA,

president and CEO,

San Pablo Manufacturing Corp./

CIIF Oil Mills Group,

UCPB Bldg., Makati Avenue, Makati City