Gov’t could hold on to stake in dormant Cocochem
THE GOVERNMENT is reviewing plans to sell shares in United Coconut Chemicals, Inc. (Cocochem) as global demand for coconut products rebounds, the Department of Agriculture (DA) said on Monday.
Agriculture Secretary Francisco P. Tiu Laurel, Jr. said the government is now studying the possibility of holding on to its stake in the company, which used to produce chemicals and oleo fats, in light of strong European demand for coconut products.
The government, through the Land Bank of the Philippines, had planned to auction in June around 682 million common shares in Cocochem, with the goal of raising at least P2.82 billion in proceeds.
The government is now evaluating whether holding on to its stake will result in greater value to the coconut industry.
The DA said the sale had also originally been intended to allow private investors the opportunity to revive or redevelop Cocochem.
According to its website, 92.85% of Cocochem is currently owned by the Coconut Industry Investment Fund. The remaining 7.15% is owned by Germany’s Philholding, SA.
Established in 1981, Cocochem was once the largest producer of coconut chemicals and oleo fats in Southeast Asia.
However, in 2001, the non-implementation of Executive Order 259, which had required the use in detergents of some Cocochem products, disrupted the company’s operations.
Record coconut oil prices in the following decade further affected the company’s competitiveness relative to palm oil producers in Southeast Asia, leading to the plant’s shutdown in 2012.
In 2014, the company pivoted away from manufacturing to leasing land, renting warehouses and tank storage, distributing power, treating wastewater, operating piers, and renting residential property. — Vonn Andrei E. Villamiel
You May Also Like
Avalanche Now Hosts First South Korean Won-Based Stablecoin
Unlock Yield: Upshift, Clearstar & Flare Launch New earnXRP Product
