FTI eyes BOT arrangement for P730-M modernization program

The state-owned Food Terminal Inc. (FTI), one of the country’s largest industrial complexes, wants to undertake an ambitious P730-million modernization program to upgrade its facilities.

FTI president Bernie F. Fondevilla said the FTI complex in Taguig needs to be upgraded so that it could attract more industrial, food processing and manufacturing companies to set up shop in the 120-hectare zone.

Fondevilla said of the P730-million fund required to bankroll the modernization program, as much as P600 million would be used to upgrade as well as put up additional cold storage facilities, with the remaining P130 million to install a modern water treatment facility.

Funding for the makeover of FTI, an attached agency of the National Food Authority (NFA), would come mostly from capital from the private sector, Fondevilla said. "We are trying to woo the private sector to invest in this program," he said.

The other proposed projects include expanding access roads that will allow the FTI to have direct links to the South Luzon Expressway and to the Circumferential Road -5 (C-5).

Agriculture Undersecretary for Luzon operations and concurrent NFA administrator Arthur T. Yap said one of the funding schemes being explored is the build-operate-transfer or BOT mode, which has been resorted to by government agencies to raise money to implement critical infrastructure projects.

Yap added that FTI would attempt to privatize about 15 hectares of the complex this year, the proceeds of which would also be used to partially finance the proposed modernization plan.

"We are confident that we will be able to get a fair price for the areas to be privatized while this year’s leasing rates should increase to reflect market values," Yap said, adding that a number of tenants such as publicly-listed SPI Technologies, one of the country’s major business process outsourcing firms, have expressed interest in acquiring the areas to be privatized.

Yap said the NFA has put at bay plans to undertake another wholesale privatization bid for the FTI complex after previous auctions failed.

"The market is just too soft to attract serious buyers or investors," Yap said.

Fondevilla said that while the FTI has yet to settle debts of about P1.5 billion, the agency has, for the first time after being in the red for years, posted a net income of P18 million in 2003, mostly from repossession of certain assets.

FTI, established during the Marcos administration, was envisioned to be a major agro-industrial-commercial estate.

Today, some 400 light and medium-sized companies and industries occupy the complex. They are engaged in various lines of production and services such as electronics, food, transport, garments, and general warehousing.

Aside from estate leasing, FTI is also engaged in cold storage warehousing. Its existing facilities include a central refrigerated warehouse with a 55,000 cubic meter of storage capacity, making it one of the largest single-refrigerated warehouse in Asia.

The plant also houses 12 chiller rooms, 12 freezer rooms, seven blast freezers and five processing rooms. It services varying profiles of customers from farmers/producers, exporters/traders, food manufacturers, processors and modern institutional buyers.