The rise of an innovative enterprise

Agricultural engineer Dr. Justino Arboleda couldn’t be more ecstatic if his company Coco Technologies Corp. (Cocotech) wins this year’s The World Challenge competition organized by global broadcasting giant, BBC World and Newsweek.

The competition recognizes outstanding individuals or groups from around the world whose innovative enterprises or projects at the grassroots level are making a significant impact on communities.

But Arboleda is content just being one of 12 nominees worldwide.

"I’m happy even if we don’t win, there’s already a certain level of recognition for our company that’s been contributing to poverty alleviation. It raises our credibility and inspires us to do more of this work and create jobs. The nomination is free promotion for us, maybe we will have more customers and we in turn will be able to employ more households," says Arboleda.

Prior to being Cocotech chief executive officer, Arboleda’s professional life was in the academe where he was from 1987 to 1994, Dean of the Bicol University College of Agriculture. In 1995, he quit and set up Juboken Enterprises which later became Cocotech.

"I wanted to become an entrepreneur to prove that technologies developed in the University can be viable business ventures. My company did handicrafts and accessories but I realized it was too limiting because we have to be updated with the latest styles and with the Asian financial crisis in 1997, I decided that we should go for something more sustainable and so we developed products using coconut waste fibers that could have industrial applications," recalls Arboleda of his start up years in the business.

Arboleda, who tapped households for his initial venture, then realized his company could actually do more to generate livelihood for these low-income families. Albay, where the company is based, is still considered one of the poorest regions in the country.

Cocotech then developed a whole range of geotextile products that makes use of the fiber and peat segregated from discarded coconut husks and process these into erosion control and agricultural products.

These include erosion control nets or coconets, rolls and wattles that are used for slope stabilization and rehabilitation.

The cocopeat, having high moisture retention capability, is an effective growing media for flowers and vegetables. It can also be used for soil rehabilitation and when combined with brown seaweed, is further transformed into a potent natural fertilizer for agricultural applications.

Today, under the brand name of Cocogreen, Cocotech products are exported to China, Thailand, Japan, European countries like Germany and the US.

Recently, the company signed a memorandum of agreement with Guangzhou River Enterprise Co. Ltd..

Under the agreement, Cocotech will supply $2 million worth of coconut fiber geotextile products to be used in riverbank repair in Guandong Pan Pearl River Delta and other areas in China. Other companies in China have signed contracts with the company for various desertification projects.

On the domestic front, Cocotech’s growing roster of projects include soil erosion and riverbank slope protection at Verdana Homes, Tagaytay Highlands, Terrazas de Punta Fuego of Landco Pacific, several Ayala Land residential property projects, the Talisay River Rehabilitation project in Camarines Norte, Zamboanga-Pagadian slopes and road embankment protection and the Agno River riverbank rehabilitation.

Its recent contracts include a P150-million soil erosion control project for the Subic-Clark road.

Making use of coconut fiber and peat was but the natural direction for Cocotech. Arboleda stresses that Bicol is one of the major coconut producing regions in the country. Nationwide, about 11 billion coconuts are harvested and about eight million husks are just burned or thrown away.

"What we are doing is to utilize coconut waste and turn it into a profitable venture. Eventually, our efforts could be replicated by other provinces."

To realize his vision of increasing the livelihood of households in his province, Arboleda teamed up with the Foundation for A Sustainable Society Inc., a non-stock, non-profit corporation and organized households in the surrounding communities.

At the outset, the Cocotech factory employed 40 regular workers. Gradually, the company subcontracted fiber twining and weaving activities to low-income households in the communities. There are now about 1,500 households actively engaged in these ventures.

A household, according to Arboleda, earns about P8,712 monthly from coco fiber twinning at 360 twines per day. This income is 297 percent above the regional minimum wage. Coconet weaving households, on the other hand, earn P9,636 which is 329 percent more than the regional minimum wage.

Farmers also earn from waste coconut husks that they once just discarded. A coconut husk sells for P0.05 centavos or about P500 per truckload when collected at the source.

"The household income that is generated is a lot higher than what they can earn from the traditional copra-based economic activities which usually just nets P2,000 a month.This is not enough to sustain a family of six for instance. Their income from twining and weaving on the other hand, is also higher than the income from both on and off-farm activities in many rural communities nationwide," says Arboleda.

To keep pace with increasing demand for Cocotech’s flagship product, the coconets, produced at a rate of 30,000 square meters monthly for markets throughout the world, the company established a network of production facilities nationwide of which two are in Northern Mindanao, two in the Visayas and three in Bicol.

While Cocotech has been noted by The World Challenge for its pioneering efforts, various environmental groups have also lauded the company’s bioengineering success.

Its products today, especially those for soil erosion control, slope rehabilitation and desertification are gaining more acceptance across the globe. The coconets for example, act as surrogate roots, holding loose soil together and enabling new vegetation to grow. Being durable and biodegradable, the coconets are considered environment-friendly.

"I think part of our success is that there is also emphasis on the environment, people are going back to nature and demand for these type of products just keep on growing."

Arboleda is still looking and developing for new coconut waste products, and constantly trying to top his competitive edge. After all, other Asian countries like Sri Lanka and India are playing catch up, backed by strong government support and subsidies, a luxury that continues to elude Filipino farmers.

"These two countries are enjoying a lot of support from their governments through low interest, long-term credits and tax holidays. We have to watch our back. The bottomline is that I want to sustain and even expand my business because I’ve seen its trickle down effects on the communities we work with. We cannot afford to be overtaken by competition," a determined Arboleda concludes.