Home-grown MINOLA has remained the country's number one coconut cooking oil brand in the country with market share of 17 percent in a market that is heavily saturated with various imported edible cooking oil brands.
In a report to President Benigno Aquino III, outgoing CIIF Oil Mills Group outgoing president & CEO Jesus L. Arranza said that Minola sales reached 10,375 MT in 2012 accounting for 17 percent of the total market.
Minola is produced by San Pablo Manufacturing Corp., one of the CIIF 6 oil mill group, which corners 48 percent of total domestic coconut oil market. Total domestic coconut oil sales (including bulk) grew from 2011 29,465 MT to 55,848 MT in 2012. Minola's total revenue in 2012 hit P1.06 billion.
According to Arranza, there are now about 10 brands of coconut cooking oils in the country. After Minola, the two other big brands are Spring and Baguio.
Coconut oil is proven by American doctors to contain lauric oil that can only be found in mother's milk.
It has anti-viral and anti-bacterial properties.
Despite its proven health benefits, coconut oil is facing stiff competition primarily from palm oil, which has an excess inventory of 3 million metric tons globally.
The glut in supply for palm oil is caused by excess production since a hectare of palm oil produces 5,000 kilos as against 600 to 800 kilos of coconut oil per hectare.
There are also now 34 brands of palm cooking oil brands in the country and are sold at lower prices than coconut oil.
The excess palm oil production has also caused prices of coconut oil to drop substantially. Already, the price of copra has gone down to $750 per metric ton at present from a high of $1,500 in December 2011. Farm gate price is now at P10 per kilo from a high of over P60 in 2011.
This has also resulted in the huge losses incurred by other coconut oil mills, which held on to their stocks on hopes for higher prices.
While there is no reason that should prevent copra prices from going up, Arranza said the strongest factor working against it is the glut in palm oil, which controls 47 percent of the world edible oil market with Indonesia and Malaysia accounting for 90 percent of the market.
Soya oil is the second biggest globally with 40 percent market share, but it accounts for 80 percent of the US market. In China, peanut oil accounts for 80 percent of the market.
Meantime, coconut oil has only a meager 3 percent market share globally.
Despite this situation, Arranza said the six OMG companies and its subsidiaries registered P12.6 billion in total revenues in 2012 that is 10% higher than that budgeted for the period.
In his report to Malacañang, Arranza said the group's operating and net incomes for 2012 were P145 million and P123 million, respectively, as compared to 2011 figures of P205 million and P156 million.
Arranza stressed that despite the continued drop of the price of crude coconut oil (CNO) in the world market, i.e., from US$ 1,650/MT (average in 2011) to US$ 1,042/MT (the average in 2012), the group still realized an operating income of P135 million in 2012.
Copra volume milled by the group increased by 45% from 295,138 MT in 2011to 429,184 MT in 2012. Total copra feedstock bought increased by 40% from 254,318 MT in 2011 to 355,549 MT in 2012, Arranza added.
"The substantial increase in the volume of copra feedstock purchases is a clear manifestation of the CIIF OMG's support for our coconut farmers and the coconut industry," he said.
The performance of OMG was attributed to its plant's increased utilization from 44% 2011 to 64% in 2012. This may be considered extraordinary considering that there is excess "crushing" capacity in the country today, Arranza said.
Arranza said that the group's exports in 2012 totaled 167,434 MT in coconut oil terms that translated to foreign exchange earnings amounting to $ 207 million.