"Rebuilding the U.S. Soymeal Market in the Philippines"-Page 1 of 2

"U.S. market share began to decline in 2001, as traditional U.S. soymeal suppliers among the multinationals shifted their focus to supplying out of their South American facilities, and at significantly lower prices," said ASA Philippines Marketing Manager Ted Cortes. "But last year brought about a dramatic turning point as U.S. soymeal sales more than doubled."

During Marketing Year 2004/05, the Philippines purchased 471,000 metric tons of U.S. soymeal, up 111 percent from the previous last year. With an export value of more than 95 million dollars, the Philippines ranked as the third largest customer for U.S. soybean meal.

The Republic of the Philippines consists of more than 7,000 islands with a population of almost 90 million people. View larger map. (ASA Map Illustration by Russ Robinson)

A combination of factors contributed to this dramatic increase, including a sizeable U.S. soybean crop; customer preference for the quality and reliability of U.S. soymeal; and the market-building and technical service activities of the American Soybean Association. Aggressive marketing efforts by Ag Processing Inc and its Philippine agent, MCM Enterprises, were effective in promoting soymeal exports from AGP’s terminal at Grays Harbor in the Pacific Northwest.

To find out more about the factors that contributed to this success, ASA spoke with soy meal importers, feed mill operators and farm managers in the Philippines. (Text continues below video links.) 

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Part 1 – Following a brief program introduction, listen to comments from Ric Pinca, Executive Director of the Philippine Association of Feed Millers; then visit with Maria Marte, President of MCM Enterprises, AGP’s local marketing representative for the Philippines; Nicole Sarmiento, Special Assistant for Procurement at the Vitarich company; and Tita Chua, VP for Sales & Marketing at Simon Enterprises. Runs 00:22:39

Part 2 – Visit King’s Swine Farm and listen to comments from Owner & General Manager Minton Quan; then visit the Gazel Poultry Farm and listen to comments from Farm Owner Rey Celestial and Contract Growing Manager Arnold P. Anorico of Sustamina Agri-Industrial. Then in Cebu, listen to comments from Elenita De Manuel, Nutritionist & Co-owner of Universal Feed Mill; and Selpha Trinidad, Animal Nutritionist & Owner of Cebu Superior Feedmill. Runs 00:21:41

Part 3 – Visit an aquaculture farm in Dumaguete and listen to comments from Resources Production Technology President Peter Uy Tingni. Then in Mariveles, Batan, visit with Sean Perez, Vice President-Domestic Terminal Division of Asian Terminals Incorporated; and at the new Nation Granary in Sariaya, listen to comments from Terminal Manager Gisberto Beringuela and ASA Philippines Country Manager Ted Cortes. Runs 00:19:06

Soymeal Purchasers

"One thing that made us decide on buying soybean meal from the U.S. is really the consistence and quality," said Ric Pinca, Executive Director of the Philippine Association of Feed Millers. "As feed millers, it is necessary for us to make sure that what we bring in [to the Philippines] would conform to the standards and the specifications that our nutritionists require for our own products. We have found out through the years that as far as consistency is concerned, nothing compares to what comes out of the United States."

Pinca cited the technical assistance provided by the American Soybean Association and the dependability of U.S. soymeal suppliers as factors that were also important to the buying decision. Pinca said that AGP’s Terminal 2 at Grays Harbor came at a time when the industry needed to look at the economics of their purchasing. Compared to shipments from the U.S. Gulf, which take about 40 days, shipments from Grays Harbor only take about 20 days, which has reduced shipping time and lowered freight costs for Pacific Rim customers.

"It was attractive for us to purchase U.S. soymeal because of the consistency, uniformity of particles, and because it has the lowest fiber content," said Nicole Sarmiento, Special Assistant for Procurement and third generation family-manager at the feed company Vitarich.

Sarmiento said that last year was the first time that she personally purchased U.S. soymeal, and that she did so following participation in an educational program that provided her with an opportunity to visit the Port of Grays Harbor, the Chicago Board of Trade, and U.S. soybean farms.

"I saw a lot of opportunity to do business with AGP," Sarmiento said. "I saw that there wouldn’t be problems with the timeliness of deliveries [or] any problems with adulteration of the goods."

Sarmiento said that she was impressed with the high technology and efficiency she witnessed at Grays Harbor, which gave her confidence in her buying decision.

"I could see how proud [U.S. soybean farmers] are in the business that you are in," Sarmiento said. "I guess we all share the same values of running a family business."

And at Simon Enterprises, another Manila-based feed and animal health company that has been in business for almost 50 years, Tita Chua, the Vice President for Sales & Marketing, said," the American Soybean Association has done a very fantastic job. They have done a lot of good marketing, seminars, technical information and explanations that really helps a lot. American Soya has covered extensively all areas for promoting the product and we’re very satisfied."

ASA Technical Manager-Animal Nutrition Basilisa Reas (left) and Universal Feed Mill Nutritionist & Co-owner Elenita De Manuel display one of the company’s feed bags. (ASA photo by Bob Callanan)

Feed Millers

About an hour’s flight south of Manila is Cebu, the second largest city in the Philippines. It is here that ASA visited with two performance-conscious feed mill companies to learn about the importance of quality soymeal.

At the Universal Feed Mill Corporation, Nutritionist & Co-owner Elenita De Manuel, said, "When we started the business, we were only using U.S. soybean meal because that was the only one in the market. Then there was Indian soya in the market, and then China soya, and then Brazilian, but mostly we get U.S. soybean meal. Because of the rations that we produce, I would really prefer the U.S. soybean."

Manuel said the reason Universal cannot buy U.S. soymeal all the time is because it is not always available. Sometimes they can only purchase what the traders have to offer.

"There was a time I even had to hoard my U.S. soya, just to make sure that I will have enough supply for, what I would call, my sensitive rations," Manuel said. "The reason I prefer U.S. soybean meal over the other soybean meal in the market, is that of the quality. Next is the availability, and [then] the price."

Manuel said that when the Subic Group was formed, they were getting U.S. soymeal early in the year, up until May, but in the later part of the year 2005, the group was again buying Argentine meal because of the price difference. But more recently, Manuel has been able to purchase some containerized shipments of U.S. soybean meal.

"We were even offered $30.00 off [per ton] if we would switch to Argentine soybean meal, and I think most of the members of the group did not agree to that. I, for myself, informed the group that if they’re not going to get U.S. soybean meal, then I will not join the group in getting importation."

Not far away, ASA visited with Selpha Trinidad, Animal Nutritionist & Owner of Cebu Superior Feedmill, who also raises animals on her own farm.

"I believe that U.S. soybean meal has better quality in terms of the performance of the animals," Trinidad said. "We get higher revenues if we use U.S. soybean meal on my farm. My customers are so happy because when I say it’s U.S., dehulled, 48 percent protein soybean meal, it’s really 48 percent."

Trinidad said that beginning in early 2000-2001, there was decline in the use of U.S. soymeal due to the influx of soybean meal coming in from South America.

"People thought before that it’s the same, that U.S. and these South American meals, but lately, they found out that it’s not the same at all," Trinidad said. "They found out that using the soybean meal from South America would produce a more inferior result compared to using U.S. soybean meal. So in this way, they have discovered for themselves, that U.S. soybean meal is more superior in terms of quality. So we have seen an up trend or increase in use of U.S. soybean meal lately."

Trinidad provided an example of a local customer who used meal from South America. After awhile, he noticed that the performance of his animals had declined, and he contacted Trinidad to find out what was causing the problem.

"I told him that [it was] because of the quality of the soybean meal that he was using," Trinidad said. "I told him ‘people can lie, but animals will never lie.’ So the next time around, when I sold him U.S. soybean meal, he did not bargain about the price, he just bought it right away."

When asked how the ASA could help in the future, Trinidad suggested that ASA should conduct training programs for nutritionists to teach them how to convince the purchasing manager, or whoever is making the final purchasing decision, to buy more U.S. soybean meal because its higher performance is really a better value.

Sponsored by AGP. Visit AGP at http://www.agp.com/
Photographs and video copyright © 2006 The American Soybean Association by Bob Callanan
No funding from either the Soybean Checkoff or USDA’s Foreign Agriculture Service 
was used in the production or distribution of these materials.