News Details

Gov’t Reviews Possible Sale of Cocochem as Global Demand for Coconut Products Rises

NPO

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10 hours ago

SAN PASCUAL, Batangas — The government is reassessing the planned sale of United Coconut Chemicals Inc. (Cocochem) amid renewed global demand for coconut-based products, Agriculture Secretary Francisco P. Tiu Laurel Jr. said following an inspection of the facility on Monday.

Tiu Laurel led an ocular visit to Cocochem’s complex in Batangas as part of a fact-finding effort to determine whether it remains viable for the government to retain and operate the asset or proceed with its long-proposed divestment.

“We want to see for ourselves whether it still makes sense for the government to continue operating this chemicals and oleo fats facility, especially with the growing demand for coconut products, particularly in Europe,” Tiu Laurel said.

The government, through the Land Bank of the Philippines, is currently offering around 682 million common shares of Cocochem for sale, with an expected return of at least ₱2.82 billion. Proceeds from the sale are intended to support coconut farmers, while private investment could potentially revive or repurpose the asset in line with evolving market conditions.

Once a Regional Leader

Established in 1981 by former President Ferdinand E. Marcos Sr. and Ambassador Eduardo M. Cojuangco Jr., Cocochem was once the largest coconut chemicals and oleo fats producer in Southeast Asia. It was also the region’s first facility to manufacture fatty alcohols using German-engineered Lurgi technology.

The complex includes a private jetty capable of accommodating vessels up to 35,000 deadweight tons—an advantage that supported its export-driven growth. By 1986, Cocochem was exporting to major markets including the United States, Europe, Japan, China, South Korea, ASEAN countries, India, Australia, New Zealand, South Africa, and the Middle East.

However, challenges emerged over time. In 2001, the failure to implement Executive Order 259—which required the use of fatty alcohols in local detergent production—reduced domestic demand. A decade later, soaring coconut oil prices, which outpaced palm kernel oil prices, further eroded the company’s competitiveness. Plant operations were eventually halted in 2012.

Shift to Property and Services

In 2014, Cocochem transitioned from manufacturing to a facilities-based business model. Today, it generates income from land leasing, storage and warehouse rentals, power distribution, wastewater treatment, pier and weighbridge services, water supply, and housing rentals.

Operating across a 39-hectare property, Cocochem’s revenue is now derived mainly from Cocochem Agro-Industrial Park Inc., which accounts for 53 percent of income, followed by Cocochem’s own operations at 44 percent, and residential services at 3 percent.

Strategic Review Underway

With European demand for coconut derivatives rebounding, the government is reassessing whether retaining Cocochem as a strategic asset could better serve the long-term interests of coconut farmers and the industry as a whole.

“The question now is whether keeping this asset under government ownership would generate greater value for our coconut farmers, given changing global market conditions,” Tiu Laurel said.

The review is expected to guide the government’s final decision on whether to proceed with the sale or reposition Cocochem as part of a broader strategy to strengthen the Philippine coconut industry.

— NPO News Team | PNA