Village-type Oil Mills

State of the Industry

• Following the anti-coconut oil campaign launched by soybean farmers and soya oil manufacturers, the coconut oil market has been depressed for a long time.
  
  
• Majority of Philippine coconut oil farmers live below the poverty line and are in deep debt. Many are leaving the countryside to look for jobs in the cities.
  
  
• Most coconut farmers have traditionally concentrated on producing low-value copra, unaware that they have better options.
  
  
• There are 17 vegetable oils and fats traded and coconut oil accounts for only 6% in the world market
  
  
• The Philippine supplies 65% of the worlds requirement for coconut oil
  
  
• Prices of coconut oil follow that of the other oils
  
  
• 90% of the Philippine coconut production is processed into oil, 10% to desiccated coconut, fresh nut, canned/tetrapak coconut milk and buko
  
  
• The market for coconut oil is part of a larger market for fats and oil. This is because coconut oil must compete with palm and palm kernel oil, soybean oil and even animal fats. In addition, for industrial usage in detergents, coconut oil must compete with petroleum-based products. And the Philippine exports less than 3% of the world's traded supply of fats and oils.
  
  
• Products derived from coconut earned an average of $760 Million in exports. Europe and the U.S. are the key markets for coconut products. Japan is the major destination for coconut shell charcoal and activated carbon.

The Good News ...
World demand for coconut oil is increasing due to coconut oil's high lauric fatty acid content for use primarily in detergent and cosmetic industries and the surge of demand for environmental friendly products.

• The Philippines is looking into the big market potential for coco chemicals like fatty alcohols and acids, methyl esters, tertiary amines, alkanolamides and glycerine. These products are used in various applications such as soap and detergent production.
  
  
• When further processed downstream, coco chemicals serve as ingredients in cream, shampoo, toothpaste formulations and other cosmetic products. Coconut chemicals are also used in the manufacture of lubricants, paints, plasticizers, textile and leather auxiliaries, cellophane manufacture, and explosives among others.
  
  
• We are also looking at enhancing the market for coco peat, geotextiles, and activated carbon among other coconut by-products. These have already found a market in Western Europe, particularly in the United Kingdom; and the demand is growing in the Middle East, South Korea, Israel, Australia, New Zealand, Greece, Japan nad the U.S.
  
  
• At the local front, we are pursuing the commercialization of coconut flour as well as greater use for coconut toddy or tuba, coconut sugar, coconut wood and wall cement boards.
  
  
• The medical benefits derived from coconut oil can be further enhanced to promote as a health food or nutraceutical.

The Program

We are encouraging coconut farmers and cooperatives, and also overseas Filipinos, to venture with us into village-type coconut oil processing mills.

These small, simple to operate mills will allow the processing of coconuts near the centers of production, reducing cost and ensuring freshness. The coconut mill will employ fresh mature nuts for better quality of coconut oil.

Fresh (virgin) coconut oil (aka VCO) can be produced easily on this scale, and without the added processes of drying coconut meal into copra and refining/bleaching the oil. VCO does not require refining and bleaching.

Each oil mill is expected to be able to process up to 2,500 nuts a day, which translates to a monthly production of about 4 tons of VCO. The oil produced can be sold to our sister company Daila Herbal Community Enterprises (DHCE), to the community for local needs such as cooking oil, or commercially for the health food market or even export.

Benefits of Virgin Coconut Oil

The Health Benefits of VCO

• Reduces risk of atherosclerosis and heart disease.
• Reduces risks of cancer and other degenerative conditions.
• Helps prevent bacterial, viral, and fungal (including yeast) infections.
• Supports immune system functions.
• Supports healthy metabolic function.
• Provides an immediate source of energy.
• Helps control diabetes.
• Supplies fewer calories than other fats.
• Is heat resistant (the healthiest oil for cooking).
• Helps keep skin soft and smooth.
• Helps prevent premature aging and wrinkling of the skin.
• Functions as a protective antioxidant

What VCO Does Not Do

• Does not increase blood cholesterol level.
• Does not promote platelet stickiness or excessive blood clot formation.
• Does not contribute to atherosclerosis or heart disease.
• Does not contribute to weight problem.

Byproducts

Production of coconut oil will give us several by-products which can be processed by the farmers themselves to give their crop an added value. Expected byproducts are:

• white copra meal
• protein meal or “latik”
• coconut water
• coconut vinegar, etc.