Author
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Participant
Coach
 
 
Business start-up: 

The Coconut as a Revitalized Source of Raw Materials

Innovation for Coco-based Raw Materials

  • Coco mats and rope

    Coco mats and rope - 

    Textured mats and ropes from material manipulation experiments

My plan seeks to develop and market innovative raw materials and semi-finished components from the coconut that can be used for different products such as crafts, fashion, furniture, and for construction both for the local and export markets. Products include mattings, ropes, fibers, paper, buttons, loom weaving, and panels.

Facts

Year of establishment

2007

Sales (US$)
Two years ago:
Last year:
This year (forecast): 10,000
Year 2 (forecast): 15,000
Year 3 (forecast): 25,000
Net profit after tax (US$)
Two years ago:
Last year:
This year (forecast): 3,000
Year 2 (forecast): 5,000
Year 3 (forecast): 7,000
Total number of Employees
Two years ago:
Last year:
This year (forecast): 3
Year 2 (forecast): 5
Year 3 (forecast): 10

How do you expect this to be financed?

Own Contribution in cash 1,000
Loans (debt) 8,000
Shares in your company that you offer to investors (equity)
Other sources 1,000
Total finance needed (US$) 10,000

The Business

What is your product/service?

I will produce innovative semi-processed raw materials and semi-finished components made from different parts of the coconut. Products include mattings, ropes, fibers, paper, buttons, loom weaving, and panels.

These products are very much in demand in the local and export markets because manufacturers and buyers are always looking for something new. For example, when crushed bamboo was developed, people began using it for wall panels and eventually for furniture. Up to now, it is still being sold as a staple semi-finished component. This is also possible with coconut. My buyers will be manufacturers all over the country making different lines such as fashion, home accessories, and furniture because they can all use my products.

Coconut is available all-year round throughout the country especially in Mindanao (southern Philippines) where I will base the business. Mindanao also has an untapped potential for developing raw materials. Other regions have already experienced depletion of materials such as the abaca in Bicol and Mindanao still has an abundance of abaca for example. Luzon manufacturers (northern Philippines) are hesitant to buy from Mindanao due to freight costs. But with the raw material problems in the other regions, Mindanao now has a bright future in this aspect. That is also the reason I am concentrating in semi- finished products because they do not cost much to ship: they are mainly flat, light, and small items. Visayas manufacturers (central Philippines) such as Cebu where there is a dynamic manufacturing industry is also a potential market.

Existing producers in Davao, Mindanao will be tapped initially for production. Presently, the equipment and tools they have are enough but I can introduce machines for volume production. These producers are already skilled so teaching them other techniques will not be very difficult. I need around one hundred craftspersons initially in different areas in Davao because they will be a mix of home based and factory-type industries.

I will practice and instill sustainable harvesting and manufacturing techniques so I will ensure my buyers of regular supply without harming nature. Other regions that have material problems did not do this.

Explain how you will sell your product/service (marketing strategy) and how you will reach your customers (distribution strategy)?

I will make a catalogue and website and at the same time conduct an email campaign. I will rent a stand or go around to distribute leaflets during trade fairs. I will also directly contact my existing network of manufacturers and buyers and also give samples to my design colleagues who can integrate my materials to their designs.

I will offer a special raw material niche focusing on innovation such as playing around with textures, colors, shapes, and the characteristic of the materials itself, things that my competitors are rarely doing. They deal mainly with common raw materials such as bamboo, pandan, abaca, sinamay, etc. which are cheap and already used by everyone. Aside from that, some of their materials also have supply problems due to haphazard harvesting and they do not adhere to environment-friendly and fair trade practices. Their producers are based in Luzon and Visayas only. There is also no supplier who has a comprehensive offer on coconut as raw material. There might be small suppliers who can do some components such as coco shell buttons only. I can fill-in this material gap and eventually do more material combinations. I will also patent my developed materials.

What makes your business different/better than your competitors (competitive advantage)?

The coconut is still not fully tapped as a raw material source. I will concentrate on textures, colors, and unusual manipulation techniques such as slicing, crushing, etc. to make interesting effects. I will also give design support to my buyers so they can use my materials to enhance their products.

The Entrepreneur & Management

Describe the entrepreneur & management

I am an international design expert and have conducted consultancies in twelve countries. I have almost 20 years of experience and have attended numerous trainings in my country and abroad. I assist manufacturers to develop products not only in design but also in production and marketing. My network of experts range from skills training, quality control, costing, and marketing. As a designer, I have won design awards. I have undertaken intensive craft-based development programs for the EU, Oxfam, and Asia Fair Trade Forum.

I have experienced that people need time to absorb new technologies. Some projects I had have short time frames that full benefits were unrealized until much later. I will make sure that I will give enough time especially in the skills aspect because this is very important in production. I am expecting large volume orders so I need highly trained people who have the capacity to produce.

Development

How does your business improve the local living standards (social and environmental)?

I will be able to generate employment mainly in the countryside. Women can work in their homes especially in weaving and making components. Farmers will have extra jobs after harvest season through gathering and processing raw materials. Skilled artisans involved in handicrafts will have a steady source of income. I will develop the communities who will be involved in production by providing training and giving fair wages. In 2-3 years we can set-up cooperatives where more community development can be undertaken such as financial assistance, medical support, day care, etc. I am also looking at forging partnerships with companies offering complimentary products such as resins, paints, hardware, preservatives, and glues because we could also promote their products. In ten years we could build a factory with a warehouse for stocks and where primary processing, some finished products, and finishing can be done under one roof. Producers can get materials from this place and also deliver their products for quality control, finishing, and packaging. Eventually, we could also branch out into material combinations with coconut and develop other materials. We will also have more machines and tools in order to expand production and concentrate on R and D. This can be done by myself and in-house experts with producers also giving their ideas. We could eventually set-up satellite offices in major manufacturing hubs such as Manila, Pampanga, Cebu, and Bacolod. We will participate regularly in trade fairs and hold materials expo to create interest in our products. Eventually, we can branch out into export.

Needs
Network - business partners