News & Update

Accelerating the Development of a Low-carbon Industrial Park in Mindanao, Philippines

Since 2013, Chodai have been promoting the development of Taguibo Industrial Park in Butuan city, Mindanao Island, the Philippines. The Taguibo Agro-Industrial Zone Corporation (hereinafter, "TAZC"), a special purpose company for this industrial park project, already holds an industrial park development permit, has completed its registration examination  under the Philippines Economic Zone Authority (hereinafter, "PEZA") on July 28, 2017.

The Taguibo Industrial Park will serve as the place for processing and shipping of agricultural, forestry, and fishery products produced in the Caraga region in Mindanao Island. It will utilize the stable supply of electricity and industrial water from multiple renewable energy projects and water supply concession projects that we are concurrently undertaking. It will be developed as a low-carbon industrial park with our local business partners, Equiparco Construction Company (hereinafter, "Equiparco") and Twinpeak Hydro Resources Corporation (hereinafter, "Twinpeak")   

When PEZA Director General Charito B. Plaza assumed the position last September, she expressed her commitment to promote the development of a special economic zone in the northeastern part of Mindanao Island (Caraga region), and this project is in-line with Philippine's measures and policies.

Located in the northeastern part of Mindanao Island, the area is excellent in terms of access to Manila and Cebu, the two major consumption areas in the Philippines which consider Mindanao as their food basket. Moreover, the area also has a geographical advantage of serving as the gateway for shipping to Japan and to other Asia-Pacific countries. 

Butuan City, where the planned development site of the Taguibo Industrial Park is located, is the hub of the Caraga region and the junction of the national highways linking Davao City, Cagayan de Oro City, and Surigao City.

The proposed development site is located in the Taguibo district in Butuan City, designated as an industrial zone in the city's land-use plan. About 60% of the total development area of 141 hectares has already been acquired, and plans to expand it up to 200 hectares in the future.

The Caraga region has a population of approximately 2.6 million (Philippines Statistics Authority, 2015), with an annual growth rate of 1.2%, has an abundant workforce, and an educational system wherein students learn the English language from primary school which makes most workers capable of communicating in English.

In addition, about 95% of the population are Catholics which makes the risk of religious conflicts extremely low.

The key industries in the region are agriculture, forestry and fisheries. In terms of forest industry, it is the largest producer of timber in the country (producing 70% of the country's total production) with production volume reaching up to 590,000 metric tons annually (Philippine Forest Management Bureau, 2015). In terms of agriculture industry, approximately more than 2 million metric tons of crops are being produced annually (Philippine Statistics Authority, 2014) with coconut, rice, banana, oil palm, and corn being the main agricultural products.

In the aquaculture industry, the production value has reached about 650 million Philippine pesos (Philippine Statistics Authority, 2015) producing mainly, milkfish, black tiger, seaweed etc. Moreover, the country's first full-scale eel cultivation business (producing about 200 metric tons annually), which has Japanese investment, is also in operation.

The Agusan River, the third largest river basin in the Philippines with a catchment area of 10,921 sq. km. runs through the center of the Caraga region wherein the Taguibo Industrial Park is located. The Taguibo River, which is located in the upstream of the proposed development site, runs through the area wherein we are promoting a small hydropower projects and a water supply concession project. This ensures the Taguibo Industrial Park secured of stable electricity power supply and abundant water resources.

There are a total of 358 PEZA-approved Special Economic Zones (SEZ) that are currently operating in the Philippines, 34 of which are operating in Mindanao Island. Of the five industrial zones categories, the Taguibo Industrial Park is classified as an "agro-industrial park". There are currently 13 agro-industrial parks in operation in Mindanao Island, most of which are located in the Northern Mindanao Region (Region X) centered in Cagayan de Oro City and Iligan City, Davao Region (Region XI) centered in Davao City, and in Soccsksargen Region (Region XII) centered in General Santos City. Tagibo Industrial Park is the first agro-industrial park in the Caraga region (RegionXIII). 

In the Caraga region, the basic infrastructure for electricity and water supply has not been fully developed due to small amount investments from both the public and private sectors. As a result, the core industries have not grown yet, and there has been a severe shortage in employment resulting in poverty and outgoing migration of human resources from this region.
The biggest challenge was that some of the most competitive products from the agricultural, forestry, and fishery sectors were being shipped out to other regions without increasing the market value of the product within the Caraga region. These products were not effectively utilized for the economic development of the Caraga region. In this context, the Taguibo Industrial Park project is expected to employ up to 50,000 direct employees and up to 250,000 employees including the effects of indirect employment. We believe that this project will make a significant contribution to reducing poverty and preventing the migration of human resources through job creation.

To date, the Overseas Construction Association of Japan (hereinafter, "OCAJI") has conducted a survey on the current status of logistics infrastructure development in and around the Taguibo Industrial Park as part of the "Butuan City, Mindanao, Philippines, Special Economic Zone and Surrounding Infrastructure Development Plan Study (2015)". Furthermore, the Ministry of Economy, Trade and Industry (METI) has conducted a study about the introduction of high-quality Japanese water infrastructure materials and equipment for industrial parks under the "FY2016 Energy Infrastructure System Overseas Development Promotion Project". In order to take advantage of these support, we plan to proceed on developing our projects with the goal of establishing Japanese presence in the overall business aspect such as support from the Japanese government, involvement of Japanese companies, and utilization of Japanese technology, equipment, investment, and operation.

To date, we have been working on Mindanao Island, a region where employment shortages and peace issues are deeply rooted. Together with our local business partners, Equiparco and Twin Peak, we were able to contribute to the regional economic development of Mindanao, mainly in Butuan City and Northern Agusan province through a variety of businesses that created several opportunities in the locality. 

We will continue to promote our businesses in line with the Japanese government's promotion of high-quality infrastructure exports and the establishment of a low-carbon society. Through low-carbon economic development, we would like to contribute to mitigate the challenges for  global warming, the achievement of greenhouse gas (GHG) reduction of Japan and the establishment of peace in Mindanao.