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How to Build Better More: Solar power and agri consolidation


(Part 4)

Considering that Spain is one of the top European countries when it comes to such renewable energy sources as solar and wind, we included in the agenda an additional presentation on a specific investment case of solar energy in off-grid areas like some islands in Palawan.

Representing WEnergy Company from Singapore, Quintin Pastrana shared with the audience his company’s renewable energy project in Palawan in which a microgrid system is being used. He described how his company is building modular solar plants in remote areas that are not part of a grid.

Palawan has some 1,200 islands, many of which are very attractive for beach tourism. It must be recalled that the Philippines has been adjudged as being the best beach destination in the world and Palawan as the best resort island in the world. What WEnergy is doing, therefore, can help the Philippines to truly be the “Spain” of the Orient.

It is well known that Spain is the No. 1 country in Europe when it comes to the number of tourists visiting (surpassed only by the religious tourism of France because of Lourdes). At any given year, there are more foreign tourists in Spain than the domestic population.

Mr. Pastrana complemented the earlier overall presentation on the energy sector by Guido Delgado (former head of the National Power Corp. during the administration of Fidel Ramos and now a leading energy executive) by presenting modular solar plants as the solution to the lack of electricity in key remote areas that have great potential for tourism, mining, and other productive investments in far flung regions within the Philippine archipelago’s 7,600+ islands.

He described his company’s successful project near the famous underground river in Puerto Princesa, Palawan. After they installed a modular solar plant there, a five-star hotel was built enhancing significantly the tourism potential of this natural resource. He presented a forecast showing that total solar and wind energy production can reach as high as 15 GW by the year 2030.

As regards large-scale agribusiness ventures, Christian Moeller — CEO of Lionheart Farms, also in Palawan — shared information about his innovative project in consolidating small coconut farms to attain economies of scale in manufacturing high-value products from coconuts. He was upfront enough to warn the potential investors that large-scale farming takes time to obtain adequate returns on the needed investments. In the case of Lionheart Farms, it took seven years before they reaped what they had invested.

He pointed out, however, that over and above the economic profitability, the most important impact of this agribusiness venture was the significant improvement in the lives of the entire community of small coconut farmers, who included some of the indigenous people of Palawan. In fact, the Lionheart Farm model is being considered by none other than President Ferdinand Marcos, Jr. — who is concurrently the Secretary of Agriculture — as a possible model for the very important strategy of consolidating millions of small coconut farms into larger units to attain the necessary economies of scale to be able to come out with high-value food and other products from the coconut tree. It is about time that we shift our production of manufactured coconut products from the very low-value copra and coconut oil to higher-value coconut products like coconut sugar, coconut water, coconut milk, and coconut coir, among others.

There is an ongoing plan to replicate the Lionheart experience in at least five other coconut regions and to scale up the size to 5,000 hectares in each site. The interest of the President in this model is so keen that during the roadshow, Mr. Moeller was recalled to Manila and could not join the Barcelona portion of the business-to-business meetings.

Fortunately, digital technology made it possible for him to record a video of his presentation and we were able to show it at the IESE Business School campus in Barcelona. This was providential since the region of Catalonia, whose capital is Barcelona, is well known for high-value agribusiness ventures. In fact, one of the Filipino entrepreneurs who helped in the organization of the roadshow, Martin Lorenzo, has a major business importing high-quality pork products from Catalonia.

The last speaker at the roadshow was Cesar Averia, the CEO of EDI-Staffbuilders, a human resource company. Mr. Averia addressed a critical problem of the Spanish economy, which is a shortage of young workers. Spain has one of the lowest fertility rates in the world at 1.3 babies per fertile woman.

The shortages are especially acute in the hospitality and health sectors. He presented vital information about the human resource endowments of the Philippines, one of the few emerging markets in the Indo-Pacific region with a young, growing, and highly literate (especially in English) population. He assured the Spanish businesspeople that both at the level of managers and workers, the Philippines can adequately supply Spain with the needed qualified human resources, not only for its domestic requirements but also for the many projects that Spanish infrastructure companies are undertaking in other parts of the world, such as in the Middle East. He shared the impressive record of EDI-Staffbuilders since the 1970s in providing manpower support to key global firms which include a leading Spanish conglomerate, OHLA.

To cap the presentations, a top executive of Acciona — one of the largest infrastructure firms in Spain — described the company’s experiences in building major infrastructure projects in the Philippines.

Acciona was part of the consortium of firms (together with DMCI, among others) that built the longest bridge in Central Visayas — the bridge connecting the municipality of Cordoba with Mactan. It is also part of the consortium building the train system from Clark to Bulacan. Another potential project that Acciona may be part of is the bridge that will connect Cavite to Bataan, passing through the island of Corregidor. 

It was encouraging to the other Spanish infrastructure firms who attended the roadshow to listen to the presentation of a Spanish firm that has succeeded in carrying out some major projects in the Philippines, despite the usual bureaucratic and other obstacles faced by foreign investors in the Philippines.

The most productive portion of the roadshow — both in Madrid and Barcelona — was the business-to-business meetings that followed the plenary sessions. Only time will tell how many of these potential strategic alliances will result in actual FDIs flowing into the Philippines. We are sure, however, that the roadshow has brought us closer to a higher inflow of FDIs than the mere declaration of interests and pledges to invest that follow every Presidential trip.

I have described the roadshow in great detail because I want to encourage other private initiatives of Philippine enterprises — working with private chambers of industry and think tanks — to organize similar trips to countries like South Korea, Japan, the United States, Germany, the Netherlands and other developed countries that have long-term capital, technology, and managerial expertise to help us in our Build More Better endeavors. I am sure such private initiatives will always find their counterparts in the public sectors who can help in identifying potential business partners on both sides of the strategic alliances being sought. 

Fortunately, in the case of Spain, we were able to identify a most cooperative group in the persons of Ambassador to Spain Philippe Lhuillier; Consul Monika Limpo in the Spanish embassy of Madrid; Consul General Maria Theresa Lazaro of the Philippine Consulate in Barcelona; Silvia Torices, Economic and Commercial Counselor of the Spanish Embassy in the Philippines; and Primo Santos, Jr. of the Economic and Commercial Office of the Spanish Embassy in the Philippines. We also received much help from the IESE Business School in Spain, especially from Natalia Centenero. Last but not least, let me thank Federick Go of the Office of the Presidential Adviser on Investment and Economic Office, who provided us very valuable contacts with Philippine businesses with interest in striking strategic alliances with their counterparts in Spain. I hope we can continue to work with him in our future roadshows to other countries that can be sources of FDIs for the Philippines, especially in those three sectors of infrastructure, renewable energy, and agribusiness ventures.

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

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