Government reviewing Cocochem sale as global market rebounds

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December 26, 2025 | 12:00am

MANILA, Philippines —  The government is reviewing the sale of state-owned shares in United Coconut Chemicals Inc. (Cocochem) amid the resurgence in global demand for coconut-based products, the Department of Agriculture (DA) said.

Agriculture Secretary Francisco Tiu Laurel Jr. recently conducted an ocular inspection of the facilities of Cocochem, which he described as a “fact-finding exercise” ahead of a review of the government’s decision to sell the factory.

Tiu Laurel said he wanted to see first-hand if continuing the operations of the Cocochem, which was once a dominant player in the global coconut industry, would be more beneficial to coconut farmers than selling the facilities which has been planned long ago.

“We want to see for ourselves whether it still makes sense for the government to continue operating his chemicals and oleo fats factory given the rising demand for coconut products, particularly in Europe,” Tiu Laurel said.

The government through the state-run Land Bank of the Philippines is tendering about 682 million common shares of the company to raise at least P2.82 billion.

The proceeds of the sale are meant to support coconut farmers while opening the opportunity for private investors to revive or repurpose the assets of the firm in line with “shifting” market conditions, according to the DA.

Cocochem was established in 1981 and was once considered as the largest coconut chemicals and oleo fats factory in Southeast Asia, the DA said.

The DA added that the firm was the first in the region to produce fatty alcohols via the fatty acid route using German-designed Lurgi technology.

The firm’s complex also features a private jetty capable of handling 35,000-deadweight-ton vessels, a logistical advantage that supported its export-driven growth, according to the DA.

By 1986, Cocochem was exporting to the United States, Europe, Japan, South Korea, China, ASEAN member-countries, India, Australia, New Zealand, South Africa and the Middle East.

However, a series of setbacks ensued in the following years that hampered the operations and growth of Cocochem, the DA explained.

The DA pointed out that the non-implementation of Executive Order 259, which mandated the use of fatty alcohol in local detergent products, curtailed the domestic demand for fatty alcohol that Cocochem produces.

“A decade later, record-high coconut oil prices, trading at a significant premium over palm kernel oil, undermined competitiveness against ASEAN rivals. Plant operations were shut down in 2012,” the DA said.

“The company subsequently shifted gears. In 2014, Cocochem transitioned from manufacturing to a facilities-based enterprise,” the DA added.

Cocohem generates income today through land leases, storage tank and warehouse rentals, power distribution, wastewater treatment, pier and weighbridge operations, dockage fees, water supply and housing rentals.

“Operating across 39 hectares, Cocochem’s revenue mix reflects this pivot: Cocochem Agro-Industrial Park Inc. contributes 53 percent of annual income, Cocochem itself 44 percent and residential operations the remaining three percent,” the agency said.

“With European demand for coconut derivatives gaining traction once more, the government’s review raises the question on whether coconut farmers interest would be better served if the state hold on to a strategically located asset,” the DA said.