1 month ago
12
February 12, 2025 | 12:00am
MANILA, Philippines — The Metro Pacific Group is jumping into another venture in the agriculture sector, this time eyeing a P1-billion buyout of one of the world’s oldest manufacturers of coconut products.
Sources told The STAR that Metro Pacific Agro Ventures Inc. (MPAV) is planning to acquire 100 percent of Franklin Baker Co. for P1 billion to save its facilities from closing down.
If the deal pushes through, the Metro Pacific Group – led by Manuel V. Pangilinan – will become one of the country’s biggest players in coconut processing.
The move will also add to Pangilinan’s growing portfolio in agriculture, composed largely of ventures in the coconut and dairy industries. Pangilinan, through MPAV, is spending more capital on food production to boost domestic supply and reduce import dependence.
The board of MPAV’s parent Metro Pacific Investments Corp. (MPIC) will meet next week to decide on the proposed buyout of Franklin Baker. A source said nothing is final as yet, as MPIC is still looking closely into the costs and benefits of the deal.
However, the source said Pangilinan is interested in what Franklin Baker could bring to the table for MPAV, especially as it owns three processing facilities: two in Davao del Sur and one in Laguna.
Currently, Pangilinan engages the coconut industry through Axelum Resources Corp., which the Metro Pacific Group acquired a 34.76-percent stake in for P5.3 billion in 2023.
Axelum ships processed coconuts in more than 30 markets and develops a variety of products such as coconut cream, coconut milk, coconut water and desiccated coconut.
As for Franklin Baker, the company has been engaged in coconut processing for over 130 years, or since 1894. Primarily, Franklin Baker manufactures desiccated coconut, but it also sells coconut water, sweetened coconut, toasted coconut, among others.
Market-wise, Franklin Baker exports coconut goods to food makers in more than 50 countries in North America, Latin America, Europe, Middle East, Africa and Asia Pacific. Further, it boasts some of the highest certifications on food quality and safety.
However, Franklin Baker has struggled to sustain its operations financially, and it has gone to the buyout market seeking potential investors that could help it stay afloat.
Based on a November 2024 report from UK-based Chelmer Foods Ltd., Franklin Baker has shut all three of its factories temporarily, affecting coconut supply worldwide until this year.
Chelmer Foods also said coconut processors in the Philippines like Franklin Baker are grappling with the impact of La Niña, which is causing flooding and, thereby, damaging production.
Data obtained by The STAR showed that Franklin Baker has the capacity to manufacture at least 75,000 metric tons of desiccated coconut in a year through its processing facilities. At this rate, the company can account for 43 percent of coconut exports last year at 173,000 MT.
Sources in the coconut industry said Pangilinan would also make the right move if he proceeds to add Franklin Baker to his portfolio. They said the tycoon would get support from the government itself through its program to plant 100 million coconut trees until 2028 to increase local output.
“This is a wonderful move from Pangilinan since there is a surge in demand for various coconut products due to its health benefits, as well as its contribution to decarbonization through blending of coconut methyl ester with diesel,” a source said.
Preliminary data from the Philippine Statistics Authority showed that coconut oil exports rose by 86 percent to $2.19 billion last year, from $1.18 billion in 2023.
Further, exports of desiccated coconut grew by a fifth to $296 million, from $247.25 million, as a result of rising prices in the international market.
