From a group of 5 foodies and the 6th joins for FREE. This special treat is only offered on April 21, 2012, Saturday.

Wilma Catayan’s one great frustration was never having obtained a college degree. She had worked as a full-time house helper to see her from high school to college, served as a cashier at her amo‘s store and mustered enough energy to attend night school. Her perseverance took her no further than second year college.

Wilma later married a jeepney driver and bore six children “one after another.” Though her husband is sometimes out of work, the couple manages to keep five of their six children in school. The eldest is now in second year college and the second child a first year college student but temporarily out of school to work.  Wilma thanks Womenkraft, the handmade paper project which enables her to become the family’s main breadwinner.

Wilma is one of six women who produce handmade paper in Barangay Katipunan, Panabo, Davao Oriental. The group turns out 100 sheets a day for Katakus, its partner NGO. Katakus converts the paper to greeting cards, stationery, albums, picture frames, lampshades, decorative boxes and other gift and novelty items. Katakus also handles product development and marketing.  Half of the products make their way to Japan and the Netherlands while the rest is sold in Davao City.

“Paper making has really made a difference in our lives,” says Veronica Mahinay, leader of the group. “That’s why we’re doing everything we can to make quality paper and make our customers happy. When there are rush orders, we work till nine at night to meet delivery deadlines. That way, customers won’t think of getting their paper somewhere else.”

From project to village enterprise

Womenkraft is based in Barangay Katipunan, which is part of Panabo City and only 40 kilometers north of Davao City, the third largest urban center in the Philippines. Yet the road leading to this village is unpaved and dusty. Jobs are hard to come by. If you’re between 18 and 35 years old, you can try to find work as a packer or harvester in banana plantations that are expanding on that part of the land. If you don’t own a piece of land, you can get hired as farm labor during the planting and harvest seasons. Anytime between that, you leave up to God and sheer determination.

Womenkraft is one of the few job opportunities available. Unlike many income generating projects that folded up after three years (the average funding cycle of foreign donors), this one bloomed from project into a village enterprise since it started in 1994.

Devlink, a now defunct NGO, introduced the women of Katakus and Womenkraft to the art of paper-making. “Devlink was then looking for communities to supply raw materials for handmade paper,” recalled Betty More, executive director of Katakus (Kababayen-an Alang sa Teknolohiya nga Haum sa Kinaiyahan ug Kauswagan, or Empowering Women through Appropriate Technology in Harmony with the Environment). Katakus organizes farmers and women for sustainable agriculture.

“Because we had no funds then, Devlink gave the women P5,000 to start the project,” Betty said. “Devlink also became the project’s first customer.”

Initially, production was on-and-off and technology at its crudest. The women beat the raw fibers (cogon and banana bractsljh) using mortar and pestle, and dried the paper under the sun. “It was hard work, we were always wet,” says Veronica Mahinay, “but we hoped to earn so as not be totally dependent on our husbands.”

”Later the women came and asked that papermaking be a joint project between the mothers and Katakus, ” says Betty. Womenkraft focused on making the paper, while Katakus handled product development, marketing and financial management. The enterprise has its own marketing officer, purchaser/admin staff and production staff.

Katakus maintains a small shop in its Davao City office where 15 piece workers turn the paper into various gift and novelty items. Lovey Atol, who works at the card-making section, earns P700 a week, which “is not bad, considering that I used to be jobless and out of school. I also appreciate the skills I’ve learned, like designing.”

Lovey is also involved in sales. “Foreigners appreciate our products but Filipinos often say they’re expensive. I tell them it takes painstaking work to produce,” she said, showing by example a card adorned with petals as small as rice grains glued on the paper. “Besides if you buy our products, you also help out of school youth and the mothers who make the paper.”

Networking for a market and resources

Katakus tapped its growing network of partners to develop a market for the paper. Canada Fund, the Philippine Global Exchange in Manila and Handmade Treasures, a cooperative of handicraft producers in Davao, provided enough business to enable the women to earn and roll over the funds.

The project also attracted donors. The local government donated cement and gravel to improve the workplace, which was just an open shack that the women “borrowed” when it wasn’t being used as a people’s organization’s meeting place. A local legislator donated a washing machine for washing paper pulp. Other donations enabled the group to procure a dryer (P32,000) and a beater (less than P10,000).

Such support was extended not merely out of charity but in recognition of the group’s determination to make the project work. Womenkraft has been featured six times on local and national television. The local government in Panabo is proud of the project; it brings visitors to the area to showcase the handmade paper as a product of Panabo.

Womenkraft also proved that determination leads to quality work. In 1996, the group won the second “Best Product Award” in the Canada Fund Trade Fair and Exhibit in Manila. The group also bagged first place at the regional level and third place at the national level for TESDA’s “Best Practice in Community-based Training and Enterprise Development Implementation.”

“The TESDA award came with a P30,000 prize money which we used to improve the workplace and get us electrical connection,” says Veronica. “By that time, we had acquired equipment and didn’t have to do heavy manual work anymore.”

A “woman-friendly” workplace

“When we visited a paper making project in Davao, we saw that the system was not women-friendly,” says Betty. “So when we were having the presser and dryer made, we asked the contractor to make these easy for women to operate.” With inputs from Katakus and the women workers, the contractor fabricated equipment that suited the women’s height and strength.

Even Juanita Galgo, petite at five feet and 35 kilos, says “I find the equipment quite easy to operate.” “These speeded up their work,” Betty adds.

Though the women observe an eight-hour-a-day five-day workweek, they are still able to help their husbands during the planting or harvest seasons. “They ask permission from the group so arrangements for substitutes can be made,” says Betty. “There has been minimal conflict or interruption at work. But we also stress that production should not be disrupted because we have quotas and deadlines to meet. The group holds monthly meetings to assess their work and they meet with Katakus every six months.”

More equitable relations at home

Seminars such as gender consciousness have helped the women improve family relations, which was affected when they started spending eight hours a day outside their homes to work. That meant women had less time to do their household chores.

At first, some of the husbands complained: since their wives started working at the paper enterprise, they would come home hungry from the farms only to find the pots and pans empty. The wives were out making paper instead of cooking.

As the women began contributing more and more for household expenses (around P3,000 to P4,000 a month), husbands and children showed support by taking on domestic chores that they previously regarded as the mother’s or wife’s sole responsibility.

Carlito Galgo, husband of Juanita, said he got a lot of teasing from male friends who said, “You not only do household chores. Now, you even bring your wife’s lunch to her workplace.” But the jokes have stopped. Carlito, together with Anastacio Llorente, earn P500 to P600 a week for gathering and bringing the firewood to Womenkraft.

Marciana Llorente recalls that before she became a paper maker, she was sickly, spending most of her days sleeping off a depression that hit her when her eldest, a boy, died at age 16. “Since I started working here, I slowly got over that. I feel better if I’m with the group. I’m also happy when I get paid because I now have I have money for my children’s needs. Thank God I’m not that sickly anymore.”

“Paper is a sure and steady source of income,” says Betty. “The prices of farm products always fluctuates. With paper, the women earn weekly. They always have ready cash when they need it. Now they don’t have to ask their husbands for money if they want to buy something for their personal needs, like extra set of underwear, face powder, school needs and transportation allowance of the children.”

Betty adds that the women’s financial stability has grown so that the neighborhood sari-sari stores offer them credit even when they don’t need it. Their weekly pay is a good enough collateral.

Relating with APFTI

Katakus met APFTI in the early 1990s and began availing of the latter’s services in 2000.

“We didn’t know anything about fair trade before,” said Betty. “All we knew was that we were carrying out a socio-economic project. Our concepts deepened when we were exposed to what fair trade means. For us, this means that we give fair wages, that the work must be conducive both for the workers and the environment. The enterprise should be empowering for the workers and whatever proceeds we make, we plow back to the project in terms of services. We carry the principles but we are still in the process of institutionalizing fair trade practices in our organization.”

Katakus staff attended training workshops that APFTI conducted with the Department of Trade and IndustryI. In 2001, APFTI subsidized Katakus‘ participation in three exhibits of the Mindanao Trade Expo.

In 200_, Katakus and APFTI signed a six-month assistance program for product design. An APFTI designer goes to Katakus to make designs, which Katakus converts into prototypes.

Betty says because APFTI’s designer favors the hands-on approach, it became easier for them to learn. “The designer criticizes our work, while our workers gives feedback on her designs, like if it’s hard to execute.”

”APFTI also helped us compute fair compensation for workers, costing and pricing, the 5Ss, as well as how to speed up production,“ Betty added. “As far as we know, our piece rates are higher than our competitors. They give Php7 per piece, we pay Php8 to 9 per piece.”

“I think being part of the fair trade network has made a difference for us,” Betty says. “Iba ang tatak when you’re a member of the fair trade forum. The Philippine support group (from abroad) for fair trade organizations is negotiating with us. If they know that you are a fair trader, they appreciate you more.”

Betty believes that the women’s persistence is the key factor to the enterprise’s success. “Kasi kahit nandyan kami, kung walang gumagawa, wala din. Continuous product development is also a key factor because if we come out with the same product year in and year out, sales would go down. We do research. We started with banana and cogon, then used abaca and bamboo and sinamay to lower costs. Our paper lampshades are washable. We also improved on the process of fossilizing leaves.”

The ladies of Womenkraft have also developed their abilities in the process. They now manage the production side and are aware of gender issues and concerns. Husbands are now supportive and can be relied upon to do repairs at the work site, like fixing leaking roofs and minor electrical problems.

But these women do not work for themselves alone. Womenkraft helps provide funds for Katakus’ other programs for women. Recently an Php8,000 startup fund was alloted to begin a papermaking project in another community in Toril. “We’ll start with simple equipment only,” said Betty. “

“It’s been a decade of hard work but it’s all worth it,” Betty mused as she thought of what it took to keep the enterprise going and what more it will take to replicate this in other communities.

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This article is part of a series of stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

In 2004, the Occidental Leyte Dairy Primary Multi-Purpose Cooperative (OLDAPRIMCO) earned more than P820,000 from fresh milk and milk products. Not bad for a dairy cooperative which nearly went bankrupt after losing P12 million on its first three years.

OLDAPRIMCO manages a milk processing plant in Ormoc City. The coop buys raw milk from dairy farmers, produces fresh milk in bottles and distributes these in Ormoc and Leyte. Present products are plain or flavored (mango, choco, strawberry and melon) fresh milk in 200 ml and 500 ml (half liter) bottles, and pastillas or milk sweets.

“Besides helping farmers from two cooperatives which supply us with raw milk, we help feed undernourished children in Leyte,” coop chairman Engineer Jessie Villena said.

Half of the milk that OLDAPRIMCO makes goes to milk feeding programs all over Leyte.

OLDAPRIMCO aims to become financially capable, produce quality milk and increase milk sales in the next years. The coop has coined catchy slogans to coax more people to drink fresh milk. One, addressed to general public, said, “A milk drinker is a good worker and bright thinker.” And for the adult population, “Basta milk drinker, sweet lover.”

Starting big

OLDAPRIMCO was organized in 1992 with help from the Department of Agriculture and National Dairy Authority (NDA).  It then had 100 members recruited from participants of dairy farming seminars conducted by NDA. Each member contributed Php1,000 for the capital build up (CBU). As of 2004, paid up capital was Php267,708.

OLDAPRIMCO started big in 1994, with a Php40 million loan from NDA. The loan enabled the coop to import 300 dairy cows from New Zealand, buy a 32-hectare ranch where the cows would be housed and bred, and acquire a state-of-the-art milk processing plant. The plant was designed to operate with “no hand intervention.” It had stainless steel pumps for moving the milk to and from the pasteurizer, an ice and chilling plant, and was designed to process 1,000 liters of raw milk per day.

The coop incurred heavy losses on its first three years. Feeds for the imported cattle and other production costs ran high. While coop officers argued about how to run the enterprise, the target market in Leyte was cold to the idea of switching from powdered to fresh milk. On top of that, a number of cows got sick and either died off or stopped producing milk. The size of the herd dwindled, causing the plant to lie idle because there was less and less milk to process.

The venture was bleeding by 1997. OLDAPRIMCO spent Php64.46 pesos to produce a liter of fresh milk, which was then selling at less than P30 per liter. Gross sales stood at P787,828 while cost of sales was a high P2.7 million.

The coop staff’s salaries were often delayed by three months. In the toughest of times, the coop had to butcher a cow and sell the beef in the market to pay the staff.

It was at this point that OLDAPRIMCO’s board of directors passed a resolution to declare bankruptcy.

“The bankruptcy papers were never filed,” Jessie recalled. With NDA’s help, OLDAPRIMCO strove to save the business. NDA started repossessing some of the coop’s assets to recover part of the funds and reduce its debt burden. The dairy cows were herded out of the ranch and distributed to members; they would own the cows individually, payable to NDA within five years.

The next to go were the “high tech” pasteurizer and the 53-hectare ranch. These moves helped to pare down OLDAPRIMCO’s debt by half.

“NDA reconfigured the loan, leaving a balance of P21.9 million to be paid by OLDAPRIMCO.” said Dioly Sacro-Segun, the present project officer detailed by NDA for Leyte field operations. “NDA continues to help the coop through the milk feeding program.”

Recovery program

The coop’s financial situation improved slowly but steadily beginning 1998. For the first time, the balance sheet showed a net income of Php103,000. “OLDAPRIMCO’s financial statement is positive as of now,” said Dioly. ”It pays salaries on time and gives SSS benefits for the staff.” The coop has 12 full-time employees: a secretary/ inventory clerk, technician, processing supervisor, two processing assistants, milk collectors, cashier, bookkeeper, and marketers.

OLDAPRIMCO’s recovery was due to a combination of factors.

Dispersing cows to members quickly brought down cost of production by 55 percent.  Two other dairy cooperatives in Leyte, BIMCUSA and CAPRIMCO, now supply milk to OLDAPRIMCO, whose new role is processor and marketer.

Coop officers got their act together to improve management of the business. Financial systems were put in place, beginning with an improved system of recording that followed the principles of good accounting and bookkeeping.

Under Jessie’s leadership, OLDAPRIMCO also re-tooled the processing plant to better suit its needs. “The original plant was too big and expensive for us to run. Its capacity was 1,000 liters of milk a day, when we could supply only 200 liters,” said Jessie, who used his know-how as a mechanical engineer to design the milk processing plant’s present equipment.

“We fabricated equipment to match our actual production,” he said. “We made three smaller pasteurizers made of stainless tanks good for handling 150 liters. We still have electric beaters and agitators and a homogenizer with a smaller capacity of 200 liters per hour.  If you do not homogenize the milk, the cream will curdle after 24 hours. We do manual packaging with an automatic vending machine. And we also bought a generator because we have frequent brownouts that last for a week during the typhoon season. Our generator can keep our four freezers running. All in all, the modified plant cost us just Php250,000.”

The milk feeding programs jointly implemented by NDA and LGUs in Leyte were also a saving factor. These provided OLDAPRIMCO with a sure market for fresh milk. And it was a huge market, requiring around 200 liters of milk per day. Since free milk feeding began in 1998, the program has benefited more than 5,000 pre-schoolers in communities and 6,000 grade one pupils in Leyte.

“So far, the milk feeding program continues because a number of LGUs see their malnourished children growing healthier,” Diolly said. “Some LGUs are now doing it on their own. The municipality of Malitbog used to rank as 7^th in terms of having the most number of malnourished children. Now it ranks 17^th so they institutionalized milk feeding and allocated more than P200,000 each year for the program. Thirty-seven barangays in Malitbog also allot Php3,000 for milk feeding.”

Dioly pointed out, however, that the milk feeding program “is an artificial market. The funds for the program will not always be there. As a business, OLDAPRIMCO should sell more milk in the open market.”

At present sixty percent of OLDAPRIMCO’s milk production goes to milk feeding programs and the rest, to the open market (mostly teachers, government and private employees). OLDAPRIMCO sells milk to walk-in customers at its office in Ormoc City but milk dealers in Tacloban, Kalumpon, Maasin, Sogod and Baybay account for most of the sales. “We have almost all towns in Southern Leyte covered,” Jessie said. The dealers get the milk at Php45 per liter while the suggested retail price is Php47.

“In the future, we will go to the groceries and malls and try to get public school teachers to sell for us,” Jessie added. “Right now, delivery cost is expensive.  We don’t have problems supplying milk to the feeding programs because there are only a few delivery points and we have two four-tonner trucks and a light ace for these. When we deliver milk for the feeding program, we also bring milk to sell to the open market, thus hitting two birds with one stone. But we need motorcycles to deliver small volumes.”

OLDAPRIMCO will also need promotion campaigns to woo Leyte residents to patronize its products. “We tried producing kesong puti  (cottage cheese) but these were not sellable,” Jessie said. “People here are still not familiar with yogurt. Some find fresh milk expensive. They say that for the price of a liter of fresh milk, they can already buy two kilos of rice.”

Fair buying price

OLDAPRIMCO increased the buying price of raw milk from P15 to to P19 per liter last year after dairy farmers complained that they were not earning much. This was the second time that the coop increased its buying price. According to Jessie, dairy farmers get from Php140 to Php250 in milk sales daily. A farmer with two cows can earn P8,000 a month, depending on how much milk his or her cows give.

To increase milk production, OLDAPRIMCO asked farmers to use feed mix supplements (cost is Php12 per kilo). “That brought up the production cost a bit, but in return, farmers saw milk yields increasing from 4 to 6 liters a day immediately after using feeding concentrates,” said Jessie. “Now the average production per cow in Ormoc is 12 liters a day.”

Some farmers who are members of dairy cooperatives process their own milk or sell them in the open market. “They earn more if they sell the milk outside,” Jessie explained. “This gives us a slight supply problem but we let them do that since one of our goals is to increase farmers’ incomes. OLDAPRIMCO should lay down clear policies for this. Maybe we can give a higher price for members who sell more milk to us.”

Upgrading skills and efficiency

Jessie said the coop continues to seek ways to improve management systems and operations support. “When I became chairman of the coop, I saw that we still needed to identify our direction and improve our understanding of the very nature of the business itself,” he said. “Most board members were not familiar with how milk is processed – which came first, homogenization or pasteurization? You need to know these things if milk is your business.”

Jessie got more ideas on how to professionalize the coop when he attended a seminar on good manufacturing practices sponsored by the Association of Partners for Fairer Trade Inc. (APFTI). “I learned about hazard analysis, control point systems and other ways and means to improve the production process for those in the food industry,” he said. “When I heard that APFTI had a coaching program, I applied for OLDAPRIMCO’s inclusion. There were 21 applicants, we made it to the bottom of the shortlist and eventually got accepted.”

The six-month coaching program by APFTI was done with the help of a local consultant, Dr. Palomar of the VISCA. She conducted regular plant visits to check on sanitation and adherence to good manufacturing practices. “The plant staff follow procedures but it’s good that an outsider checks on them from time to time,” Jessie said. The coaching also enables OLDAPRIMCO’s board and staff to attend skills upgrading seminars such as the one on good manufacturing practices.

“Upon Dr. Palomar’s suggestion, we also changed the pastillas wrappers from papel de japon to wax paper,” said the bespectacled coop chairman, who in his mid 60s is also an active dairy farmer, a Department of Science and Technology consultant for essential oils and an inventor who never seems to run out of ideas.

“I’m fabricating a blender for the de-aeration of the milk since air causes spoilage and shortens the shelf life,” he added. “I’m also experimenting on a prototype for sterilizing milk using a small vacuum pump and condenser. Once I finish this, we can make sterilized milk, which keeps longer. Through evaporation by vacuum, it will take us only one hour to produce pastillas (milk sweets) instead of five.”

“This coop has a future and it can become sustainable if we take care of it and try our best to sustain it,” he mused. “We hope to also change the values of our members and employees so that in their hearts and minds, they realize that this cooperative is for them.”

In the last two years, OLDAPRIMCO’s financial performance was good enough to enable it to make a Php513,000 loan payment to NDA. The balance is still big, but to paraphrase their slogans, hopefully, “Basta milk drinker, good borrower.”

——————————————————————-

This article is part of a series of stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

“It is not what man has lost but what he has left that is important.”

By holding true to this maxim, Bahay Pangarap now means life and work for disabled workers who make school materials and educational toys under its supervision.  Handcrafted wooden products – turtle and flower puzzles, color triangles, matching cards, table blocks, alphabets on wheels, threading beads and control maps – are a child’s visual delight. The workers also have something for Moms, such as wall displays, hangers, hot pads, picture frames, wooden trays and tissue holders.

Bahay Pangarap, which is part of Tahanang Walang Hagdan, maintains a factory in Barangay San Agustin, Novaliches, Quezon City. Workers on wheelchairs carve, sand and paint wood of various shapes and sizes or do clerical and bookkeeping work at the administration office. By keeping the small factory running, BP fulfills its mission to provide disabled persons the opportunity to become productive. By leading productive lives, the disabled at Bahay Pangarap have gained respect and human dignity, a fact which encourages this center for the rehabilitation of disabled persons to expand and develop the social enterprise further.

A business for a cause

Bahay Pangarap is managed by Nelia Tresense, whose disabled father once worked at the center. Nelia looked back to the years when BP was just starting.  “Sr. Valeriano, the center’s founder, was a nurse in the National Orthopedic Hospital.  While doing her rounds, she met patients who had been abandoned by their families after having stayed in the hospital for two to three years.” The good sister opened the center for these patients in ____. Most of the first interns were farmers from Samar, Leyte, Romblon, Davao and other parts of the country.  Most were unskilled and with disabilities in the lower extremities.

At the start, the residents were simply like boarders at the center, with only seven of them doing some kind of production work.   As the center grew and started accepting referrals from outside the hospital, Bahay Pangarap turned itself into a production and business center.

The workforce has peaked to 62, 49 of whom are disabled.  “Machines have to be handled by abled people,” Nelia explained.  Wives of disabled workers are hired too; of the 19 females in the workforce, only three are disabled. When orders mount, BP also takes in students for summer jobs.  Age limit for workers is 45 years.  The average worker is about 30 years old; the youngest is aged 20 and the oldest, 62.

Job placement depends on talent and previous work experience. “We to let them do manual work first,” Nelia said. “If they are physically strong and dexterous, we assign them to a machine. If they have artistic talent, we transfer them to painting.” Those physically weak are allowed to work only half day.

Bahay Pangarap has seen the ebb and flow of life among the disabled. All except two of the old-timers have gone (life expectancy for paraplegics can be short). Still many have been wed and raised families of their own while working here.

Sales and workers’ benefits

Around 75 to 90 percent of Bahay Pangarap products are sold in the Philippines. “Our products have also reached foreign markets,” said Nelia, “such as Montessori schools in the U.S. For four years now we have been producing packing materials for Body Shop.  Some buyers sell our products to Japan, Italy, Belgium and the Middle East.”

“We want to expand our export market because that will mean big volumes,” Nelia said. But she ticked off the difficulties of dealing directly with the export market. “There are a lot of legal documents you have to process and Sister does not want to do that. Second, importers ask a lot of questions like, is your paint non-toxic? We had the paint tested at the Dutch Boy laboratory, which certified that the paint we use is indeed non-toxic. The paint did not pass U.S. standards but it meets requirements in Italy.” Nelia also worried about meeting export deadlines because Bahay Pangarap still runs into problems filling local orders.

The center’s products are sold mainly to the AB market, at a price lower than its closest competitors. Present outlets include the Department of Social Welfare and Development’s Early Childhood Development Program and SM Megamall. To buoy up sales, Nelia attends seminars, distributes brochures and price lists among prospective clients and makes the rounds of schools.

Orders peak between September and October.  During summer and until July, the center produces school materials, then prepares products for trade fairs, such as give-aways and household items. The factory is busy most of the time, except during four lean months (January-February and November-December) when no orders are placed.

Bahay Pangarap used to put workers on rotation during lean months. The policy then was no work, no pay. The workers went to the center for help because no work meant no food on the table.

“We stopped rotation and let the workers produce stocks so we’d have products ready once buyers resume their orders,” Nelia said. “When sales drop, we run out of cash to buy raw materials. Bit we cannot withhold the workers’ salaries because they need the money.”

BP grosses some P5 million on a good year.  Cash flow remains a problem, however, as the center wrestles with the problem of allocating the revenues between workers’ welfare and operating costs. Monthly electric bills alone reach P20,000.

This is one reason why BP cannot comply with the fair wage requirement of fair trade.  “Many of our workers are still paid less than the minimum wage,” Nelia admitted.

The wage at Bahay Parangap is P100 a day for entry-level positions, while the highest wage earner receives P300 a day.

Despite lower wages, the pay is apparently better here compared to competitors who pay piece rate.  Bahay Pangarap also does not scrimp on benefits. It conforms to a no-child labor policy, gives benefits such as SSS and Philhealth, and provides for 15- day sick leaves and 15-day vacation leaves. If a disabled worker gets sick, he or she can ask another member of the family to substitute “para continuous ang income nila.”

The biggest benefit perhaps is the center’s housing program for its disabled workers. This consists of 30 units in one-story rows of houses located in two compounds. The housing complex is near the factory so workers don’t have to spend on transportation. The center rents out a unit per family at P400 a month, excluding utilities. Each unit is a one-room affair, subdivided into living room and kitchen. Three families share one comfort room.

Unmarried male and female workers without families stay in a dormitory.

Bahay Pangarap also looks for foster parents for disabled couples who have four to six children. The foster parents shoulder the children’s schooling and often pay half of the rent.

A constant concern is more funds for additional housing services.  When a disabled worker dies, his/her family is given lead time to look for another residence, while another disabled and his/her family waits to move in.  The nuns themselves help look for a new home for the deceased’s family.

As general manager, Nelia also helps solicit financial support from donors. At some point during President Joseph Estrada’s time, funds from the Philippine Charity Sweepstakes Office amounting to P400,000 a year were allotted to the center. The funds helped cover the center’s electric bills and served as revolving capital when payments were delayed for as long as six months, as in the case of DSWD.  Government support has since stopped during President Gloria Macapagal Arroyo’s administration.

Fair trade network

Bahay Pangarap has increasingly tapped assistance from the fair trade network. Oxfam, a development NGO which helped social enterprises market their products, used to be BP’s main client until the former shifted its focus from marketing to training.

“SAFFY Handicrafts used to carry our products because we could not afford the trade fairs,” Nelia recalled.  With the entry of APFTI, we got services like training workshops, product development and subsidies for trade fairs.”

Nelia said that APFTI’s training on the “5S” (Sort, Systematize, Sweep, Sanitize, and Self-discipline) had done wonders for BP.  Everyone started to get involved, said Nelia, from the management group to the production teams.  A clean and orderly environment became the norm, such that workers who got into the habit of tidying up their work places extended this habit to their homes.

For its part, BP tries to provide more non-cash benefits to its workforce. Sports fests are also encouraged, with patrons or sponsors providing allowance for them to compete.

Electric fans and dust collectors are visible in the work areas. “We can’t completely eliminate dust because that’s part of the nature of our work,” Nelia said. As a precaution, the factory perimeter has been sheathed with canvas to prevent dust from wafting to the neighborhood.

The center has also stopped using hard wood and has shifted to palo china (second hand lumber from crates). But as palo china can run out of supply, BP is using non-hardwood materials such as modified identity fiber (MIF) or particle boards from Taiwan and Malaysia and exploring bamboo as a likely wood substitute.

For all its work, BP gets support sometimes from the unexpected.  “Upon seeing us featured at Isla channel (an episode sponsored by APFTI to promote its partners),” Nelia said, “a rehabilitation center in Guam offered its support by putting us in their website, making promo materials for us and ordering give-aways for their clients.”  Other inquiries and support have started to come in.

Combining production and advocacy has made BP what it is today.  Lack of capital may slow down its growth, but following trade fair practices allowed it to stay on course.  No one attests to this better than the disabled themselves who have become breadwinners and productive members of their community.

Rebecca Buela –  two good working hands

I had polio and my husband was an amputee (both legs).  We have three children. I came all the way from Olongapo to look for Tahanang Walang Hagdan when I read about it in the komiks. I stayed with Tahanan for 12 years, doing piece rate work for United Laboratories and National Book Store. I moved to Bahay Pangarap in 1989 when my husband started philandering.

I started working at BP for P25 a day, with no housing benefit yet.  Then my wages went up to P60, P70 and P80.  Now I earn P151 a day.

I feel secure working here because we treat each other like family. I’ve worked once with able bodied co-workers and I felt I was not developing. I’m not looking for other options even if the pay is low.  It’s up to management to increase our wages.

I am lucky that even if I have a job even if I’m wheelchair-bound, unlike some neighbors, who though born normal, are jobless and idle. Sometimes they ask me if they can work here.  I tease them back and say, “You need to lose your feet first.”

I can still work past the retirement age of 60.  But my dream is to open a store and have my own house when I retire.  My daughter gives me an extra of P2,000 a month, but I don’t want to depend on any of my children.  Also, I still touch base with my siblings in Olongapo, and sometimes we go out and have fun.  I have since become a widow.

The disabled don’t have to be helpless. I still have two strong hands that can work. I also know how to sew, and when I retire, maybe I can also sew for a living.

Eddie Sarap –

My dream as a child was to become a doctor. But I got stricken with polio. I was angry, I refused to eat and felt hopeless until a nun and a priest started talking to me. I looked at our dog and thought, it barks, it guards our home and has a role. I spent time thinking about that.

I was sent to school by nuns, and after high school in 2003, I stayed at BP.

I’m still single and live in a dorm with three others.  Recently I went home to Jaro, Iloilo and gave my farmer parents some money.  I remembered the time when out of boredom I left my parents and boarded a ship to Manila to find work.  I landed in Tahanang Walang Hagdan in Cainta, Rizal where I worked for four years packing Serg candies for Serg.

I took up training with APTFI and it taught me the values of leadership, how to handle people, personality and work development.  It had such an impact on me that I became a leader in the manual sanding department.

I take pride in being independent and being useful.  The nuns also sent me to college but I stopped because our school was on the fourth floor of a building where the elevator didn’t function because of frequent brownouts.  I was afraid I would fall from the stairs even as my classmates were helping me out.

I am also lucky to have joined a sports fest in Japan together with my six co-workers.  I took a leave from BP for more than a month, with no pay but our sponsor gave us food allowance while training for the competition. Japan is such a beautiful place. Our Japanese sponsors really took care of us.

My concern now is that BP, like Tahanan, will find client firms to give us more work, so that if we finish one job, we can still have another. It would also help if our wages were increased.

This article is part of a series of stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

 Profit-hungry business giants can learn something from this cooperative of weavers in Aklan. You don’t have to be rich to be fair in your dealings.

“In doing business, no one should benefit at the expense of others,” board member Marlene Iledan said. “We should practice fair trade so people will benefit,” added Emma Lamis, chairperson of Kauswagan Development Cooperative (KADECO).

Aklan province has an army of weavers who produce fine cloth and mats from fibers such as piña, raffia and abaca. Weaving is a fine but low paying craft. Women stick to it because there is little alternative livelihood. It is also a tradition handed through generations.

“People in our barangay make a living by weaving and raising cows and pigs,” said KADECO member Rosita Patricio. “I taught my children how to weave both siksik (finely woven abaca cloth) and birang-birang (sinamay or loosely woven abaca). We make mostly siksik because it costs more. A weaver can finish 20 meters of cloth a week, sell this for Php1,000 and earn Php750 after deducting Php250 for the cost of materials.”

KADECO’s goal is to provide livelihood to help rural communities become self-reliant. It also promotes cooperativism and extends financial and technical assistance to members. Members get the raw materials from the coop, weaves them into abaca cloth/rolls and sells them to the coop. The coop buys siksik at Php80 – 85 per meter and sinamay at Php20 – 25 per meter.

KADECO was registered in 1988 and today has 146 mostly-women members province-wide. Abaca cloth weaving is its main business.

“Modesty aside,” said Zaldy Rapiz, “our sinamay in Aklan is better than the ones produced in Bicol, which is loosely woven. Our weavers know how to make sinamay but we encourage them to concentrate on siksik to earn more.” Zaldy has been KADECO’s general manager for over a decade. He serves an all-women board.

KADECO hires a member to sew abaca cloth into finished products like bags, pouches, placemats, runners and hats. Regular buyers include exporters from Manila and Aklan, and tourists in Boracay.

“We started making finished products only two years ago. Things are not moving that fast since we still have to improve design and quality,” said Zaldy.

KADECO got the idea of making new products when it attended a seminar on product development sponsored by APFTI. APFTI’s designer introduced designs for KADECO to try. “Some of the bags and other products we sell in Boracay were made from these designs,” said Zaldy. “The most recent design is for abaca cloth, which we sold during the Aklan Fiber Festival last year.” KADECO also got subsidies from APFTI to facilitate in fair trades in Aklan.

Fair trade and trade fair

In early 2005, KADECO requested APFTI consultant Reggie Gaza to conduct for its board of directors a workshop on what trade fair is. They learned that a fair trader is not someone who participates in trade fairs. Fair trading means being patas (upright and just) in the conduct of business by adhering to certain principles.

KADECO’s board members set out to define how fair trade principles apply to their context.

Since most coop members are female, it was only apt that the coop address the problems and needs of women. “KADECO should provide opportunities to enable its members to develop their talents and apply these talents to their work,” said Rodelyn. “Women should be trained to encourage them to assume responsible positions in the coop. We should also consider their welfare and health, especially those who are pregnant. If a woman works, she should be able to divide her time between work and household chores so her work will not suffer.”

Fair trade also means paying a fair price, said another board member. “The price of a product should be enough to cover raw materials and labor, as well as a mark up. KADECO provides the materials and also buys what we produce. We give members a better price if the quality of their work is really good. For a meter of single-ply siksik, we get Php80 – 85 per meter. For that same piece of cloth, other buyers will give you only P35 to P40.”

Chairperson Emma added that the coop, especially its officers, should run affairs with transparency and accountability. “We should not give favors or be partial to anybody, whether she is a member or partner in business. Officers should be accountable to those who invest in the coop. Even our employees should be given the chance to participate in decision-making, management and provision of accurate information.”

Fair trade principles also include reaching out to the poor: “We want to improve the standard of living and quality of life of our people by giving them livelihood opportunities. This is our way of helping reduce poverty in our country.”

Helping agrarian reform beneficiaries

For KADECO, all of the above nice words are not merely coined for putting in brochures.

For the past three years, the coop trainers have been fanning out to teach the art of weaving to women in communities benefiting from the agrarian reform program. “DTI and the Department of Agrarian Reform tapped us to conduct the training workshops. We also teach women how to extract and process abaca fiber,” said Zaldy. The goal is three-fold: skills, livelihood, and additional income.

Because of its track record in abaca weaving, the United Nation’s Food and Agriculture Organization recently signed a contract for KADECO to serve as a business development partner. “In the next three months, KADECO will provide more training on weaving,” Zaldy explained.  “We will provide the looms and monitor the trainees’ work to ensure quality. We consider this a major accomplishment since the project involves 75 participants from two big agrarian reform communities.”

KADECO will be paid a consultant’s fee for this project. Like for other agrarian reform communities they have helped, they will promote the women’s products during trade fairs and offer them to possible buyers.

More fair buyers please

So far KADECO has provided a steady source of income for members. Fey Iguin, widowed at 32, was able to send all her four children to college through weaving for the coop, plus help from relatives. “Income from weaving is good enough if you’re a fast and hard worker. I make siksik which is more expensive. I finished only first year high school but am now a member of KADECO’s credit committee.”

Meantime, KADECO continues to seek ways and means to make the business grow and increase members’ benefits, primarily by securing a stable market.

“We want our products to have the right price and quality, and we want these to be saleable,” said Marilyn Iledan. “The problem is we don’t have regular buyers. We can’t give our employees adequate pay because there are months in a year there is no work because there are no orders. We had no orders in June, July and August last year and the early part of 2005. Weaving really helps members, but it’s not a continuous job.”

Mary Valry Dava, the staff in charge of quality control, said KADECO’s products should be reasonably priced and of good quality to attract more buyers. We are helping our weavers produce quality work. We have 56 weavers so far.” Regular production of abaca cloth (sinsin) is 1,000 to 1,500 meters a month.

“After we formed the coop in 1998,” said Zaldy, “we have set quality standards. In the early years, our office was full of rejects because the weavers were producing substandard quality. Things have improved a lot. Before, 75% of the abaca woven was rejects because the weavers were just starting to learn. Now 95% of the members’ output is quality work. Even so, we instill among members the need for quality.”

Selling abaca bags, pouches and placemats in Boracay has helped KADECO some, with average sales of around Php6,000 a month.

“We need to increase our revenues to we can give fair wages to workers and employees,” said Zaldy. “One of the challenges now is to how to determine a fair price for our products so our buyers will become regular customers,” said Zaldy. “Also to professionalize operations so employees can accomplish their work efficiently. We really need the help of groups like APFTI to help us find a stable market so we can better service our members.”

“That’s why we want to fast track our five year development plan,” said the chairperson. “Giving fair wages is one of the targets of that plan.”

Despite the lack of a sure market, KADECO was able to give members dividends for the first time in 2002, for revenues accumulated since 1998. Members got a minimum of Php100 or a maximum of Php3,000 each, depending on their work and paid up capital. Dividends paid in 2003 were lower (minimum of Php50 to maximum of Php2,000) but attractive enough to encourage new members to join up.

In 2003, KADECO’s total sales was Php1.3 million and reached Php2.1 million, in 2004. The coop may not be able to duplicate last year’s performance since sales as of April 2005 is only Php401,861.47.

Zaldy wishes that buyers become fair traders too. “We have a big possible order but the buyer is asking us to bring down the price of our sinamay from Php35 per meter to only Php18.”

Fair trade principles are not merely rules to comply with or enforce. Fair trading is a spirit that comes from the heart. This may well be the secret why SHAPII, a small town enterprise, has succeeded and won partners and supporters from Europe, Japan and the U.S. And it’s earning and growing too.

SHAPII (Salay Handmade Paper Industries Inc.) is located in Salay, a seaside 5^th class municipality in Misamis Oriental, north Mindanao. Population is about 20,000, most of whom live on farming and fishing. Aside from the munisipyo (local government), SHAPII is Salay’s only other big employer, with 400 plus workers, half of whom are home-based subcontractors. In recent months, as many as 400 applicants have come looking for work.

A noble cause, a shaky start

SHAPII started as a livelihood project of a group of patriotic Salay residents who founded Salay’s People Economic Council. The dictum was “Yes! The Filipino can.” Among the group’s active members was Loreta, a nurse married to Dr. Reynaldo Rafisura, who was also active in the group. In 1987, the group raised funds, trained in papermaking under the Department of Trade and Industry, and set up shop in an abandoned poultry house in the Rafisuras’ backyard.

The group’s first output disappointed both themselves and potential buyers. The first significant buyer, who was dismayed when the 50 invitation cards were delivered, commented, “An egg tray paper looks better.”

It took two years of advanced training on paper-making, persistence and experimentation for the product to look like something the market would buy. The handmade paper looked finer and thinner because to cogon was added other materials such as abaca fiber, pineapple leaves and salago bark.

Heartened that all their goods sold out at a fair in Davao City, the group decided to get a business registration. The members wanted to enlist as a cooperative but did not have enough equity, wanted to be recognized as a foundation but did not have the Php50,000 required. So SHAPII ended up listed as a private corporation because it was cheaper to become one. The new firm started with nine incorporators.

A business run like a foundation

Since the beginning, SHAPII was run on the spirit of a foundation, due largely to the life philosophy of Loreta, who served as general manager until her son Neil assumed the post.

“Profit has never been our motivation,” she said. “We emphasize honesty, self-reliance, hard work and love of God through the art of handmade papermaking. Filipinos are just as good as other nationalities. We just need to tap into our own resources and the artistic talents of simple folk. Most of our designers were former housewives, fish vendors and out-of-school youth. We can produce global quality products using indigenous materials.”

While Loreta said that SHAPII still has to improve its gender policy, women have contributed significantly to company operations. Most department heads are female, despite the change in workforce composition from mostly female when SHAPII was just struggling, to about half and half today, with male workers slightly outnumbering women.

“We shifted to the heavier Indian style mould and deckles at the Paper Department about four years ago, which is more suited to men than to the more frail structured Filipina,” operations manager Christie Angob said to explain why more males had been hired. “Perhaps this is an index that SHAPII income has really become the family bread of our workers (when) our initial aim was just to augment the family’s earnings.”

The Designers’ Department remains the women’s domain and counts on a prolific workforce of 150. Top designers earn bonuses, awards and royalties from their original designs. In 2004, SHAPII’s designers produced 147,827 greeting cards and assorted crafted items. Among these was the “Memen fan” made of fossilized leaves embedded in clear hard plastic with a wooden handle. The fan, which sold like hotcake, was named after its creator, Design Research Head Memen Babia. Part of the sales from this product goes to the SHAPII Foundation scholarship program. But let’s save this for the last.

Worker benefits

SHAPII policies on workers reflect those of a benevolent management. Today, 15 of SHAPII’s 49 stockholders are workers who bought shares through salary deduction. Others can join in, as 15 percent total stocks have been reserved for SHAPII workers.

Not all workers receive the minimum wage, but the company compensates by giving 13^th and 14^th month pays, along with profit sharing, bonuses, pension plans, health insurance, loan assistance, medical, dental and optical assistance and alternative livelihood such as soap making, basket weaving and mushroom growing. SHAPPII also sponsored seminars for its workers and have sent a number of them to seminars and conferences conducted locally and abroad. Working students are allowed to leave one hour early to prepare for class.

SHAPII is also working out a housing project for workers with the Gawad Kalinga Project of the Couples for Christ.

Loreta thought that these benefits are not enough. “We give about 60 to 70% of all earnings to labor, yet it is barely enough to ensure survival for everyone. Many of those who started with SHAPII are now starting their own families. While our pay is the most that SHAPII can give and complies with the minimum wage set by the government, in actuality, this is really just enough to make us survive. Pamugas lang gyud – just enough to buy rice.”

SHAPII has thus encouraged workers to help themselves. With a little coaxing from Loreta, workers formed two organizations: the Sunshine Self-Help Group, and the SHAPII Multipurpose Cooperative. These two groups aim to address workers’ needs and is also an opportunity for members to manage their own affairs.

Sunshine was formed in 1994 with Loreta’s help negotiated a loan window of Php20,000 from the Rural Bank of Talisayan. Members, in turn, deposited Php50 each per month as their savings. The credit line has been used as emergency loans for members. At present, Sunshine had expanded to 57 SHAPII worker members, with total assets of Php380,000. The group now provides loans to non-members.

The multi-purpose coop was formed in year 2000. It operates a canteen, which serves affordable meals (Php5 per serving of rice, Php10 for a vegetable dish and Php15 – 18 for a meat dish). The coop also provides interest free emergency loans and buys and sells basic goods (rice, milk, sugar, coffee, soap and animal feeds) so members can save on groceries.

People are worthy investments

All the above inputs for workers’ benefits and environmental protection seems to have paid off in terms of company growth. In 2003, SHAPII two-story main building was inaugurated. The new building has a total floor area of 280 sq. meters with modern facilities like connecting telephones and computers and a display room where the wares are stylishly arranged.

SHAPPI General Manager Neil Rafisura also reported that sales has improved in 2004 compared to the previous year and that SHAPPII is assured of orders up to the early months of in 2005.

According to SHAPIINEWS, the different departments produced 1.3 million sheets of paper, nearly 150,000 greeting cards and assorted craft items and more than 33,000 pieces of crafted items in 2004.

All that much paper being produced meant that the volume of waste, particularly tainted water also increased. In 2003, SHAPII along with seven other companies, were chosen by the government’s Department of Science and Technology as pilot areas for its environmental management systems project in Mindanao.

SHAPII drafted a 7-point corporate environmental policy to express its “commitment to environmental protection and preservation as a requisite for sustainable development and long term socio-economic to present and future generations.” A number of SHAPII staff was sent to seminars on waste water management with the help of Pilipinas Kao, some of whose key personnel are officers of the Guardians of the Earth. SHAPII also invited a DENR representative and a chemistry teacher to orient personnel on the importance of environmental sustainability.

SHAPII at present has a minilab for monitoring its waste water and in 2004 enlarged its three waste water tanks to accommodate 17 cubic meters of effluents.

SHAPII had been the “baby” of many organizations that helped it grow in the past __ years. There is Parkwood which helped it break into the local market, the Departments of Trade and Industry and Science and Technology which provided resources and connections, the Association of Philippine Partners for Fairer Trade which facilitated market links, and many other partner-buyers from Europe and Japan who would not have extended support if the enterprise were profit oriented.

At last, the foundation

In time, SHAPPII was doing good enough to afford forming its own foundation called the Salay Handmade Paper Industries Foundation, which was formed in 1999 and registered in 2000. Some of SHAPII’s clients sponsor scholarship program. Main financial support, however, comes from the profit it makes from the business.

Among the foundation’s current programs are a reading center, computer training programs including one-hour computer export for grade schoolers who have no access to computer hardware, and high school and college scholarships (some of the slots are given to workers’ relatives).

Last year, SHAPII’s Christmas giveaway T-shirts sported the design Salay Handmade (its brand name): Investor in People. Neil explained, “I got the design idea from Jeremy Piercy’s citation as ‘Investor in People.’ I thought what a wonderful idea it is that we, Fair Traders, are investing in people.”

This article is 1st of a series of  stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

When a technician of UPLB tested Don Alfonso Wine, he rated it class A by international standards. Three tourists from Hawaii bought three bottles each after tasting it at a fair. An Italian came to buy two bottles daily while the wine was on sale at a Glorietta mall fair. There are orders from the U.S., inquiries from Japan and toasts from Tacloban wine drinkers that a good local wine is now available.

By all indications, this non-government organization called LRAP (Leyte Rural Advancement Programs) has a winner in its hands –  coco wine made from coconut water. LRAP also produces Don Alfonso Coco Vodka, which is coco water fermented with pure and fresh coconut toddy, and distilled for two months. Comes in cherry, red and rose colors.

Added value from waste

Coconut water is considered a waste in copra-producing areas in the Philippines.  It turns rancid in a matter of hours owing to its high nutrient content and low acidity, and exudes a foul odor upon putrefaction.

Coco water, however, has medicinal properties. It is used as a cure for kidney ailment and diabetes and can be a substitute of dextrose for intravenous application.  It is also used for making vinegar, nata de coco, lambanog (Philippine vodka) and now, coco wine.

Don Alfonso wine and vodka were named in honor of the inventor’s grandfather, who also happens to be the father of Fred Maray, executive director of LRAP. Fred said their products are all natural and nutritious and only fresh and natural ingredients, such as herbs and spices, go into the wine and vodka. “We use natural bacteria – live yeast from the coconut sap. Wild bananas are added for aroma, barks for coloring, and wild honey for flavor.  We use a bit of grape juice and malt extract bought from supermarkets, but only in small quantities.”

Coco wine is rich in potassium like grape, but is deficient in sugar, fruit acid, and tanin.  So the vintner has to mix in these substances in balanced proportions to duplicate the properties of grape juice. Coco vodka is made from coco water fermented with coconut toddy.  Fermentation takes a minimum of two months. The liquid is then distilled, the vapor collected and voila, you have vodka.

The liquors come in 750ml long neck glass bottles. A bottle of wine costs Php130 in the market, and vodka, Php 175. If you want these packed in an abaca wine bag, you pay an additional Php30. Wholesalers get a Php25-30 discount per bottle.

Striving for self-reliance

The Don Alfonso winery is a project of LRAP, a Leyte-based NGO whose mandate is to “facilitate the establishment of self-reliant peasantry and economically stable communities through increase in productivity in the short-run and cooperatives development in the long run.” To carry out this mandate, LRAP undertakes peasant community organizing, participatory research and integrated socio-economic projects and development education training.

The story of LRAP may be true of any NGO that tried to generate their own funds to make themselves sustainable without having to rely on foreign grants. Though the shift from a socially oriented organization into enterprise development was fraught with many difficulties, it was about time that LRAP practice what it preached.

“It was a paradox,” said Fred, “that while we taught community organizations to become self-reliant when we in the NGOs are grant-reliant.”

What helped LRAP pursue its business was a 10-hectare demo farm of coconuts in Dagami that it bought out of a foreign grant. The farm’s quarterly yield of 8,000 to 10,000 nuts was made into copra. Some of the coco water was made into nata de coco and vinegar, but gallons upon gallons just went to waste.

Fred asked his brother Ben, a chemist, to see how the coco water could be used. After months of experimentation, Ben perfected his formula for coco wine and vodka.

LRAP had the comparative advantage of having discovered and developed its own technology to process waste coco water into products with added value.  The knowledge of technology is exclusive to the Maray brothers, but other processes do not require special skills and are done by three to five local workers.

The initial idea was to train farmers how to make the wine and vodka so they would have added income. “It was not for us to do the wine making, only to demonstrate the simple technology that people can adopt,” stressed Fred. “Farmers can easily make the wine because the ingredients used are not costly. We wanted them to see that here was an opportunity to earn, using simple and easy to adopt technology.”

But this was easier said than done. Initial attempts to mass-produce wine ended with a lot of spoilage. “Wine making is a delicate and precise process that has to follow strict sanitary procedures,” Fred said. “All containers have to be sterilized – the ones you use for gathering the coconut water plus the bamboo you use to gather the sap, which we use as the live yeast. We ourselves observe sanitary procedures but still end up with 5 to 10% spoilage or vinergar.”

Coco water is collected when farmers harvest the nuts to make copra. “We gather the coco water ourselves to prevent contamination, say from spoiled coconuts,” Fred said. “We bring sterilized containers to the areas. We don’t use coconuts that are too mature because the water will be too oily. The best coco water comes from buko  (young nuts) because it has a higher sugar content. However, buko would be too expensive to use because you can’t use the meat for copra.”

Winemaking has also provided extra income to coconut farmers in neighboring fields. “When nobody’s doing copra in our farm, I send people to adjoining areas to get coco water. We pay Php20 for each jug of coco water.” It takes 100 medium sized nuts or 60 to 80 big nuts to fill a jug.

LRAP made winemaking its own project in 1994. “We were not really serious then, we just treated it like a demo project,” Fred recalled. But when funding for LRAP dried up five years ago, Fred saw its potential to raise funds for its operations.

LRAP started off with a small capital, using money from previous sales to make the next batches of wine and vodka. It was backyard production all the way.  The stainless tank used for making vodka was fabricated in Tacloban. The distillery used coco shells, fronds and husks as fuel, often making it difficult to control the heat.

Later, through APFTI’s assistance, LRAP secured funding from PACAP (Philippine-Australian Community Assistance Program) for improving its winemaking facilities. “We bought bottles,” said Fred, “also instruments to measure pH and alcohol content.  We acquired a power generator, water pump, tanks and plastic barrels, small jugs, etc.  We would have bought a meter to measure total soluble acids but it was too expensive.”

At present the winery can produce 500 bottles a month at the minimum and twice or thrice that at the maximum. According to Fred, LRAP’s business plan provided that they recoup investments in five years.

Bottling bottleneck

Although LRAP’s winemaking facilities have improved, it still has to contend with a bottleneck to success – the bottles to put the wine in. The Bureau of Food and Drug Administration (BFAD) requires LRAP to use its own bottles, if it hopes to be accredited as an exporter.

“The cost of bottles is prohibitive,” Fred lamented.  “It will cost us millions to have our own branded bottles.  I bought new bottles at more than Php30 apiece. If we use new bottles, we will have to increase our selling price, and if we do that, we won’t be competitive anymore. To hit commercial volume, we would need some Php 30 million for bottles alone.”

Fred balked at BFAD’s requirement for wine exporters. “In Italy,” he said, “wine makers are allowed to use used bottles.”

Fred also wanted to have the nutrients in their wine analyzed but is hard pressed to do so.  Every mineral or nutrient analyzed costs Php 600.  “We have to identify the nutrients we want analyzed. I think that our nutritive content is high because our product is not heated, the coco water is fresh, and we add wild bananas and honey.”

So far, LRAP’s coco wine and vodka are proving to be sellable. “But the problem is still capital.” Fred said. “Last December, I got orders of 530 bottles, but I could only supply 56. Our funds limit our market to the Philippines, particularly Boracay, and even this we cannot sustain.” He added that potential customers have lost interest because LRAP has failed to meet orders.

Mainstreaming products

It is not just the lack of capital, though that was bugging LRAP.  It also needed help in mainstreaming products, learning the ropes of business, and improving systems and records. The business was operating at a loss as the overhead expense is much bigger than sales.

A consultant from APFTI noted that that at the current selling price and production cost, Don Alfonso wines can have a high profit margin that would not require huge sales volume to break even. In 2003, the consultant estimated that LRAP needed to sell 66 botlles of coco wine and vodka to break even. During the first six months of 2003, however, actual monthly sales averaged only 30 bottles for red wine and six bottles for vodka.

Currently LRAP maintains a staff of three in the office, two as community organizers and two as winery staff. Two part-time workers are hired to collect the coco water and to pour the liquor into bottles.  Wages are paid on a daily basis.  There is no incentive scheme for workers, although a promise of a share in profit is expressed in due time.  Also Fred’s salary still comes from the LRAP and not from the winery.  All the staff does multilevel work, and even Fred doubles up as production manager, delivery boy and collector.

Given the shape it was in, LRAP was grateful of having partners such as the Department of Trade and Industry (DTI) and APFTI.  Through these two partners LRAP was able join trade fairs in Glorietta, WOW Philippines, and Shoe Mart with only minimal fees for the booths.

Later, APFTI helped LRAP build its capability to make business plans and attend technology seminars on good manufacturing practices, food production and financial management. APFTI also provided free booths in trade fairs, although sales had been poor. And APFTI did approve packaging of their products, which means that LRAP can continue encouraging people to make baskets for wine bottles at P15 per bag.

Of all the things that LRAP has learned, it is to encourage people to apply their skills and imagination on resources and raw materials around them. For instance, LRAP trained its partners in one community to make handicraft and paper from abaca, their main crop. To help the community develop a market, LRAP buys their wine bags at Php5 apiece for its packaging and also helps to sell these as gift items.

Fred also bats for developing technologies that could be innovated and adapted to local conditions.  Where before the craze was to use technologies straight out of the academe, now technologies should derive from direct and local experiences, he observed.

He is 100 percent for NGOs to develop their own means to sustain their operations. “It’s about time that NGOs develop the capability to sustain their own operations,” he said. “There’s no conflict if socially biased organizations go into enterprise development as long as the profits go not to a few individuals but to the organization, its programs and services.”

*This article is 1st of a series of  stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

The coconut is called the “tree of life,” the “tree of abundance,” the “tree of heaven.”  For couple Roland and Baby Madera of Tangub, Bacolod City, the coconut also spelled good business since they started making and exporting coco crafts.

From a Php10,000 in capital which they used to put up Babylan in 1988, the company now has Php1 million in assets. The business has provided a stable income for the couple and their neighbors who have worked with them for many years.

Roland, an agricultural graduate, was a supervisor and designer in a factory manufacturing handicrafts and furniture.  The factory closed when Cory Aquino became president and his boss, a crony of deposed President Marcos, fled to Australia.  Without a job, Roland decided to work on his own. That was when he turned to coconuts.

Local sourcing

Millions of Filipinos earn their living from coconut and its by-products. Coconut trees abound even in sugar-producing islands like Negros, and grow anywhere from coastal areas and plains to rolling hills and mountains. What’s more, these trees can sustain fragile ecosystems. Coconut thrives even in water-deficient and poor soil conditions, and can stand harsh weather.

“The coconut has many uses, from the fruit to the trunk, to the leaves,” said Baby. “We use the midribs as a binder for placemats and hotpads, the sticks for baskets, the husk or shell for bowls, candleholders, candy or peanut dishes. The bark and shell we use as inlay.”

The last eight years saw Roland creating items for practical home use or for decorative purposes. Babylan has become known for its picture frames and other household accessories using laminated coconut shells. Lamination produces dark and light tones that enhance the natural texture and color of the coconut shell.

Babylan later came up with more innovative products and experimented with mixed medium that combined sentimiento and mahogany with coconut. The enterprise also uses tigbao, a reed that grows abundantly in the area.

“Costumers are tired of coco-craft products since these have been in the market for a long time,” said Roland. “You always have to come up with new products. We’re now developing coco bowls that are food grade because that’s what the customers want. I can’t really say how many designs I’ve made. Depends on whether we’re joining an exhibit. If we are, we make a complete collection per design: small, medium and large.”

The tigbao trays and placemats, aside from the popular coco shell frames, put Babylan at number 8 on the top 10 best sellers list at the Association of Negros Producers’ (ANP) showroom.  Twice, the Bulawan award went to Babylan for best product design in the houseware category.

Relying on hard work

Success did not come easily to the Maderas. Baby Madera worked in a drug store and by the time she resigned to be a full-time mother, she had saved up Php10,000 of their combined earnings. “I’m something of a tightwad,” she laughed. Armed with their savings and her strong belief in her husband’s skill in designing, she encouraged Roland to put up their own business.

Babylan, which was named after the Madera’s daughter, set up their first production site right under their house, then a nipa hut built on stilts because the area where it sat was reclaimed from a swamp. The ground area served as the workstation and neighbors, who still work with them to this day, were recruited as workers. The community still squats on government land, and they know they can be evicted any time.

Babylan got its first break from the House of Negros, a local association of Negros producers. “I was already known for designing furniture and table tops so House of Negros asked me to display and sell my work at its showroom, free of charge,” said Roland. This time, he focused on handicrafts, perhaps because these were cheaper to produce than furniture.

“We sent samples of embossed picture frames made from coco shells to the House of Negros,” said Baby. “ These were sold the minute they were put on display. We felt then that we had the potential.”

“Our first customer was Mrs. Recker, the wife of a hotel manager in Baguio,” Baby recalled. “She placed an order for P20,000 worth of products, a big amount then, and gave us a 50% cash advance for the raw materials.”

Unfortunately Mrs. Recker died when a killer quake struck Baguio. However other buyers came, attracted by Babylan’s growing product lines. Small items like utility boxes, key chains and other souvenirs became fast selling items, along with tigbao products with inlay. Still Babylan’s unique market niche was coco crafts.

Then came the bigger trade exhibits that meant more sales.  Roland was no greenhorn to CITEM fairs. “I had attended CITEM exhibits for my previous employer for five years. I have become familiar with the trends,” he said. “So I had an idea of what the market wants, unlike those who were just beginners.”

When the Madera’s needed a loan so they could join the trade fairs, Care Philippines, an NGO, served as a co-maker for short-term loans of Php 20,000 to 30,000 from a rural bank.  The additional funds enabled Babylan to meet more orders and pay back the loan after every exhibit. This went on for two years until financing from the Technology and Livelihood Resource Center became available for Negros producers, who by this time had formed a new organization, called the Association of Negros Producers. Loans were made available for use in exhibits.

While credit provided them with breathing space, the Maderas felt that most of their earnings went to payments of interest rates and service charges. They dropped the idea of borrowing altogether. “Nothing will happen if you keep on borrowing,” said Roland. Baby agreed: “If you have loans, you can’t sleep.”

The couple decided to rely on their own resources, which meant plowing back most of what they earned into the business.  “We were able to do that because we don’t have any vices,” said Baby.  “My husband does not drink nor hang out with a barkada.  And we are both workaholics. He handles production, I handle the marketing.  I go to exhibits in Manila and just phone to consult him about purchase orders or problems.”

Partly because capital was scarce and partly because of their business philosophy, the Maderas decided to build their business slowly but surely. The starting workforce of three workers expanded to eight on the fifth year. As funds became available, they acquired machinery, carpentry tools and equipment such as circular saws, planers, grinders, electric drills and a computer for recording and keeping track of transactions.

Going for export

Babylan now exports 40% of their products to New York, New Jersey, Hawaii and Jordan. Its local markets are Negros, Manila, Cebu, Iloilo, Boracay and Davao. Baby confessed that the orders were not big enough to fill up a small container van. “We don’t mind if an order is small so long as it’s a sure deal,” said Roland, adding that exporting can be very demanding. “Some producers bigger than us exported but lost after two years. You meet a host of problems.  You get slapped with a penalty if you miss the delivery date.  If you meet the deadline but your quality is poor, your product is rejected. That is why we don’t take more than we can handle.”

They added that the flow of income is more or less even (no ups and downs) and that the local and export markets complement each other.

Workers as family

Like other community-based entreprise, neighbors get first crack at employment, and relations are more humanitarian than utilitarian.  Baby talked of a handicapped worker who was good at lamination, and a 25-year old trimmer who left school to take care of younger siblings when their father died.

“Our workers are like family,” she said.  “They can approach us anytime for a loan or if they have family or personal problems.” Since there are no supervisors, the workers go direct to the Maderas for their needs, and the Maderas, too, share the work in production, packing and quality control.

Babylan has four regular workers, while 10 to 12 others work part-time either in the factory or at home. “The more orders we get, the more work we can farm out,” Baby stressed.  The regulars have social security benefits, a one-year health insurance, and a bonus during Christmas.

The Maderas feel they have done their best share as fair traders.  “Our workers won’t have stayed with us this long if we were not fair traders,” said Baby.

The couple said they get applicants even if there are no job vacancies available. “They come here maybe because we pay higher than those in the same business.  Otherwise, they would have stayed where they were,” Roland added.

Majority of Babylan workers are pakyaw (paid per piece they produce). Pay per week ranges from P1,000 to more than P2,000 per worker, depending on the bulk of orders.  “If I have no orders,” Roland said, “I just let the workers make stocks. They earn only P700 or less but that way they continue to have work.”

Babylan’s highest paid workers are the laminator (P1,000 to P3,000 a week) and a carpenter (from P1,500 to P2,500 a week).  A paster earns no more than P2,000 a week because his work is light.

Getting support from networks

Babylan is able to stretch its meager resources by tapping government and non-government groups that support small and micro-enterprises. As a member of the Association of Negros Producers, Babylan taps ANP’s showroom in Bacolod City as well as the local trade fairs it initiates.

For product design and participation in national trade fairs, the couple acknowledged support from the Association of Partners for Fairer Trade, Inc. (APTFI), a non-government organization. “APFTI has subsidized payment for the booths for two consecutive years and it’s now inviting us to apply for another subsidy to the CITEM fair,” said Baby.

Roland, on the other hand, gave credit to APFTI designer Julius Bolinas for introducing new coco designs which enabled them to expand their product line. “His design for a laminated young coconut is selling up to now,” he said. (show picture here).

This bestseller has inspired Roland to expand Julius’ creation into another item – the young coconut candle holder – and also solve one production problem. “We buy young coconuts 500 pieces in a batch,” he said. “My problem was only around 200 pieces are usually big enough for Julius’ design. The rest were rejects. This was quite expensive since each coconut cost me P13 and we either gave them away to neighbors or threw them. What I did was to use the smaller nuts to make candle holders.”

The couple also bewailed that the price of raw materials has gone up: from P960 to P1,875 per can for resin, and from P6 to P13 for a young coconut. Given the lingering economic pinch, the Maderas believe that their business can continue to do good only if there is a favorable three-way deal: a reasonable profit for the manufacturer, fair compensation for their workers, and fair price and good quality for their customers.

“We only have one child more to send to college,” said Roland. “The more money you have, the more problems you get.”

This article is 1st of a series of  stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

When the door of the export market closed on her three years ago, Mely Rentillo decided to open a window elsewhere. She looked for domestic buyers and came up with new products to please them. Today she leads other Aklan entrepreneurs whose goal is to establish a market in Boracay and eventually, other key resorts in the Philippines.

Mely Rentillo was the principal of an exclusive girl’s school in Metro Manila until she moved back to her home province, got married and opened up a raffia craft factory. The change seemed abrupt – from managing rowdy girls to making raffia products. But Mely, a “management type of person,” proved as good in running a business.

Mely formed Rentillo Enterprises in 1998. The enterprise works with raffia, a fiber from the buri palm. Raffia is taken from the midrib of young buri leaves that have been scraped clean of their coating, soaked in a chemical to soften, cut into strips with a comb and hang out to dry.

Extracting raffia is as painstaking as extracting piña and abaca fibers, which are Aklan’s main fiber products. Of the three, raffia is considered the lowliest and cheapest. Rentillo Enterprises is thus shackled by having a low-priced material to begin with. Said Mely, “Raffia is cheap compared to piña and you cannot raise the price as much as you want. Buyers don’t see all the tediousness that goes into that thing.”

Mely’s firm prospered between 1999 to 2002 with its two sizeable export markets – her sister, a businesswoman who lived in the U.S. and Accent de Ville, a Canadian firm referred by the Canadian International Development Agency. “I had a hundred people at that time,” she said, “and I was one of the biggest employers in town next to government.” Rentillo’s main products for these markets were placemats, runners and assorted gift items.

These markets dried up when Mely’s sister landed a high paying job and closed shop; Accent de Ville found it cheaper to source products from Mexico than come all the way to the Philippines.

Home is where the market is

Mely scanned the nearest local market: Boracay, an island off Aklan. Boracay has become Aklan’s pride and the country’s premier beach resort. Tourist arrivals average 3,000 a day in peak seasons. More are expected as Aklan’s governor and the Department of Tourism spruce up the island and advertise it as the “in” place to be.

“The RORO (a series of highways and barges connecting major islands in the country) also helped because it’s easy now to go to Boracay,” Mely said. “Students from Manila take the RORO to spend weekends there.”

“Boracay is a very good market,” she added, “but I tell people who want to come here that Filipinos – not foreigners – are the ones who buy the most products. We are fond of souvenirs and pasalubong (gifts from those who travel). Foreigners are not like that and they don’t want to carry all that baggage.”

Mely’s bestsellers are bags made from raffia sewed with denims and other materials.

“I’ve always resisted making bags since everybody’s been doing bags,” she said. “But that is what the local market wants. Wallets, placemats, shawls are also very saleable. Throw pillows and picture frames with the name Boracay are picking up. People buy them simply because of the name.”

Hugod Aklanon

Melly forayed into Boracay with fellow members of the Hugod Aklanon Producers’ Association. Hugod is the Aklanon word for hard-working and diligent. While collectively, most members may have these virtues, individually they lacked resources to do mainstream marketing.

The association was founded in 2000 and has 27 members and Mely as president. Members are mostly micro or small, producing assorted handicrafts, garments and food products. Members chipped in to open an outlet in Boracay called Hugod cum Lifestyle.

“Hugod Aklanon is now recognized as the one representing the majority of producers in the province,” she said. “We have many groups in Aklan but Hugod Aklanon is geared towards marketing. We are one of a few groups who have paid staff to focus on these things.”

“I (and other members as well) couldn’t have been in Boracay were it not for the association,” Mely said.  “Rental is expensive. We spent Php30,000 just to get the rights, and spent another Php25,000 to renovate it. Members contributed Php5,000 each and got additional funds from the Governor. For all members, Boracay has really been a blessing. But we still have to find ways to make food products like tusino and longganisa saleable.”

Rentillo is the top seller when it comes to handicrafts, while overall top in sales are shawls and other piña products from La Herminia.

“Hugod Aklanon’s strategy is to become strong and big enough so we can go to the different resorts,” Mely said. “We can go to Davao, Puerto Prinsesa or Puerto Galera, why not. We also want to go to Market Market in Makati but we have to do it slowly.”

Hugod’s Boracay outlet carries the products of more than 20 members. These range from bags, placemats, throw pillows, shawls, barongs and handmade paper. Sales started picking up last year. The store grosses around PhpP20,000 a day but sales have peaked to Php40,000 to 50,000 a day in November, December, Holy week and the summer vacation. “Actually we can sell more if we can accept credit cards,” said Mely, “but we’re having some problems working that out.“

Getting back on track

Mely is getting her firm back on track with help from her partners, namely DOT, the Department of Trade and Industry, which also referred her to APFTI. “DTI is trying to make it easy for us to join CITEM this October,” she said. “We’re preparing for that and hopefully it will get us somewhere. We really have to work very hard.”

APFTI has helped Rentillo Enterprises through seminars and in-depth coaching. “Regi Gaza (APFTI’s field consultant) is helping me analyze the company and make it better by getting our books, organizational chart, operations manual, marketing and business plans straightened out, which I am very grateful for. I tend to get occupied with a lot of things and it helps when somebody comes to discuss these things with me.”

Rentillo Enterprises is still looking for a long-term buyer. But what consoles Mely is the fact that she has established the firm’s reputation “as somebody to go to when they want raffia.” She is also recognized for being the best dyer of raffia and gets consulted by other producers with dyeing problems.

“We have book where we have all the colors and formula, plus where raffia and dye came from. I found out from long experience that you get different results from dyes depending on the source,” she said. “I invested a lot of time and resources on these.” Mely also opened her own raffia plantation to make sure that she got the quality she wanted.

“To make really brilliant colors, you have to use first class raffia,” she said. “If you buy that outside, you don’t know what you’ll get. My people have been with me since we started manufacturing in 1990 so they know exactly what I want.”

“Quality,” Mely explained, “is part of our trademark and that’s what I want to be known for. Of course that’s also a problem because our raffia costs more. People who want to buy my rolls back out when they find it’s more expensive. That’s why I prefer finished product since these have value added. I’m particular not only about quality but also about the price because we’re trying to get into fair trade.”

The challenge of fair trade

Rentillo Enterprises was introduced to fair trade by APFTI.  “You have to go by their standards,” said Mely. “For me this is simply treating your workers fairly. Being able to afford their SSS, etc. which is the only right thing to do. I was an employee once so I know what it was to have SSS and health insurance. I want these for them.”

Mely said, “At this moment, it’s still a struggle to do fair trade. The workers who make raffia don’t make money. They are exploited. I used to buy raw materials by the ton when I had a lot of workers. I paid for their food and transportation aside from their regular pay. Other buyers got mad with me because workers did not want to work for them anymore since I paid better.

“But we can’t afford social security benefits and the minimum wage yet because the work has always been seasonal. What I really want to do is to increase volume because this is the only way you can increase their pay. (Daily pay ranges from Php70 to 100 pesos.)That’s why I go to trade shows to meet buyers. With an expanded market hopefully I can do it.”

At present, Mely divides her time between her business and Hugod Aklanon. “What I’d like to see is an industry that is vibrant, alive and dynamic,” she said. “That means we’ll be able to provide more work for people.”

Mely has no plans to shift to higher value fibers. “I want to stick to raffia because it’s a traditional craft in Aklan so you keep all these traditions alive,” she said. “But it cannot stay the same. I’d like to provide factory type employment to people. If I work with Hugod Aklanon and get it to develop, we grow as a whole. You carry a lot of people with you.  So the success of Boracay is for everybody, the big and the small.”

This article is part of a series of  stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.

Alan Tumbokon owes his good fortune to piña weaving. Laid off after five years as a casual employee of the Department of Public Works and Highways, he convinced his mother Herminia to start a family business. Herminia was one of the pioneer piña weavers of Aklan. It was only fitting that the business carry her name.

La Herminia was established in 1996 and has become one of the finest piña cloth makers in the province. Its clients include top Filipino fashion designers like Barge Ramos, Pitoy Moreno, Rajo Laurel and Nono Palmos.

The company now employs 144 workers and farms out jobs to a number of communities in Aklan – a far cry from the early days when the only workers were Alan, his mother and another weaver. Assets have grown from Php150,000 in 1996 to more than Php4 million at present.

Aside from maintaining La Herminia’s good standing, Alan’s growing concern is to strengthen the piña weaving industry. He believes that this industry will survive and thrive only if the weavers, scrapers and all other people involved get a fair share from the fruits of their labor.

Cloth from pineapple

Piña is a cloth made from the mature leaves of the pineapple (ananas comosus or the Red Spanish variety). It is produced only in the Philippines, and mostly by weavers of Aklan and to some extent, Negros Oriental and Palawan.

Aklan, a province in Western Visayas, has been producing piña cloth since the 15th century. A Spanish decree helped promote piña cloth weaving by teaching the craft to young girls.

Handwoven piña cloth was then described as “one of the most beautiful fabrics of Manila, used only in the dress of the wealthy, being too costly for common use.” It has always been considered a fabric of the elite, because of its diaphanous and delicate look as well as durability. Piña was also used to pay royal tribute or poll tax imposed on the inhabitants. Piña cloth weaving reached its peak in the late 18th century and in the first half of the 19thcentury.

Mass produced local and imported textiles nearly drove the piña cloth to extinction.

In the 1980s, however, Filipiña designer Patis Tesoro resurrected piña in Philippine haute couture. Being a well respected and much sought after designer of the Philippine elite, Tesoro’s advocacy proved effective. Other top Filipino designers now use piña cloth for formal wear and piña-producing enterprises are once again alive in Aklan.

The cloth is made into the barong Tagalog, a male dress shirt which is also the Philippines’ national costume, as well as kimonos, paneulos (shawls), gowns, handkerchief, table linen and napkin, table cloth, pillow cases, fans and other household items.

Being good at what one does

Alan had been in charge of production and product development since the business opened. To familiarize himself with the trade, he asked his mother to train him and became a skilled weaver himself. Alan, however, found weaving to be an intricate and tedious process. He decided to use his technical background (he is a civil engineer) to improve traditional methods of making piña cloth.

With the help of his sister Arlene, La Herminia’s marketing manager, Alan sought assistance from the Philippine Textile Research Institute (PTRI) and learned the use of the multi-harness loom. “That technology enables you to make barongs using several harnesses,” he explained. “We developed the technology further to produce barongs of different designs. At that time, we were the only enterprise in Aklan using that technology, perhaps because the others did not bother to tap PTRI. We commanded a good price because La Herminia was the only outfit producing them.”

Unfortunately, one of La Herminia’s expert weavers leaked the technology to other competitors. Multi-designed barongs soon flooded the market, drove prices down and robbed La Herminia of its market niche.

Unfazed by this experience, Alan continued to seek ways to innovate on the product.

With PTRI’s help, La Herminia produced natural dyed piña in colors such as blue, reladon green, lilac, lavender, pink, red, maroon, orange, yellow, mat gold, black and gray. “Some buyers specify natural dyes because these are environment-friendly and less hazardous to those using it,” he said.  “We don’t use strong chemicals like alum. Natural dyes are better than synthetic chemicals.”

Natural dyes are made from herbs and trees that grow in the province and are easily replenished. Yellow is produced from luyang dilaw (turmeric), orange from the bark of a noni tree, pink from the sapang tree, brown from the coconut husk, indigo from the bark of a duhat tree and black from the leaves of the talisay.

With the help of a local fabricator of a semi-mechanized loom, Alan also developed wider and sturdier semi-mechanized looms that could weave cloths 36 inches, 45 inches and 60 inches in width. Traditional handlooms produced fabric that was only 30 inches wide.

Innovation and good business

“In the early years, our product was only plain piña which we sold to Lumban where it was embroidered and made into barongs,” Alan said. That deal prove unprofitable for La Herminia. Checks sometimes bounced and were almost always postdated. The family thus decided to make their own finished products and to branch out to other products.

“We believed that if we carried unique products, we could sell these for a good price because we are the only ones producing it,” Alan said. “It’s good to continue doing product development because if you hit something that the market likes, you recover your investment.”

“Only a few piña enterprises invest in product development,” he said. “They make do with turning out the same products, or copying new trends their competitors have developed.”

With the help of groups such as APFTI and DTI, La Herminia widened its product lines to include organic dyed and undyed piña/piña seda cloth, shawls, scarves, barongs, table runners, placemats, fans, bags, piña/piña seda “sinuksok” (inlaid design) cloth, seda cloth, abaca/abaca seda cloth, and spun silk shawls. The smaller items like bags were made from leftover scraps of cloth.

APFTI and DTI also helped La Herminia join local trade fairs and national and international exhibits sponsored by CITEM. APFTI and DTI sent designers to La Herminia and subsidized fees for the trade fairs. “The designers gave us designs and we made 72 new prototypes in all,” Alan said.

La Herminia did well at the fairs, garnering the Best Product Design award at the FAME International Katha Fashion competition of 2004, the Best Product-Shawl Category at the 4^th Aklan Fiber Festival of 2003, and the Best Dressed Booth at the SME Selling fair of 2002.

More products to sell translated into higher sales for La Herminia, both at the local and export markets. Export markets included France, Japan, the U.S., Hong Kong and South Africa. As sales went up, La Herminia’s labor force increased from 50 in 2000 to more than 150 direct workers and 400 indirect workers such as fiber scrapers, knotters and warpers.

Labor’s just share

Producing piña cloth is a labor-intensive, time-consuming and intricate process that has remained unchanged over the years. “Scrapers” gather the leaves and scrape these immediately after harvest, using seashells (kabibe), coconut shells or broken porcelain plate.

Two fibers are extracted: the liniwan (white, fine fiber, strong fiber) and the bastos (coarse, brownish, low in strength fiber).  Individual fibers are knotted from end to end to produce long continuous threads; care is taken that knots are not visible in the finished product.

The fibers are woven together into a cloth using a wooden loom. Because piña fibers are so fine, it takes even a skilled weaver two days to produce one meter of cloth.

The structure of the piña industry is lopsided in favor of traders and buyers, who control prices at every stage of production, from extraction of the fiber to the creation of finished goods. Most buyers offer low prices for piña products, perhaps because they don’t see any art in it and are just out to make a quick profit.

“Scrapers who supply other buyers complained to me that their buyers get the piña fibers at only Php1,600 per kilo,” Alan said. (La Herminia paid its lone scraper-supplier Php2,000 per kilo.) “The scrapers’ actual income is only half of that (Php800), if you deduct what they spent for the piña leaves transportation and all other expenses. A hard working scraper can earn a maximum of Php4,000 a month. On top of that, unscrupulous traders do not pay them on time.”

An oversupply of piña fiber enables traders to keep the price low. Alan started buying piña fiber from other scrapers at a higher price to help them out. But the problem was not solved since the scrapers continued to sell fiber to traders at a much lower price. “I advised them to form a cooperative if they want to have bargaining power,” Alan said.

Knotters (workers who knot the fibers to the piña threads) and weavers share the same plight as the scrapers. Unscrupulous traders underprice the knotters’ products by Php30 per bas-ing.  Weavers earn only P30 to 40 for every meter of cloth they sell to traders. A weaver of average skills usually earn P4,500 a month. At La Herminia’s, they can earn as high as Php9,000 if their work is of fine quality.

Alan said the proliferation of cheap barongs also does harm to the industry. “Other manufacturers can sell their barongs at very low prices – almost half of what we spend for raw materials alone – because they underpay the producers. For instance, they can sell a barong for only P1,800 because they pay their weavers only P380 to P400 per barong, which takes them three to four days to finish. We cannot sell cheap since we pay our weavers Php 800, and also pay taxes and have overhead costs.”

Alan’s wife Nilda, who keeps the books for the family business, added that some buyers consider only the price and not the quality. “We had a buyer in Manila who went to other traders whose barongs cost much less. That buyer came back to us after a year and a half. He could not sell the cheap barongs because the quality was inferior.”

“For some buyers, piña cloth is just piña cloth,” Alan chipped in. “They realize the difference only when they use the product. The fabric frays after one washing.”

Alan and Nilda believe that piña traders and manufacturers can afford to give the scrapers and weavers a better deal because they can pass on the additional cost through a higher selling price. “When weavers and scrapers earn only a pittance for their labor, the quality of their work suffers. To earn more, they go for volume and never mind about quality,” Alan said.

The couple cited two other piña manufacturers, the Dela Cruz House of Piña and India Legaspi who treat their people well and have concern for the growth of the industry. However, the industry needs more advocates for it to flourish.

“Piña weaving nearly vanished but has been revived,” Alan said.  “We should take care of the industry and its people. The industry may die if piña products are underpriced and workers are underpaid. Aside from Ati-atihan and Boracay, piña is Aklan’s source of pride. My dream is to give Aklan weaving a name.”

This article is part of a series of  stories on Fair Trade Enterprises in the Philippines. TravelTales, Inc. supports the advocacy in promoting Fair Trade in the Philippines and Fair Trade in Tourism through APFTI (Advocate of Philippine Fair Trade, Inc.)

The Advocate of Philippine Fair Trade, Inc. (APFTI) is a non-government organization, which seeks to contribute to poverty alleviation through its advocacy of Fair Trade practices and the provision of business development services to the micro, cottage and small enterprises (MCSEs) in the country.

 APFTI enhances the entrepreneurship of the producers by aiding them in their business activities from raw materials sourcing to product development to market access to training and the upgrading of their skills and technology. By addressing some major difficulties encountered by an emerging enterprise, for instance, we strengthen its chances of becoming a competitive participant in the domestic and global markets.

It is hoped that through these stories, more people will be encouraged to travel the Philippines and support local enterprises that practice Fair Trade. This means that whenever you buy Fair Trade products, you are not just supporting the local economy but you are also helping producers to observe socially and environmentally just practices, such as promoting gender equity, payment of fair wages, non-employment of children, and protecting the environment. And as we support these Fair Trade producers, we also become RESPONSIBLE TRAVELERS because we are  supporting positive change in local communities.