The cream of Asian crop producers
STEADY GROWTH IN THE FACE OF NATURAL CRISES HAS OPENED UP THE PHILIPPINE AGRICULTURAL SECTOR TO INVESTORS, WITH COMPANIES SUCH AS DEL MONTE PHILIPPINES FLOURISHING AS A RESULT

PINEAPPLES GALORE Del Monte Philippines’ Mindanao plantation covers some 40,000 acres.

The Philippine agriculture sector is another industry the government is promoting in its bid to end poverty by the end of the decade. The archipelago’s year-round tropical climate has attracted some of the biggest multinational names in the agri-business, which have both the financial resources and experience to turn the Philippine agriculture industry into a widely profitable and job-producing enterprise.
The most recognizable name by far is Del Monte Pacific and its unit Del Monte Philippines Inc., which supplies, but is not affiliated with, the U.S. Del Monte Corporation or its parent Del Monte Foods Company. This state of affairs is a result of the U.S. food and tobacco giant JR Reynolds purchasing the Del Monte Corporation in the 1980s and selling off its regional pieces. Maintaining the 110-year old Del Monte brand, however, provides the Philippine company with instant consumer recognition.

Del Monte Pacific is one of Asia’s leading producers, marketers and exporters of premium quality, branded processed fruits, beverages, tomato and other processed food products, including spaghetti sauce, ketchup and pasta, and non-processed products such as pineapples.
Del Monte Philippines owns the Del Monte Brand in that country, where it enjoys the leading market share across all major categories and operates one of the world’s largest integrated pineapple production facilities. The company also has the exclusive rights to produce and distribute food and beverage products under the Del Monte brand in the Indian subcontinent, as well as long-term supply agreements with Del Monte trademark owners and licensees in North America, Europe and Asia.

Alejandro T. Castillo President of Del Monte Philippines

“Del Monte Philippines is a separate legal entity owned by Lapanday Macondray (a leading Philippine exporter of fresh foods and a Del Monte supplier) and the European-based Del Monte International. Two years ago we had an Initial Public Offering in Singapore. The holding company is Del Monte Pacific Limited,” explains Del Monte Philippines president Alejandro T. Castillo.
Del Monte Philippines is one of the few companies in the country that has been able to flourish in the face of crisis, whether man-made or natural. “The joke here is that somebody must have forgotten to tell local Del Monte business that there was an Asian crisis, that Mount Pinatubo erupted and that Marcos was dethroned,” says Mr. Castillo.
Mr. Castillo shrugs off the joke and points to the company’s restructuring efforts. “The Lord blessed us. We have grown in spite of any crisis. In fact, our best years were during the financial crisis.” His excellent marketing skills and determination to stick to the basics also accounts for the company’s invulnerability to hard times.

“For example, at one time all of our sales were going through six distributors, and that was too expensive. So there’s a structure here where part of the business should be serviced by us and part should go to the distributors, but that entailed severing 50-year-old relationships. So we talked to them and smoothed it out. We gave them a chance to bid. Two won, four lost. We now service 65% of the business and they service 35%. The 35% is the mom and pop stores and the 65% are the supermarkets.”
The company’s one cannery is located on the southern island of Mindanao and comprises 40,000 acres or about the size of a small province. “All that is pineapple, young pineapple, medium pineapple and full-grown pineapple, it’s enough to make you sick and tired of pineapple,” Mr. Castillo jokes.
The plantation contains several communities with a total population of about 3,000 who plant and care for the pineapple. “Depending on the size, a community will have a school, church and clinic,” he concludes.