BIZ BUZZ: DA drops Cocochem takeover plan

The Department of Agriculture (DA) once toyed with the idea of acquiring United Coconut Chemicals Inc. (Cocochem), once the largest coconut chemicals and oleo fats factory in Southeast Asia.

The agency wanted to take over Cocochem to “safeguard the welfare of local coconut farmers.” Agriculture Secretary Francisco Tiu Laurel Jr. even visited Cocochem facilities in Batangas last month as part of its fact-finding exercise.

The DA wanted Cocochem to capture rising demand for coconut-based products, particularly in Europe.

But now, that plan is off the table.

“We will give up [on] the idea since we have no time and budget for now,” Tiu Laurel told Biz Buzz.

The DA, after all, will have its hands full this year overseeing the development of farm-to-market road projects, alongside other programs to protect farmers and consumers.

With the agri agency’s refusal, the Department of Finance (DOF) may start screening other investors.

State-run Land Bank of the Philippines launched the sale in February last year, offering 681.96 million shares in Cocochem. It expected to generate P2.8 billion from this transaction.

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The DOF told Biz Buzz via email that 13 registered bidders had signified interest and attended the pre-bid conference last June. The government, however, deferred the sale to give more time for due diligence.

According to the DA, acquiring Cocochem, which primarily earns from land leases, housing rentals and other services, would allow private investors to revive or repurpose the asset.

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