BOI nods essential oil export producer project

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1/17/2022 6:45:00 AM

The Board of Investments (BOI) has approved the application for registration of Iba Botanicals Inc. as new export producer of pure essential oils in partnership with the Aeta communities in Zambales. READ:

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essential oilIba Botanicals has project cost of P109.5 million and is expected to start its commercial operation this month. The project was registered under Republic Act (R.A.) No. 11534 or Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act based on the “Export Activities,” of the 2020 Investment Priorities Plan (IPP) as the transitional SIPP.

The project has capacity of 35.6 metric tons or 35,688 kilograms per year. The said company employs organic farming techniques, and is in the process of securing a third party international organic certification. It will engage in the production of export products, particularly essential oils from ylang-ylang, vetiver and elemi species.

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The Board of Investments (BOI) has approved the application for registration of Iba Botanicals Inc. as new export producer of pure essential oils in partnership with the Aeta communities in Zambales. essential oil Iba Botanicals has project cost of P109.5 million and is expected to start its commercial operation this month. The project was registered under Republic Act (R.A.) No. 11534 or Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act based on the “Export Activities,” of the 2020 Investment Priorities Plan (IPP) as the transitional SIPP. The project has capacity of 35.6 metric tons or 35,688 kilograms per year. The said company employs organic farming techniques, and is in the process of securing a third party international organic certification. It will engage in the production of export products, particularly essential oils from ylang-ylang, vetiver and elemi species. It will export 100 percent of its total production to the USA, Europe, and Asia. The company will produce essential oils intended for export to Asian countries like India, Thailand, Malaysia and Singapore. With its high potential for job creation, the firm is projected to generate a total of 430 jobs in its fifth year of operation. The company will engage up to 200 workers directly from a community in the vetiver plantations located in San Juan, Zambales. Wit projected earnings of P245.28 million, the project could help reduce poverty incidence in Region III or Central Luzon, which ranked 3rd among the regions with the highest unemployment rate at 8.8 percent as of September 2021. Essential oils are aromatic essences extracted from plants, flowers, trees, fruits, bark, grasses and seeds, and are essential inputs used in the production of perfumery, personal and heath care, pharmaceuticals, cosmetics, household care, food and beverage industries, among others. In the Philippines, some of the common essential oils used in aromatherapy extracted from endemic plants in the country are ylang-ylang (cananga odorata), lemon grass (citronella), patchouli, vetiver, castor seeds (castor oil), pili, eucalyptus (mint), malunggay, sampaguita, sambong, and ginger. In the last five years, export of essential oils has been erratic. The global essential oils market size is estimated to be valued at $10.3 billion in 2021 and is expected to reach a value of $16 billion by 2026. Extensive Research and Development (R&D) has been conducted to develop the demand for the products by the firm, which includes the establishment of trail plantation areas in order for the sample product to be produced for testing and market development. The firm has been coordinating closely with the local Aeta communities for the plantation of the species. Specifically located at the ABS-CBN Eco Village, Barangay Palanginan, the firm is hiring up to 80 workers from the Aeta community. Serving as the primary production site, the Eco Village has been contracted to the company, formerly named Elysian Essential Oils Philippines Inc., pursuant to a 25-year usufruct agreement that will last until 2043. In 1993, the said property was acquired by the late Gina Lopez, following the eruption of Mt. Pinatubo, leading to the resettlement of 85 Aeta families to the property coupled with the creation of livelihood initiatives for them. Plantation areas, usually occupied by Aeta communities, will support the raw material requirements of the firm. As of 31 July 2021, Iba Botanicals have advanced P1.92 million funding to the said communities in support of the project. Also, from January to August 27 this year, the firm paid P4.48 million in wages to Aeta community members involved with plantation activities. Moreover, the firm’s partner, Mead Foundation, Inc. will provide community development; installation of clean water system; nutrition and feeding program for the Aeta community; medical missions; reforestation; and marine conservation in the area.