Agri machinery provider ADAMCO raises Php1.0 billion pesos from DBP and Security Bank
“Planting rice is never fun, bent from morning to the set of sun. Cannot stand and cannot sit, cannot rest for a little bit.“
The playful song makes light of an accepted fact of life — it’s hard to be a farmer. So hard that the typical farmer today approaching his senior years, simply does not want the same life for his children. And so, the country faces a looming fundamental problem — who will feed us?
Ada Manufacturing Corporation (ADAMCO) provides a beacon of hope with their simple, powerful solution: the farmer as entrepreneur. ADAMCO drives forward this solution, a paradigm shift, by presenting to the farmer-entrepreneur that he can make a profitable business from his agri-machinery acquisition by using these to provide services to his fellow farmers in land preparation, tilling, transplanting, and harvesting. And ADAMCO makes acquisition happen quickly in 37 branches located nationwide in the country’s top rice-producing regions.
This February 2022, the Development Bank of the Philippines and Security Bank Corporation demonstrated their strong support for ADAMCO’s initiatives by participating in the One Billion Peso (Php1,000,000,000.00) Corporate Notes Facility arranged by GIV Capital Holdings Corp. on behalf of ADAMCO. The Notes have a five-year tenor, with principal to be repaid in equal quarterly payments. The proceeds will be used to support the Company’s capital expenditure and working capital requirements related to the development of its branch network.
Left to right: Divino Lorenzo F. Villanueva III Director GIV Capital Holdings Corporation, Jeffrey D. Ligsay AVP – Trust Banking Group Development Bank of the Philippines, Ma. Felicia S. Magtibay SAVP – Trust Banking Group Development Bank of the Philippines, Francis Nicolas M. Chua FVP – Corporate Finance Group Development Bank of the Philippines, Virgilio “Vio” Chua President SB Capital Investment Corporation, Jorge Lindley Ong SVP and Head of Banking Centers Group, Virginia “Babet” Del Rosario VP and Head of Ortigas Banking Center 1, Paul D. Lazaro SVP – Head of Development Lending Sector Development Bank of the Philippines, Emmanuel G. Herbosa President and CEO Development Bank of the Philippines, Conrado A. Gloria, Jr.President and CEO GIV Capital Holdings Corporation, Roberto P. Alingog Chairman of the Board ADA Manufacturing Corporation, Ada Alethea A. Alingog-Nanayakkara President and CEO, Maritess Gallardo Chief Finance and Administrative Officer, Charles M. Rodriguez EVP and Head of Wholesale Banking Segment.
“We deeply appreciate the support of GIV Capital, DBP and Security Bank for what we are trying to do for the country. My firm belief is that agriculture should be taken as a promising business, and not as a dreaded occupational destination of the children of farmers. We do this by providing access to top-notch equipment with reasonable financing terms.” says Mr. Roberto P. Alingog, Founder and Chairman of ADAMCO. “With this fundraise, we will further solidify our presence in the industry and show the country at large a simple truth — that farmers can make money in modernized farming.”
“DBP shares the vision of ADAMCO in promoting modernity and technological advancement in the agricultural sector, and in providing our farmers access to modern agricultural machinery. Like ADAMCO, we also believe that modernization is a key element to agricultural productivity, which is why it is our honor to be a part of this funding activity that aims to benefit our Filipino farmers and agripreneurs.”, says Mr. Emmanuel G. Herbosa, President and CEO of DBP.
Security Bank believes that its funding extension to ADAMCO will go a long way in supporting our farmers who produce our food. This is also a clear way of responding to the call of government for the Banks to devote part of their portfolio to support the Agriculture industry. “This Corporate Notes Facility is an important milestone in ADAMCO’s mission to help transform the agricultural sector, and we look forward to support the company in its future endeavors. We’re proud to support these projects that align with our mission to enrich lives, empower businesses, and build communities sustainably through financial service excellence.” shares Mr. Charles M. Rodriguez, Executive Vice President and Head of Wholesale Banking Segment of Security Bank.
ADAMCO had its humble roots in the 1970’s after its founder witnessed the lack of the simplest motorized equipment in his home province of Isabela. The decades since have seen his business develop into the leading dealer of agricultural equipment in the Philippines.
“In rice farming, mechanization is key. Since its introduction, Rice Combine Harvesters (RCH) have been a hit among farmers. On top of reducing harvesting losses at an average rate of ten percent (10%) through a superior process, the RCH also further reduces harvesting losses because of the attendant timeliness and speed. Prior to the introduction of RCH, it will require twenty-five (25) farm laborers to harvest one (1) hectare in one day. There are labor contractors who would promise to bring the twenty-five (25) farm laborers on a certain agreed date when the rice crop is ready to be harvested. On that date however, the contractor will bring five (5) people to harvest. The harvesting will therefore be delayed. Like any fruit, palay grain when matured, falls to the ground. This is called “splintering”. Palay has a splintering rate of two percent (2%) per day. Hence, the delay caused by the lack of enough manpower results into substantial losses to the farmer. This labor shortage situation is partly explained by the planting schedules which are aligned with water availability. When irrigation dams have enough water and is released for field irrigation, all the irrigation beneficiaries start to till. Hence, they also all harvest within a narrow period of time. It is to a farmer’s advantage if he goes along with the schedule otherwise if he is late in planting and late in harvesting, all the pest in the surrounding harvested fields will converge on this remaining unharvested field causing high losses for the farmer. Modern machineries like tractors, transplanters, and rice combine harvesters is therefore the key to more efficient farming. ” explains Mr. Alingog.
Will mechanization result into unemployment for the farm laborers? “Since the 1970’s, when the Philippines first started pushing for mechanized agri-machinery adoption, the theory that agri-machinery will displace farm labor and result to massive unemployment in the countryside has been hounding government policy-makers. However, there has never been a report that there was indeed a large displacement of farm labor resulting into massive unemployment. What was observed ever since was that farm labor had always been in short supply. One reason was that farming families did not want (and still do not want) their children to become traditional farmers who would do farming work manually. They aspire to send their children to become employees in other industries, even as OFWs. Hence, the farmers who grow old and retire are not replenished in the same rate resulting into fewer and older farmers with a high average age of farmers at fifty-seven (57) years old. Hence, the perennial shortage of farm labor.” says Mr. Federico De Guzman, Product Development Director of ADAMCO.
“It is always very heart-warming to see the excitement in the eyes of the farmers when we deliver the agri-machinery to them and teach them how to operate the machines. Their feeling of going to the next higher level of economic life is intense and palpable” shares Ms. Ada Alethea A. Alingog-Nanayakkara, President of ADAMCO.
ADAMCO is ably supported in its mission by the well-established Yanmar brand of Japan, manufacturer of a wide range of agricultural machinery like rice combine harvesters, tractors, and transplanters with ADAMCO as its sole dealer in the Philippines. “We’re very pleased to see the strong growth that ADAMCO has shown since we established our partnership with them. The Philippine agriculture sector has so much untapped potential and we believe Yanmar and ADAMCO have found the right approach to mechanize the industry and help bring the country to the status it deserves,” Mr. Masatoshi Suyama, President of Yanmar Philippines Corporation (YPC) said.
Looking ahead, much work still needs to be done. Mr. Conrado A. Gloria, Jr., President & CEO of GIV Capital Holdings Corp., the financial advisor of ADAMCO and the Arranger for the Corporate Notes Facility, elaborates: “This transaction is only the beginning for ADAMCO. Its mission of spurring development at the grassroots level of agriculture is of utmost importance to the country, and ADAMCO’s unique approach, the farmer as entrepreneur, is a transformative one.”
New initiatives from both the private and public sector will be needed to fully address the food security issues the country will face. At least one player is raring to take on the challenge — “For as long as people will eat, there will be agriculture;” declares Mr. Alingog. “and for as long as agriculture is needed to provide the food, there will be ADAMCO.”
It seems planting rice can be fun after all.
For more information, visit their website at adamco.ph or at their Facebook page at www.facebook.com/adamcoph.
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