Food for taught | Inquirer Business

Food for taught

/ 12:24 AM October 22, 2012

Indeed, these are exciting times for us: the canonization of another Filipino, St. Pedro Calungsod; the Mindanao peace agreement; and the rare appearance of our leader, Benigno Simeon (a.k.a. BS), at the concert of foreign bands in Smart-Araneta, even “dateless” at that.

Those news items can make us forget, at least for a moment, the hell of residing in Metro Manila, where the cost of living seems to rise higher than the hairline of our leader, BS.


Let me cite just two of our biggest heartaches: the terrible traffic and the increase in food prices. Galunggong now fetches P120 per kilo. For any trip in the metropolis, we must set aside at least an hour—whatever the distance.

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Official figures showed that in 2003, the bottom 30 percent of households here spent 60 percent of their income on food. Three years later in 2006 the ratio went down to 59 percent.

At such rate of “progress,” we need some 150 years just to match rich countries like the United States, where food accounts for only 10 percent of low-income household expenditure.

That is why I am rooting for this company called Calata, freshly listed at the stock market, classified by the Philippine Stock Exchange as “retail services,” although I think it is actually a “technology and knowledge” company.

Well, with the use of modern technology both in food production and distribution of farm inputs, the company stormed its way to a P2-billion a year business in just a few years. It already brought down the cost of farm inputs by chopping off layers upon layers in our outdated distribution system. Best of all, it shares its knowledge of high-tech scientific systems to farmers—for free.

Calata has a network of 100 stores in Luzon known as “Agri.” The prices of its inputs (feeds, seeds, fertilizer animal medicine) can be 10 to 20 percent lower than those of competition. With the use of modern farm technology, Calata can help farmers raise their yield by up to 60 percent.

These small steps at the farm level will hopefully translate to lower prices of food in the city. This is the ultimate goal of the brains behind the phenomenal success of the company, its 32-year-old founder—Joseph Calata, born and raised in the rural town of Plaridel in Bulacan, self-taught in the food production business.

If you talk to the young man, you can easily surmise his astute business sense. He already has a business model for Calata, apparently patterned after the biggest business in Thailand.


His mind teems with ideas on how to close what he calls the “loop” in agriculture, from the manufacture of farm inputs, going to food production, passing by distribution and back to farm production.

The company, for example, operates corn plantations in Bukidnon, with a big Argentinian group as partner. Joseph aims to sell the harvest to the San Miguel group for the manufacture of animal feeds. Calata then gets the feeds for distribution and use them in its poultry and hog farms. The “loop” thus closes.

Joseph also talks of his dream to put up buying centers all over the country for farm produce, as a way to inject “efficiency” in the distribution, which can lead to lower prices of food items at the consumer level.

Single still but already a billionaire, Joseph perhaps has now a deeply rooted fear of the stock market. His company recently had a brush with the press, supposedly because of the amazing rise in the price of its shares after the IPO listing.

But here is the thing: Nobody cared to explain why the company excited the market so much, what with its prospects in the use of modern technology in its business, hidden as mere “retail service.”

Look, the listed Calata is not just into agriculture or retail. It is more of a logistics company using high-tech methods in its business lines that only happen to focus on agriculture.

For instance, Calata has poultry farms in Bukidnon in Mindanao, which is said to be the next boom area as a result of the “peace” agreement engineered by the Aquino (Part II) administration. The farms are highly mechanized, with precise climate control, applying all sorts of technology that Joseph bought from Europe. It already cut the growing period of the birds to 30 days, from the usual 40 days, with only a handful of personnel at that.

In other words, efficiency is the name of the Calata game. Personally, I am praying for his company to succeed. Multiplied a few times, its business can trigger a downward spiral of food prices in the city.

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As for our mobility in the metropolis, we really need more mass transit systems, and yet there is trouble in the existing light rail operation called MRT. It seems the DOTC is taking a lot of shortcuts in the MRT maintenance contract.

The DOTC awarded the previous maintenance contract to Japanese firm Sumitomo, which ended last Friday, October 19. It seemed the DOTC did not want to extend the Sumitomo contract. What should happen now to the MRT, plus the safety of its 600,000 riders every day?

The DOTC wants to hire a little-known maintenance company on an “interim” basis, seemingly for the next six months, paying it some P360 million. In effect, the DOTC is buying time, for only P360 million, to conduct the bidding for the real maintenance contract.

It is a fact that DOTC already extended the Sumitomo contract some six months ago. Question: Why did it not start the bidding process at that time? Let me see…wala lang!

One of the owners of MRT is Metro Pacific Investment (or MPIC), a part of the MVP group of Manuel Pangilinan. MPIC also manages and operates the rail system. MPIC claimed that “the responsibility for procuring a new maintenance provider was transferred to the DOTC” two years ago. In short, it was not the butler but the DOTC that did it!

Anyway, the DOTC said it had chosen an “interim” maintenance company that submitted the lowest bid. From what I gathered, the DOTC selection process simply involved “six” questions that it had asked the representatives of the supposed bidders. Was one of them about the technical capability of the bidders? No, sir!

Again, it was a P360-million contract for six months, albeit a rush contract. To think, the “interim” maintenance contractor, as a company, reportedly posted an income of P13 million in 2012, equivalent to only about 4 percent of the contract price. Such is its kind of financial capability to sustain the daily operations of the MRT.

I just pray that the system does not suffer maintenance problems in the next six months, especially during the Christmas season when traffic becomes terrible. I just hope the MRT keeps on running for our sake here in Metro Manila.

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TAGS: Agriculture, Calata, Department of Transportation and Communications, food, MRT, MRT maintenance, Philippines, rail transport
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