A lovely bunch of coconut products

Yoshiki Hayashi, the Japanese plant manager of a new coconut oil chemical plant here, was boasting about the quality of his products. If it was the Olympic Games, he said, Pilipinas Kao Inc. should get 8 gold medals; Procter & Gamble, 4 silver medals; and Henkel, a West German company, 2 bonze medals.

This $40 million plant, situated on the north shore of the island of Mindanao and almost in the shadow of a coconut plantation, is considered highly important by the Philippine government. It is seen as a start in making the Philippine archipelago the "coco-chemical center of the world."

Already the Philippine Islands produce more copra -- the white meat of the coconut -- than any other nation. Last year there was a poor crop, down some 18 percent from 1978. Nonetheless, the volume last year was more than 2 million tons, close to 80 percent of world production. More than 1 million farmers depend on this huge nut for their living.

Over the last decade, the government has encouraged the spread of coconut oil mills -- mills that with the aid of solvents press the oil out of copra. Now it wants to upgrade the product further by turning the oil into chemicals. This plant is already producing methyl coconate, refined glycerine, and fractionated coca alcohols. In 1982 it is scheduled to make sodium lauryl sulfate, a surfactant priced more than five times the level of coconut oil itself.

The uses of such chemicals are multitudinous. Glycerine, for instance, can be used in dynamite and other explosives, paint and adhesives, cellophane, tobacco products, cosmetics, coffee additives, anti-sticking agents for bakery products, softeners for bread, dough conditioners, synthetic cacao butter, ice cream stabilizers, and chocolate stabilizers. Sulfate goes into toothpastes, detergents, shampoos, and skin soaps. Altogether, more than 800 products can be derived from coconut oil, chemists estimate.

Imelda Romualdez Marcos, the wife of President Ferdinand E. Marcos, has also spoken of the possibility of refining coconut oil into diesel fuel. She discussed this with Yoshio Maruta, president of Kao Soap Company, in Tokyo in July after attending the funeral of Masayoshi Ohira, the late Japanese prime minister.

"It is vital for us to learn the technology of converting coconut chemicals into fuel, because this would help bring up the quality of life of the Filipinos , especially in the rural areas," she was reported as saying.

The experts have figure that coconut oil remains far too expensive so far to compete with petroleum as a fuel. Its highly refined chemical products are economic, however, and have the advantage in some cases of decomposing more easily in waste water.

In any case, the government is trying to encourage other foreign vegetable oil refiners to establish plants here. Henkel has reportedly expressed an interest.

Right now, there is a simpler operation -- Proton Chemicals Inc., in Quezon -- and the new plant here, which began its first phase of operations in June, 1979. This plant is owned 70 percent by Kao Soap and 30 percent by Aboitiz & Co., a Philippine Company.

The plant is able to produce some 30,000 tons of product per year. These products, on average, are worth some 1.6 times the value of coconut oil. The extra "value added" helps the philippine blaance of payments, since the bulk of the output is shipped to Japan and other nations in the region.

Considering the size of the Philippine coconut output, the number of these coconut oil refineries could theoretically be multiplied many times. The product, however, must compete with the products of other vegetable oils, such as soybean oil, as well as petroleum.

But Kao people like to point out that coconut oil is renewable. "White petroleum is a fossilized resource of limited availability, coconut can be reproduced perpetually," notes a corporate paper.

In fact, the Philippine government has launched a coconut tree replanting program, using more productive varieties, that could quadruple the nation's production of copra.

Mr. Hayashi, in an interview here, indicated that more government assistance in the way of tax breaks might be needed for further expansion of the coco-chemical industry. "It depends on the policy of the Philippine government, " he said. "Malaysia extends a hand and says come here. Fiji says more here. So does Sri Lanka."

However, the chemical concern already has what is termed "pioneer status," thus receiving considerable government financial incentives.

The number of Japanese on the staff here is rapidly declining. There were 30 out of some 145 people earlier this year, 15 now. Only about 4 or 5 will remain as advisers at the end of the year, Mr. Hayashi predicts.

He describes the Filipinos as "very wise, very good workers. However, they have very little experience."

The Japanese company has been training Filipino engineers and marketing staff to take over. In fact, it talks to gradually phasing out its "upstream operations" in Japan and turning them over to Pilipinas Kao.