Fs Main Report

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1.0 INTRODUCTION

1.1 Rationale / Background of the Study

The interest on ilang-ilang and sampaguita production by the members of the

Carranglan Multi-purpose Cooperative was initiated by their President, the late Soc

Rodrigo. To date, this cooperative was integrated into a bigger farmers organization,the Alyansa ng mga Kooperatiba at Samahan sa Carranglan (ALYANSA) headed by

their President, Mr. Manuel V. Tan.

The ALYANSA is a conglomeration of cooperatives and associations whose land

areas, especially those covered by the Community Based Forest Management (CBFM)

Program, ranges from rough to very rough with soil type of clay loam and sandy loam

along river flood plains of Carranglan, Nueva Ecija.

One of the identified development interventions for the area is to plant sampaguitaand/or ilang-ilang as cutflowers or sources of natural essential oil in commercial

quantities.

Being considered in the future as major source of income and employmentopportunities for the ALYANSA members and the whole of Carranglan, and the large

amount of investment needed to develop their area, there is a need to gather more

technical, economic and detailed market information to guide them on futuredevelopment action to take.

Hence, the conduct of this feasibility study on commercial production of ilang-ilangand sampaguita.

1.2 Objectives

The basic aim of the study is to rapidly assess and determine the feasibility of

commercial production of sampaguita and ilang-ilang flowers at Carranglan, Nueva

Ecija.

Specifically, the study aims to:

a) assess and document the current production systems of sampaguita and

ilang-ilang;

b) assess and document the current sampaguita and ilang-ilang flowersmarketing system;

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c) identify possible marketing areas and/or alternative markets;

d) identify feasible marketing options; and

e) determine the financial and economic feasibility of commercial production

of sampaguita and ilang-ilang production in the above-mentioned municipality.

2.0 METHODOLOGY

The feasibility study was conducted following the methodology as enumerated below:

2.1 Team Mobilization

To start the study right, the study team made a leveling off in terms of individualexpectations based on individual term of reference vis--vis the overall expected

output required by CASCADE. This was done to establish team work andinterdisciplinarity of the Study Team which was crucial in the successful delivery

of quality output.

2.2 Consultation Meeting With Officers and Members of the ALYANSA

The Study Team conducted a consultation meeting with the officers and members

of the Alyansa ng Mga Kooperatiba at Samahan sa Carranglan (ALYANSA). Thepurpose of which was for the Study Team to confirm from them the need to

conduct this proposed feasibility study. Furthermore, through this consultationmeeting, the Study Team was able explain to the ALYANSA members and officersthe various steps/strategies to be undertaken in the study.

To facilitate fast internalization of the said project and as a strategy for empowering

the ALYANSA on the conduct of a feasibility study, the Study Team shallrequested the participation of designated official(s) and/or member(s) in the field

visit to identified commercial producers and in potential markets of sampaguita and

ilang-ilang.

Also, the Study Teams agriculturist through the assistance of an officer or member

of the cooperative shall conduct bio-physical mapping and characterization of theproposed production site.

The Study Team took notes of the ALYANSAs status (registration, financial,current programs/ activities, duties/ responsibilities of officers/ members) current

organization structure, officers, and membership.

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2.3 Conduct of Technical Study

A literature survey was initially done to find out the State of Art on CommercialProduction of Sampaguita and Ilang-ilang Flowers. Commercial producers of

sampaguita and ilang-ilang flowers within the province or nearby provinces were

identified. A field visit to selected production site(s) was made to confirm and

validate the current state of the art of commercial production of sampaguita andilang-ilang flowers. This was done with participation of selected officers and

members of the ALYANSA.

2.4 Conduct of Marketing Study

A literature survey was conducted to find out the State of the Art in Sampaguita

and Ilang-ilang Flowers Marketing. The existing market(s) of the producers visitedwere considered in the identification of the markets of sampaguita and ilang-ilang

flowers. A field visit to selected market(s) of sampaguita and ilang-ilang was done.

2.5 Organization and Management Study

Based on the data taken during the consultation meeting with the cooperativemembers and officers, and the proposed production (options) and marketing

(options), an assessment of the present organizational structure was done

specifically to find out the appropriateness of the existing organizational structuregiven the addition of commercial sampaguita and ilang-ilang production in their

current activities. A recommendation as to a revision or a new structure was done.

2.6 Financial and Economic Analysis

Using the results of the technical study, marketing study, and the organization and

management study, financial and economic analysis was undertaken for the variousoptions proposed.

Financial analysis was undertaken specifically to determine the profitability of theproposed project to the host organization and its members who shall be undertaking

the commercial production of the said crops.

Economic analysis was made to determine the desirability or contribution of the

proposed project to the host community, the municipality of Carranglan and the

country as a whole.

2.7 Presentation of Preliminary Feasibility Study Report.

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Results of the feasibility study was presented initially to the officers and members

of ALYANSA, the client-organization to validate the basic assumptions used in thestudy as well as to present the feasibility study results. After incorporating the

suggestions and comments of the ALYANSA officers and members, a draft report

was presented to CASCADE for comments and suggestions.

Again, the results were presented in a forum attended by: (a) officials, local

technical assistants of CASCADE, (b) selected officers of ALYANSA, and (c)

local officials of LGU Carranglan.

2.8 Submission of Final Feasibility Study Report

After, incorporating all the suggestions, a final copy of the feasibility study reportwas submitted to CASCADE.

3.0 SUMMARY OF FINDINGS

Results showed that ilang-ilang has high potential as source of essential oil and as cut

flower used in garlands making in combination with sampaguita.

Sampaguita, although has very rare quality of essential oil, extraction of oil is still very

difficult and expensive. Hence, at present, sampaguita are basically for fresh flowers(garlands) only.

Technology for ilang-ilang essential oil extraction is available (from DOST) and notcomplicated. Machine for oil extraction is locally available.

Biophysical conditions (terrain, soil characteristics, etc) is fitted to both ilang-ilang and

sampaguita production.

Cut flowers (garlands) market is a large market considering the high population growth

in the country. Estimates show that only 1% of this market is satisfied. The entry ofALYANSA members in the garlands production and marketing does not pose any

threat to existing producers in the industry.

Essential oil from ilang-ilang has at present stiff competition from synthetic oils which

are cheap. However, with the increasing awareness of consumers on the advantages

offered by organic essential oil a steady supply of organic essential oil (e.g. ilang-ilang)will in the long-run increase its market share. Market for organic essential oil is at

present barely explored.

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The ALYANSA as an umbrella organization of cooperatives and association in

Carranglan was found to be a viable venue and actor in the implementation of theproposed project.

However, registered as a non-stock non-profit organization, it will have a potential

problem on profit distribution, if and when it already earns profit from the proposedproject. A new member cooperative or private business group can be formed for this

purpose.

Analysis showed that both ilang-ilang and sampaguita production offers high profit in

both the input providers (farmer-members) and the ALYANSA and primary

cooperative/association.

Sensitivity analysis showed that the proposed project can withstand the worst

conditions possible in the industry. Therefore the business venture proposed has lowrisk.

The proposed project is environment-friendly considering its positive contribution to

soil conservation, carbon sequestration, and air pollution reduction.

4.0 RECOMMENDED PROJECT IMPLEMENTATION STRATEGY

Given the above findings, the following are recommended:

4.1 Ilang-ilang

Establishment of ilang-ilang plantation among ALYANSA members

DENR will be of help in the identification of plantation sites and nursery

establishment and management in coordination with the LGU of Carranglan DAR through its Municipal Agrarian Reform Office will have a vital role in the

organization farmers that will engage in ilang-ilang fresh flowers production

and in the organization and registration of the proposed cooperative or groupthat will engage in the essential oil extraction.

A minimum of 6 hectares should be planted with ilang-ilang to assure a steady

source of ilang-ilang fresh flowers for a 100-kg capacity oil extractor An LGU-initiated planting of ilang-ilang along national, provincial or

municipal roads of Carranglan as additional source of fresh flowers

Farmer-members to be the input providers Reorganize ALYANSA into a cooperative or a new member cooperative/

business partner can be formed to operate the proposed business venture

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ALYANSA or its chosen member cooperative to operate the oil extraction plant

to be located very near the ALYANSA office

4.2 Sampaguita

Shall be implemented on small scale only (25 shrubs in a 30 m 2

area) The primary cooperative/association member of ALYANSA

shall be the collector/buyer of fresh flowers from the members and prepare

garlands for marketing to nearby markets

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