DAVAO CITY – Mindanao’s rubber industry is among agriculture’s sectors deeply affected by the worsening power woes, a businessman told reporters here during the regular Kapihan sa SM Monday.
Bonifacio Tan, past president of the Davao City Chamber of Commerce and Industry, Incorporated (DCCCII), who is also into processing and export of rubber, said brownouts affect the big and small businesses in Mindanao, including the export of rubber.
Tan runs a rubber processing plant in Makilala town in North Cotabato province.
“For us who are engaged in exporting rubber, we normally have a one year contract with our buyer (and) we have to deliver a certain volume every month,” Tan said.
Tan pointed out that they cannot use power failure as a reason for not delivering their products on time.
“It’s not acceptable because our competitors from other ASEAN countries who are also producing rubber can deliver on time,” Tan stressed.
He said that brownouts made big industries such as the rubber suffer shorter working hours but pay their workers complete in eight hours.
“Power outages will also increase your labor cost. If you hire your men for eight hours and there is one hour stoppage of work due to brownout you still must pay them for eight hours. You must pay them on that one hour of work stoppage due to power failure, but there is no production. This will also increase your cost of production,” Tan explained.
Labor cost would stretch if brownouts would run from two to three hours, he added.
Tan said rubber processing plants will need to extend production hours and pay their workers higher to meet the desired volume of product needed by their buyers.
“If you cannot deliver on time based on contract, you will be on default and they will no longer buy from you on a yearly basis. You will eventually lose in the business,” Tan said.
The brownouts started to affect rubber processing in North Cotabato since February this year.
“We have our generators running. This will sustain our business operations but it will cut down our profitability,” he said.
Tan also sees a worsening scenario of the power situation in Mindanao in coming days with the threat of the El Niño phenomenon. (Alexander Lopez)
– mb.com.ph
