Bukidnon Giant Bamboo Resources Corporation: A Blooming Business

The bamboo industry highlights the power of investing in nature-based solutions. The strategies include rewarding investment drivers, standardizing bamboo agroforestry, and preparing for natural resource value chain governance. While the local bamboo industry achieved significant development in recent years, more investments, regulations, and regulatory government backing are required to fulfill its full potential. It is only one of many business opportunities that must be scaled up to meet the increasing global demand.

With this scenario, the Development Bank of the Philippines (DBP) provides financing options for the local bamboo industry that farmers and manufacturers can use. It has pledged Php 1.2B to assist in helping to fund the Mindanao bamboo industry development program. This program is designed to protect watersheds and provide a means of subsistence for farmers and communities located in remote areas. One of the Mindanao-based companies that has taken advantage of this financial support is the Bukidnon Giant Bamboo Resources Corporation (BGB).

The company's primary focus is on the acquisition of bamboo poles from local farmers and the subsequent transformation of those poles into slats of varying widths and thicknesses in line with the purchase orders placed by the company's customers, both local and foreign ones. As a byproduct of the process, BGB's facility can also produce charcoal, which would increase the amount of money brought in by the project.

BGB chose to establish a core business of bamboo stations, which they presented to DBP and was granted a loan. These stations would be used to expand bamboo plantations to rehabilitate watershed regions to create a sustainable environment and resilient populations. The company has three projects involving 1,600 hectares of giant bamboo in the indigenous people areas in Bukidnon, who are also the target beneficiaries of these projects. BGB believes sustainability is understanding how to manage the risks and opportunities related to environmental, social, and governance issues. Thus, as a company, it focuses on ESG values when accomplishing its projects.

The partnership between DBP and BGB began in 2015 when the company received a loan of Php 500,000 from the Bank to fund its research and development phase. In the subsequent years, the company presented ideas for expansion and development to DBP, which the Bank adopted and granted a Php 2M loan for acquiring and supplying BGB's facilities. In February 2022, DBP granted the company another loan amounting to Php 50M for facility expansion. Using a portion of the funds, BGB put a deposit on new equipment. It also plans to plant 30,000 acres and construct ten facilities in the succeeding years.

Our goal is to expand with our partner communities to plant 30,000 hectares (not acres).
The potential sequestration of the 30,000ha bamboo expansion is around 30 million MT of CO2 equivalent (a hectare of bamboo can capture more than 1,000MT of CO2e) and eligible to register 15 million mt of carbon credits worth more than $150M as demand from various Net Zero Initiatives is increasing. The potential to create value from the sale of carbon credits is a mechanism to enable investment in green initiatives to mitigate the effects of Climate Change as well as create prosperity among the stakeholders especially our rural and disadvantaged communities.
The partnership with DBP started in 2018 with technical assistance to prepare a solid business case to scale up the industrialization of the bamboo value chain and meet the financial criteria of the bank. BGB got initial funding of Php3M in 2019 to support its experimental bamboo post-harvest treatment and processing facility to produce and market pressure-treated, kiln dried, planed smooth 4 sides bamboo slats as semi-processed raw materials for laminated products. BGB got additional credit facility to develop more products and open new markets as critical steps towards the upgrading of its proof-of-concept facility into a Php50M industrial scale demonstration facility testing more value-added processes and validating minimum economic viability. Long-term funding for the demonstration facility has been approved and BGB is already in the process of acquiring the additional equipment. This new facility will become the development framework to build full-scale commercial facility with mass production capacity to produce bamboo finished products, and replicate in multiple locations throughout Mindanao and the rest of the country where bamboo has potential to expand.

The company estimates this project will generate $1 billion in revenue, produce 30 million poles per year for Php 9B, and laminated products for close to Php 41B. This will result in the production of 150,000 metric tons of charcoal worth Php 3 billion, which will be used to replace the coal requirements of the coal power plants. It anticipates producing 10 million metric tons of Co2 carbon credits with a minimum goal value of $10 per metric ton, or $100 million worth of corporate carbon capture. Additionally, this project will produce 200,000 employments for women. The impact of these initiatives has started, but the road map to success will take a decade of careful planning and hard work.

BGB Media Team 26 September, 2022
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