When the Bohol Processed Foods Business Association (Profoods) recently inked a loan agreement with Holland-based Oiko Credit Corp., it meant the upgrading of facilities has become within reach of some group members.
Indeed, the P8-million loan would be big enough for Profoods-Bohol, composed of small and medium sized food processors and manufacturers.
The loan would help provide the much-needed financing to some members so they could expand production facilities in line with good manufacturing practices requirements.
Working capital
The loan proceeds would also be used to acquire additional baking equipment and provide working capital, said Ceso-BAP country manager Tim Moiket.
The group caught the attention of Oiko Credit when the Canadian Executives Services Organization Business Advisory Program (Ceso-Bap) invited the financial institution to participate in a recently held strategic planning session.
Competitive
It was during the planning session that the cluster loan application was conceptualized.
The Ceso-BAP, which is funded by the Canadian government, extends expert assistance to the SMEs to enable them to acquire the know-how to become competitive in the global market.
Before the Profoods-Bohol joined the program, the bakery sector in Bohol faced declining sales due to the increasing number of small bakeries.
Moiket recalled that there was cutthroat competition among the Bohol bakery firms.
But Boy Pernia, who saw the potential of a plan prepared by Ceso-BAP for the Bohol Small and Medium Enterprise Council, worked for the creation of Profoods-Bohol through the Department of Trade and Industry provincial office, Moiket said.
Ceso-BAP assistance enabled the Profoods members to increase its production output and improve the product consistency and quality.
The companies also learned effective financial management system, retail merchandising techniques, packaging techniques and good manufacturing practices.
Increased sales
Since then, the program has helped Profoods-Bohol members to increase sales of up to 40 percent, Moiket said.
Profoods first learned about the program in September 2002 when BAP conducted a strategic planning workshop in Tagbilaran City to develop a program to help the small and medium food manufacturers there improve operations and offer quality products in the global market.
Realizing the need for them to form a group, several SMEs in Bohol established the Profoods, with the help of the Department of Trade and Industry.
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