Copra Trading in Davao

Copra Trading in Davao

Davao, PhilippinesSingapore
Organization type: 
for profit
Project Stage:
Start-Up
Budget: 
$100,000 - $250,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Oceanic Gold is an impact investment firm that encourages and develops scalable SMEs in rural communities within the ASEAN region. We set up rural development projects in countries like Indonesia and the Philippines with a focus on poverty alleviation. Our projects comprise of scalable agricultural-based enterprises that will help rural entrepreneurs create jobs in their communities.

About Project

Problem: What problem is this project trying to address?

The biggest problem in the rural communities in the Philippines is the outflow of young people and educated people to the cities and to foreign countries. Philippines' biggest export is human labor primarily because of the lack of a reliable long-term supply of jobs in the rural areas. Most of the people in rural communities are small-time farmers with little income. As a result of the outflow of people, families break up and creates much social imbalance.

Solution: What is the proposed solution? Please be specific!

Since November 2011, we have created a program that allows small time farmers to move up the supply and value chain in their rural coconut-farming industries. We piloted with 4 managers across the state of Davao on the island of Mindanao to implement our program. As the coconut commodity prices are always fluctuating, we have equipped these farmers with the trading skills, business tools and trading capital to trade these coconut commodities. For example, a small farmer might be able to sell his own harvest for a monthly income of P3,000 on a good harvest month. However, with the capital and tools we have supplied him, he can collectively buy from his own community of 60-100 small farmers and then sell wholesale to the factories. Such community based group sourcing and buying activity can uplift a whole community by providing fair market rates for the farmers produce and create jobs in the newly created trading business.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

The manager who we have decided to support will canvass for farmers in his community willing to sell their produce to him. He will then extend a interest-free cash advance to them in exchange for a contract to purchase their entire harvest in the next cycle. These farmers used to loan from micro-lenders to pay for their daily living expenses at an interest rate of 10-20% per month. We have radically changed that model by using the farmers' harvest as collateral for the cash advance. Upon harvest, our manager will pay the farmers the balance of what is owed for the harvest and store the coconut stock in our warehouses. Once critical mass is collected, our manager will hire a truck to transport the shipment to the factories in the cities. We have developed a business system for the managers such that they will be constantly aware of the change in fluctuating commodity prices and will not be negatively impacted by it.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Currently, there are no social impact investment firms like ours doing anything like this in Davao or in the Philippines for that matter. The traditional business in these areas are micro-credit or micro-loan firms which charge high interest rates of 10-20% per month, resulting in a viscious cycle of debt for the farmer. We have introduced an innovative sustainability model which can help uplift and empower the rural communities. The barrier of entry is extremely high in these areas as someone else will need to find trusted local partners who are willing to believe in the vision and help implement the program. Integrity is always a major issue working in poor rural communities like Davao and what we have is a strong team behind us.
Team

Founding Story

My founder and I have been volunteering at a non profit microfinancing organization and have learnt about different social enterprise models and decided to develop an impact investment enterprise not based on interest or loans, but on empowering rural enterprises by develop a growth path for them. My firm, Oceanic Gold, was developed after much study and experimentation and is the fruit of much lesson learnt by ourselves and our peers.
About You
Organization:
Oceanic Gold Pte Ltd
About You
First Name

Yao

Last Name

Lee

About Your Organization
Organization Name

Oceanic Gold Pte Ltd

Organization Country
Country where this project is creating social impact

, DOR, Davao

Age of Innovator

18-34

Gender of Innovator

Male

How long has your organization been operating?

Less than a year

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Innovation
How long have you been in operation?

Operating for less than a year

Social Impact
What solution(s) does your initiative address to help emerging entrepreneurs and small businesses grow and thrive in underserved communities? (select all applicable)

Access to financing, Access to supply chains, Access to technology, Access to economic opportunity.

What has been the impact of your solution to date?

Our managers who were previously jobless are now running profitable small trading enterprises earning between P8,000 to P13,000 per month. They will be growing and expanding business operations over time. However, the real social impact comes in the number of farmers that are under their network. They each support between 60-100 farmers each and issue about P600-700,000 of cash advances each month to these farmers.

What is your projected impact over the next 1-3 years?

We plan to replicate this successful pilot model all across Mindanao which is one of the poorest farming regions in the Philippines. We currently support a network of about We plan to hire 10 more managers over the next year each supporting between 60-100 small farmers. Our total outreach and impact is targeted to increase from 240 farmers to about 1000 farmers in 1 year. Our model makes our business extremely scalable as each manager is in charge of his own region which can support a few hundred farmers.

What barriers might hinder the success of your project? How do you plan to overcome them?

Evaluating the integrity and business acumen of new managers is a long process of interviewing, training, apprenticeship and seed funding. The whole process takes about 4-6 months before the manager can truly make a big economic impact in his own community. My firm, Oceanic Gold, is improving its evaluation process so the turnaround time will be reduced especially when we build a more standard process for the training of new managers. We are compiling a set of best practices and lessons learnt so that new managers can get up to speed.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Scale up our operations

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Fund raising of S$200,000 to fund 5 more new managers

Task 2

Development of a training and best practice package

Task 3

Conduct internal impact assessment of our social enterprise

Now think bigger! Identify your 12-month impact milestone

Move up the supply chain again!

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Fund raising of S$200,000 to fund 5 more new managers

Task 2

Develop a plan for a rural coconut oil mill so that farmers can supply us directly

Task 3

Get impact rated by a reliable and respected independent social impact assessment board

Sustainability
Tell us about your partnerships

Our partnerships are mainly with the managers who are free to run their own businesses within a certain set of guidelines. They use their community networks to help Oceanic Gold source for coconut suppliers. Oceanic Gold signs legal profit sharing agreements with these managers and dividends are issued to Oceanic Gold every month.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

We need more financial investment to expand on our current operations. We are continually finding new media channels to spread our message which is poverty alleviation in rural communities. Market research will help greatly in giving our partners and managers ideas on how to collaborate better in the field and providing each other with real time market information.