Cocochem, once Southeast Asia’s largest coconut chemicals and oleo fats producer, is currently up for sale through Land Bank of the Philippines, which is offering around 682 million common shares to raise at least P2.82 billion.
Proceeds were earmarked to support coconut farmers, while private investors were expected to rehabilitate or repurpose the facility. However, renewed interest in coconut derivatives—particularly in Europe—has prompted a fresh policy review.
Privatization under review
Agriculture Secretary Francisco P. Tiu Laurel Jr. on Dec. 22, 2025 led an ocular inspection of Cocochem’s facilities, describing the visit as a fact-finding exercise as the government weighs its options.
“We want to see for ourselves whether it still makes sense for the government to continue operating this chemicals and oleo fats factory given the rising demand for coconut products, particularly in Europe,” Tiu Laurel said in a press statement.
Established in 1981 by then President Ferdinand E. Marcos Sr. and Ambassador Eduardo M. Cojuangco Jr., Cocochem was once a flagship of the country’s coconut industry. It was the first in Southeast Asia to produce fatty alcohols using the fatty acid route, employing German-engineered Lurgi technology.
The complex also boasts a private jetty capable of handling vessels of up to 35,000 deadweight tons, giving it a logistical edge in export markets.
Competitive position eroded
By 1986, Cocochem was exporting to the United States, Europe, Japan, Korea, China, ASEAN countries, India, Australia, New Zealand, South Africa, and the Middle East.
However, its fortunes declined after the non-implementation of Executive Order 259 in 2001, which would have mandated the use of fatty alcohols in local detergent products, sharply reducing domestic demand.
The situation worsened in the following decade as coconut oil prices surged, trading at a premium over palm kernel oil and eroding Cocochem’s competitiveness against ASEAN rivals. Plant operations were eventually shut down in 2012.
Asset utilization strategy
In 2014, the company pivoted from manufacturing to a facilities-based enterprise. Today, Cocochem earns income largely from land leases, storage tanks and warehouse rentals, power distribution, wastewater treatment, pier and dockage fees, water supply, and housing rentals.
Operating across 39 hectares, Cocochem’s income is now led by Cocochem Agro-Industrial Park Inc., which accounts for 53 percent of annual revenue, followed by Cocochem at 44 percent, and residential operations at 3 percent.
With demand for coconut derivatives gaining traction again, the government’s review raises a central question: whether coconut farmers’ long-term interests are better served by an outright sale—or by retaining a strategic asset aligned with global market trends. —Ed: Corrie S. Narisma
