The government is now considering whether to proceed with the long-planned sale of United Coconut Chemicals Inc. (Cocochem), valued at around ₱2.82 billion, amid rising demand for coconut products.

In a statement, Agriculture Secretary Francisco Tiu Laurel indicated that the government may hold on to the asset due to increased coconut demand in Europe.

“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.

“[The demand] raises the question of whether coconut farmers’ interests would be better served if the state holds on to a strategically located asset,” he added.

This came after he conducted an ocular inspection of the company’s facilities in San Pascual town, Batangas province, on Monday, Dec. 22, as part of the government’s “fact-finding exercise.”

The government, through state-run Land Bank of the Philippines (Landbank), is offering 682 million common shares of Cocochem to raise at least ₱2.82 billion.

Based on Landbank’s invitation to bid posted in February, the minimum bid price is ₱4.13 per common share.

The government owns a controlling 92.85-percent stake in the company, while 7.15 percent is owned by Germany-based Philholding SA.

Included in the sale are Cocochem’s subsidiaries, United San Pascual Properties Inc. (USPPI) and Cocochem Agro-Industrial Park Inc. (CAIP).

Based on the bid notice, proceeds from the sale are intended to support the coconut industry and help fund essential programs aimed at boosting productivity and incomes for coconut farmers.

The sale also paves the way for private investors to revive or repurpose the asset in line with shifting market conditions.

Established in 1981, Cocochem was once the largest coconut chemicals and oleo fats factory in Southeast Asia.

Cocochem shipped coconut-based products to the United States (US), Europe, Japan, Korea, China, India, Australia, New Zealand, South Africa, and the Middle East, among others.

The company, however, began facing setbacks at the turn of the millennium that curtailed both local and foreign demand.

In 2001, the non-implementation of a government policy that would have mandated the use of fatty alcohol in local detergent products weakened domestic demand for its products.

A decade later, the surge in coconut oil prices, which were trading at a significant premium over palm kernel oil, undermined its competitiveness against exporters from neighboring countries.

Cocochem shut down its plant operations in 2012 and later transitioned from manufacturing to a facilities-based enterprise.

The company currently generates income primarily from land leases, storage tank and warehouse rentals, power distribution, wastewater treatment, pier and weighbridge operations, dockage fees, water supply, and housing rentals.

The country’s coconut exports are expected to increase next year on the back of the recently implemented exemption from the reciprocal tariffs imposed by the US.

Earlier, the United Coconut Association of the Philippines (UCAP) estimated that export revenues would hike by 15 percent to $3 billion from this year’s estimate of around $2.6 billion.