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Small and Medium Scale Manufacturing

invest-guide-small-and-medium-scale-manufacturingThe large number of small and medium enterprises (SMEs) greatly contributes to the economic growth and industrial progress of developing countries. They are valuable to the manufacturing industry of the Philippines. Global expansion and growing economic integration allows SMEs to be potential product exporters. Through using locally available materials, SMEs have the opportunity to manufacture food and non-food products in small and medium scale.

(Sources: Philippine Institute for Development Studies, Department of Trade and Industry, Philippine Statistics Authority, Online Developing Country Sourcing, and related websites)

FOOD AND BEVERAGE PROCESSING

invest-guide-small-and-medium-scale-manufacturing-1Food and beverage are constantly being purchased and consumed because it is one of the most essential needs of humans. In addition, Filipinos have a taste for delicious and healthy food and beverage products.

Manufacture of food and beverages are two of the Philippines' major industries. From 2010-2013, food and beverage manufacturing had 5% and 6% growths, respectively. To ensure the development of the industry and to encourage potential investors, the Philippine government considers it a priority sector.

 

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Advantages 

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Popularity –  Native delicacies are popular among Filipinos. 

High Necessity – There is a constant need for food and beverages because they are some of the most important necessities of man

Availability of materials – Raw materials and ingredients are easily available.

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 High Competition –  The competitition in the market is stringent given the expansive market share of large scale manufacturers.

 

 

 

How to register a food and beverage processing business?

1. Register the Business Name at the Department of Trade and Industry (for Single Proprietorships) or the Securities and Exchange Commission (for Partnerships and Corporations).

The law governing the registration of business name is Act No. 3883, as amended by Act No. 41476 and R.A. No. 863, otherwise known as the Business Name Law. The business name is valid for five years

2. Get a Mayor's permit from the municipality or city where the business is located. The permit is valid for a year.

3. Apply for an Employer's Tax Identification Number (TIN) at the Bureau of Internal Revenue (BIR).

4. Apply for Authority to Print Receipts and Invoices at the BIR.

5. Investors should register for a Social Security System (SSS) Certificate.

6. Register for a License to Operate at the Food and Drug Administration (FDA).

7. For businesses with five or more employees, owners must register with the Department of Labor and Employment (DOLE).


What are the opportunities in the food and processing sector?

1. Balut making

2. Banana chips

3. Burger 

4. Corned beef

5. Daing 

6. Fruit shake

7. Honey bee and honey production 

8. Jackfruit products

9. Kaong preserves

10. Lambanog    

11. Longganisa 

12. Mango Chutney

13. Nata de coco

14. Pandesal

15. Siomai 

16. Smoked boneless bangus 

17. Smoked sausage 

18. Tinapa 

19. Tocino 

20. Tomato Catsup

21. Tuyo 

22. Vinegar from banana peeling 


NON-FOOD MANUFACTURING

Products that are not fit for human consumption are called non-food products. They are produced for their respective purposes such as decorating and cleaning.

HOME STYLE MANUFACTURING

invest-guide-small-and-medium-scale-manufacturing-2Home style products are always marketable because of the need to decorate homes. The Philippines is considered as the top manufacturer of home style products in terms of craftsmanship and design. Because of this, the potential for exportation of home style products is very viable.

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Advantages 

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Access to the world market –  There is an opportunity for makers to showcase their products because of the Philippine International Furniture Show.

Internal support – The implementation of 5S (headed by the DTI 5S Team) regulates furniture production cost.

Native raw materials – Materials such as rattan and bamboo are locally available.

High selling price – Compared to furniture from other Asian countries, Philippine furniture are sold at higher prices because of product innovation and strength of the design, materials, and aesthetics.

Technology – Ease of production is attainable through the aid of technology.

High demand – New trends in interior design emerge, thus, there is a need for new homestyle products.

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Unavailability of some raw materials –  Some wood species need to be imported from other countries.

Quality control –  Contractors' strict material and workmanship specifications hinder liberty in production.

 

Some home style products are décor and furniture.

1. Home Décor

Philippine-made home décor products are often crafted from eco-friendly materials. In the advent of the call for protection of the environment, buyers are becoming environment-conscious. Thus, the marketability of Philippine-made home décor products increases.

a. Dipped and molded candles 

b. Candle holder centerpiece

2. Furniture

The furniture industry largely contributes to the Philippine economy. It had a growth of 57% from 2010-2013. In line with this, the Philippine Statistics Authority considers furniture as one of the top ten exports of the country as of April 2014. Products are sold to local buyers, distributor-wholesalers, and retailers.
Some furniture pieces are sofas, benches, beds, cabinets, tables, and chairs.

Philippine furniture is noted as well-crafted, skillfully designed, and made from durable materials. Furniture can be made from different materials such as wood, buri, metal, stone, rattan, and bamboo.

Click here to know more about the furniture industry. 

How to register a home style business?

1. Register the Business Name at the Department of Trade and Industry (for Single Proprietorships) or the Securities and Exchange Commission (for Partnerships and Corporations).

The law governing the registration of business name is Act No. 3883, as amended by Act No. 41476 and R.A. No. 863, otherwise known as the Business Name Law. The business name is valid for five years.

2. Get a Mayor's permit from the municipality or city where the business is located. The permit is valid for one year.

3. Apply for an Employer's Tax Identification Number (TIN) at the Bureau of Internal Revenue (BIR).

4. Apply for Authority to Print Receipts and Invoices at the BIR.

5. Investors should register for a Social Security System (SSS) Certificate.

6. For businesses with five or more employees, owners must register with the Department of Labor and Employment (DOLE).

SOAP MANUFACTURING

invest-guide-small-and-medium-scale-manufacturing-3Soap is one of the most essential products when it comes to body hygiene. Many Filipinos look for effective, yet affordable soap products that suit their needs. Because of this, many soap making businesses emerge in the Philippines.

 

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Advantages 

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Saleable –  Soap is being used in all parts of the Philippines because it is one of the most important products for hygiene. 

Variety– Many natural products can be used to produce various kinds of soaps.

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High Competition –  The popularity of soap products causes similar businesses to emerge.

Manufacturers can make bath soaps, whitening soaps, detergent soaps, and dishwashing soaps.

1. Herbal bath soap

    • Akapulko and guava 

    • Papaya, radish, calamansi, cucumber, and kamias 

    • Aloe vera, patchouli, citronella, rose, and sampaguita 

2. Powdered detergent

3. Fabric softener

4. Dishwashing liquid 

5. Biodegradable detergent soap 

6. Coffee-scented soap 

7. Cornmeal soap

How to register a soap manufacturing business?

1. Register the Business Name at the Department of Trade and Industry (for Single Proprietorships) or the Securities and Exchange Commission (for Partnerships and Corporations).

The law governing the registration of business name is Act No. 3883, as amended by Act No. 41476 and R.A. No. 863, otherwise known as the Business Name Law. The business name is valid for five years.

2. Get a Mayor's permit from the municipality or city where the business is located. The permit is valid for one year.

3. Apply for an Employer's Tax Identification Number (TIN) at the Bureau of Internal Revenue (BIR).

4. Apply for Authority to Print Receipts and Invoices at the BIR.

5. Register for a License to Operate at the Food and Drug Administration (FDA).

6. Investors should register for a Social Security System (SSS) Certificate.

7. For businesses with five or more employees, owners must register with the Department of Labor and Employment (DOLE).