Still on the long and winding road

A LOT of media and public discussions over the weekend were centered on politics, corruption, natural calamities and yes brown-outs. This are the signs of our times unfolding in our eyes that makes us ponder whether the biblical last judgment is near? The world is not about to end but it’s the sustainable resources that man failed to manage and return back to nature  after its fruits were harvested and profits were made.

A classic example with the right mix of corruption and exploitation of our natural resources is the story of the Paper Industries Corporation of the Philippines (PICOP)which was incorporated in 1963 after a spin off from the timber concession of the Bislig Bay Lumber Company which uses to be the biggest Lumber and Plywood manufacturing in Asia. It was granted by the Government in April 1, 1952, the license for several forest extraction covering 200,000 hectares of virgin forest in Surigao del Sur, Agusan del Sur, Davao Oriental up to Compostela Valley.

PICOP was a landmark investment in the Philippines during the Marcos Era. It was home to more than 30,000 workers that runs the Mills, the Forest Nursery and the Manufacturing operation. It made Mangagoy in Bislig, Surigao del Sur, a Barangay that never sleeps. Three shifts of manufacturing operation keep the economic activity vibrant with a vision of self sufficiency in newsprint paper and corrugated cardboard products needed by the newspaper industry and the packaging in the manufacturing business sold in the domestic and export market.

While newspaper business did not grow significantly during Marcos time, remember he declared Martial Law and curtailed Press Freedom, newsprint product went into the printing of textbooks, schools and office writing pads and to the propaganda machineries of the Government.

The calvary of PICOP that leads to its closure started when maturing loans used to build the plant and which was guaranteed by the Philippine Government from the worlds leading financial institutions could no longer be serviced. It incurred Php202 Million Net Loss in 2008 with only Php144 Million Revenue. As guarantor, the Government was forced to take 183.1 Million Shares at the par value of Php 3.20 per share when it was still actively traded at the Philippine Stock Exchange the money courtesy from the Land Bank of the Philippines. 

When a Government Bank comes into the picture, the Board of Directors change and a new policy direction took a twist. Investments in the long and winding road of paper manufacturing involves taking care of nature. Man has to reforest where he cut the tree used as raw materials. Did the Bankers plant trees or they sold to the illegal loggers who roamed the concessions arm to the teeth?

Control of the Company changed hands until it was absorbed by a subsidiary called New Paper Industries Corporation (NPIC) with Prospero Pichay as Chairman. A Government nominee from the highest power of dispensation.

Government Economist advanced some theories why PICOP lost money. Among the arguments were, spiraling fuel prices worldwide that disrupted the economic environment. The cost of bringing  trees and scarcity of materials to the mill site became expensive and the labor problems that disrupted operation cut down production.

They failed to mention that there was  dumping of paper and newsprint product from China to the Philippines that if not for the cooperative people at the Bureau of Customs, it could not have been possible to move thousand of tonnages of paper product to the Philippines. Did the Government and the Smugglers conspire? Of course one is innocent until proven guilty.