Chair: S/Usec. Thomas G. Aquino Department of Trade and Industry	U/Sec. Fortunato T. dela Peña Department of Science and Technology
U/Sec. Merly M. Cruz DTI-ROG	Asec. Salvador S.M. Salacup Department of Agriculture
Asec. Austere A. Panadero Department of Interior Local Government	Asec. Merly M. Cruz Cluster Coordinator
EDir. Ernesto A. Beltran TESDA	Dr. Ceferino L. Follosco NCMT Adviser
Mr. Raul C. Hernandez Vice President Philippine Chamber of Commerce and Industry	Ms. Leonor D. Abella Vice President Philippine Exporters Confederation, Inc.

Rizal Gearing for Salabat Industry Cluster The provincial government of Rizal is starting the infrastructure project to facilitate the growth and development of its identified product ”Instant Salabat”. Rizal will now be developed as a “growth center” for the “salabat” or ginger ale industry.

The growth centers will help the cluster improve their domestic and export growths by expanding their markets. Dr. Ceferino Follosco, the industry cluster expert leads a team to develop potential clusters into new model industry clusters by recommending interventions from government and private organizations to strengthen this value chain.

EDC Conducts Regional Advisory and Mentoring Sessions of the Five Model Industry Clusters The first leg of the Regional advisory and mentoring sessions was held in Dipolog City with the “ISDA” Cluster of Zamboanga del Norte last 29 February to 01 March 2008.

The said session was led by the Clustering Expert, Dr. Ceferino L. Follosco. The project aims to strengthen the 5 Model Industry Cluster awardees through interventions to existing gaps. A possible interventions is the establishment of a common blast freezer and cold storage facilities for the cluster through the Export Promotion Fund if needed. The team also identified processed mango as an emerging cluster in the province.

Regional Advisory and Mentoring Sessions will also be held in Cagayan de Oro, Butuan City, Cebu and Davao for their Normin Veggies, Create Processed Food, Furniture, Banana, Mango, Wood, Eco-tourism and ICT Clusters.

More Industry Clusters to be Strengthened In view of the success of industry clusters in improving competitiveness of products and services in the regions, more will be developed and those existing will be strengthened. The Partnership and Advocacy for Competitiveness and Trade, a joint project of the PHILEXPORT and Angelo King Institute with the USAID has recently approved the project: "Development and Strengthening of Model Industry Clusters".

This project aims to further strengthen the five (5) Model Industry Clusters awarded by President Arroyo last October 2007, to address the gaps identified in their respective value chains. Also, other clusters will be identified and assisted. These new or existing clusters will have the chance to be nominated in the next round of search for Model Industry Clusters.

The Export Development Council will lead the implementation of this project.

Clustering is the geographic concentrations of interconnected business entities and support institutions, and encompass an array of linked industries and other entities important to competition. These may include suppliers of inputs, support facilities and services providers, and providers of specialized infrastructures. Clustering is seen as an effective strategy in contributing to the attainment of regional goals such as poverty alleviation and enhancing economic productivity, within the context of the regional development strategies.

MODEL REGIONAL CLUSTER
High- value Vegetable Cluster of Northern Mindanao

Northern Mindanao is one of the priority areas and high growth regions of the country. It has available land suitable to commercial-scale vegetable production and the region has become an alternative source of vegetables to Benguet/Northern Luzon when Luzon’s prolonged wet season sets in.

Out of the fragmented, small holders’ farms an agro-based cluster called the Northern Mindanao Vegetables transformed one to two-hectare vegetable producers into market-focused, highly competitive farmers. NorminVeggies has become the model industry cluster in Mindanao, with support from the Department of trade and Industry (DTI), Department of Agriculture, Growth with Equity in Mindanao and the Department of Science and Technology. The association has facilitated the entry of semi-temperate vegetables into wet markets and institutional outlets in the Mindanao and the Visayas region; in the process, it has eliminated several layers of middlemen and traders in the value chain.

NorminVeggies achieved significant gains by adopting the cluster strategy of collaboration for marketing competitiveness. The introduction of improved farming technologies led to higher productivity and reduction of spoilage and deterioration of highly perishable commodities. By clustering, the association consolidated most of the activities covering the entire chain starting with vegetable production to shipping and distribution.

The association is currently focusing its efforts in the NorminVeggies Consolidation Center located in Agora Area in Cagayan de Oro where in May 2006, it established a conspicuous presence among 100 competing warehouse and trading posts in its main street. The decision to locate in the Agora has been prompted by the fact that it is the largest landing and consolidation point in the area, especially for vegetables. NorminVeggies now has the opportunity to provide better storage and marketing assistance services to smallholder member-farmers.

MODEL PROVINCIAL CLUSTER
Furniture Cluster of Cebu

As the furniture capital of the country, Cebu has earned global recognition for its excellent designs and superior craftsmanship. From a fledgling rattan pole supplier in the 70’s, the island’s furniture industry has built an impressive track record as a major export earner and net exporter. Its contributions to the local and national economy have catapulated the Cebu furniture industry among the top five export commodities from the Philippines.

The key players in the Cebu’s furniture cluster are the manufacturers, subcontractors and dealers, whether direct and indirect exporters, or a combination of these businesses. Support industries include the wood and lumber industry, hardware, and the metal sector.

There are about 162 furniture establi9shments in Cebu, 76% of which are members of the Cebu Furniture Industries Foundation Inc. (CFIF), the industry association. Based on the membership profile of the Foundation, Cebu’s furniture industry is composed of varying scales of manufacturers from micro-cottage to SMEs and large-scale enterprises. The scale of operations of the firms also varies from mass production facilities to design-driven producers.

Cebu’s home furniture industry was identified as a pilot cluster under the 1999-2004 Export Development Plan. Presently, the CFIF represents the interests of the private sector in Cebu’s industry clustering program.

MODEL PROVINCIAL CLUSTER
“ISDA” Cluster of Dipolog

“ISDA” came into being as a result of the fusion of two complementing forces- the private sector and government. The idea of clustering was introduced at the time when some sardines producers of Dipolog City, the bottled sardines capital of the country, the DTI- Zamboanga del Norte were searching for ways for the fledging industry to grow and expand into the export market.

In 2001, the DTI regional office calledthe sardines makers to a meeting to draw their attention to the new clustering program being promoted by the agency. At that time, the small-scale sardines makers were unable to purchase cooking oil-a basic raw material in production of Spanish Style sardines- at a competitive price offered to big volume buyers in the area. The Department of Trade and Industry provided help to be channeled through the sardines cluster.

Aside from DTI, ISDA has received and continues to receive assistance from the Department of Science and Technology (DOST), the Bureau of Fisheries and Aquatic Resources (BFAR), the Department of Labor and Employment (DOLE), the local government unit and the Office of the President which has provided funding support under the OTOP 1 Milyon, 1 Bayan, 1 Milyong Programa.

The concerted efforts have been credited for the strong performance of the bottled sardines industry over the past few years, From mere home-based units in the early 90’s, the manufacturers now produce an average annual volume of 70,000 boxes or 1,600,000 pieces of eighty-oz jars.

ISDA members are also seriously seeking HACCP certification, a rigorous preventive program against food hazards that will open the export market to their products.

EMERGING REGIONAL CLUSTER
Food processing Cluster of Caraga

The industry clustering concept was introduced to DTI-Caraga in 1999 during a workshop on value-chain analysis. Since then, industry clustering has become one of the major thrusts “to grow a vibrant small and medium enterprise sector capable of providing a solid production base for globally competitive export industries.”

With this institutional direction, DTI-Caraga packaged a proposal entitled “Development and Promotion of Caraga’s Prioirity Sectors Through Industry Clustering Approach”. The proposal was approved with funding from the Philippine-Australia Short-Term Training Facility and accommodated additional participants from other DTI offices in Mindanao. Six staff from DTI-Caraga where in Australia from September 6-25, 2003 to study the concept of industry clustering.

Planning meetings and benchmarking were undertaken to put in place government and private cooperation in an industry clustering initiative in Caraga. On May 15, 2005, food processors in the Region established CReATE otherwise known as the Caraga Regional Association of Traders and Entrepreneurs that has become the most forward-looking cluster in the region.

Since its inception, CReATE has linked up with Caraga High value Vegetable Cluster for the fruits and vegetables requirements of its member firms and with suppliers of bottles, cans, boxes, and plastic containers. The cluater association is working out a linkage with the seaweeds cluster for the supply of seaweed strips and jelly preparations.

Other achievements include its accreditation by Department of science and Technology (DOST) as fabricator of food processing equipment, continuing partnership with DTI in improving food processing SMEs in the region, and its inclusion to represent the food sector in the consultative bodies of Butuan City and Agusan del Sur. It has also acted as consolidator in showcasing Caraga food products in trade fairs.

EMERGING REGIONAL CLUSTER
Regional Clusters of Davao

The regional economy of Davao interwines various industries such that DTI-Region XI had to prioritize the industries to be clustered. Using comparative advantages, potential for growth, and the presence of active industry players as criteria, the short list of industries included banana, mango, coconut, wood, seaweed, mining, information communication technology (ICT) and eco-tourism.

Banana Industry
Davao’s banana industry has own tremendous growth over the last few years. Once a major exporter of plantation bananas, the industry is now gaining recognition in Japan, Korea, and China for its processed bananas in the form of export-grade chps. A major player like Sagrex International introduced new products last yaer: banana fries, an alternative to potato fries, and frozen bananas.

Mango
Growing and processing is a relatively new industry in the Region, but is fast growing industry characterized by the rapid expansion of mango farms. Climatic factors, particularly period for mango flowering, favor the industry.

The region aims to establish a strong presence in local and foreign markets for fresh as well as processed mango. In order to penetrate the export market, the industry neds to obtain a certification, something which mat not come by easily given the current state of the industry.

Coconut
The coconut industry is currently undergoing an economic rehabilitation of some sort due to its new food and non-food uses. From all indications, the coconut industry appears well clustered, with new products and processes, new markets and new linkages and supporting institutions.

Seaweed
The seaweed cluster of Davao derives its comparative advantage from the long coastline and relatively calm waters of the Davao Gulf. ( seaweeds thrive best where the waves are neither too strong nor too sluggish ). Seaweed growing and processing is a fast-growing export industry, pulled in large part by the growing demand in China the EU, and North America.

Wood Industry
The wood industry cluster involves the production and processing of wood as pallets, crates, construction materials, and other uses for the domestic as well as foreign market. There have been new cluster initiatives and institutions, like policy advocacies and centers of excellence in wood as well as fresh look at the industry.

Mining
Mining has been one of the regions major industries, with its large deposits of gold, silver, and copper. Mining has huge potentials for attracting substantial foreign and local investments and earning foreign exchange, not to mention generating local employment.

Eco-tourism
This cluster aims to capitalize on the regions many attractions, such as beautiful beaches, historical sites, falls and hot springs, and other natural as well as man-made resources. Also on the plus side, the ample amenities and relatively low costs of living and doing business in Davao provide another attraction for tourists and businessmen alike.

Shows the updates and accomplishments of the identified National Priority Clusters and their Sub-Clusters.

• Microelectronic [ PDF ]
• Motor Vehicle Parts and Compenents [ PDF ]
• Wearables[ PDF ]
• Coconut and coconut Products [ PDF ]
• Aquatic and Marine Products ( Tuna, Bangus, Tilapia, Seaweeds) [ PDF ]
• Food products (Fresh and processed fruits) [ PDF ]
• Home furnishings [ ]
• Holiday Décor and Giftwares [ ]
• Organic and Natural Products and ICT Enabled Services [ PDF ]
• Construction Materials and Services [ ]
• Biotechnology [ ]
• Machinery parts and Engineered Products [ ]

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