Zambo sardine canners piling up losses

ZAMBOANGA CITY -- The ongoing power supply problem in the country’s sardine capital continues to take its toll on the production of one of the staple food of every ordinary Filipino household.

Unscheduled brownouts running up to three hours each time has cut down production of sardines by as much as 30 percent, according to industry sources.

An owner of one of the biggest canning plants here said their group of companies are also running low on supply of tin cans as a result of the lingering power supply problem.

Electricity in this far end of the Zamboanga Peninsula has been erratic ever since Western Mindanao Power Corporation (WMPC) ceased supplying power to Zamboanga City Electric Cooperative (ZAMCELCO) on February 4 after the cooperative failed to pay its bill since October 2018.

According to WMPC, the electric cooperative has refused to pay its bill amounting to PHP467 million forcing it to shut down operations after Crown Desco took over the management of the cooperative.

While Crown Desco formally took over only in January this year, it has refused to honor overdue accounts of the cooperative despite repeated demands from WMPC.

In spite of the efforts exerted by local government officials to resolve the impasse, ZAMCELCO, with Crown Desco at the helm of management, has remained adamant in paying its obligation due to alleged overcharging by the WMPC.

Sardine canning plants, including tin can manufacturers and storage plants have been using backup generator sets to continue operating, according to an industry source who requested that his name be withheld.

He said this has resulted to an increase in their fuel consumption.

“We are incurring up to PHP4 million in fuel costs every month to run in full capacity,” the said source revealed.

The same source said that their group of companies, which includes one other canning plant and a storage facility, needs at least 4 megawatts of power supply.

“Without ample power supply, we will have to run our diesel generators which consume about 3,600 litters a day,” he explained.

The source added that their electricity bill runs up to PHP10 million a month even without the power supply problem.

He declined to quantify their losses as a result of the recurring power interruptions but said the problem has resulted into increase in the prices of sardines in the local market because to declining supply.

Zamboanga has 11 sardine canning plants making it the country’s sardine capital.

According to industry sources, the combined capacities of these canning plants could reach 1.5 million boxes a month.

“That is equivalent to 150 million cans of sardines a month,” the source said adding that the canning industry is worth more than PHP1.5 billion a year.

That excludes ancillary products and businesses.

He said they are torn between slowing down production, which means drop in productivity, and absorbing more costs due to higher fuel consumption.

The sardine canning plants and other industrial companies along the coastal village of Talisayan alone needs at least 50 megawatts combined.

The franchise area of ZAMCELCO has a peak demand of 120 megawatts but is only getting a peak supply of 80 to 90 megawatts resulting into power interruptions since WMPC shut down its 105-MW bunker fuel-fired plant due to inadequate supply of bunker fuel.

WMPC has an existing and live contract with ZAMCELCO for 50-megawatt power supply. (PNA)

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