San Miguel Foods, Inc. has signed an agreement with a company based here to put up a 120-million-peso (PHP) poultry processing facility in northern Mindanao, reports Business World.

Ericson M. Irlandez, San Miguel Foods South Mindanao area operations manager, said the deal with North Star Asia Holdings Corp would build a plant that could process 30,000 chickens daily.

Under the agreement, North Star Asia will set up the plant, while San Miguel will pay for the processing of chicken.

"The plant will have to follow certain protocols," Mr Irlandez said, including compliance with requirements under the Hazard Analysis and Critical Control Points and International Organization for Standardization. The processing plant will also be halal-certified, he added.

The plant, which will be in El Salvador, Misamis Oriental, will be the second export-oriented processing facility for North Star, next to the company's existing plant in Sirawan district in this city.

Vicente T. Lao, North Star chief executive officer, said the company has obtained a 3.7-hectare area in El Salvador and is ready to develop the new site. "Unless we get into some hitches in the application then we will [start site development]," he said. Mr Lao, also chairman of the Mindanao Business Council.

Victorio A. Antonio, San Miguel Foods head of national processing operations for poultry and meat, said 60 per cent of the plant's output will be for export, while the remainder will be for the local market.

To be shipped out are skewered poultry, explained Dr Leo A. Obear, general manager for the poultry and meats business of the San Miguel subsidiary.

He said: "Our main products would be 'yakitori', or Japanese chicken barbecue." Because the processing is labour-intensive, the plant is expected to open employment opportunities in the host town. This will also result in poultry grower contracts in areas around El Salvador, which is adjacent to Cagayan de Oro City.

According to Businesss World, San Miguel Foods will export the plant's output to Japan to augment the volume shipped to that country from processing plants in Luzon, said Mr Antonio.

Japan prefers Philippine-processed poultry because the country has not been affected by the dreaded bird flu, said Mr Irlandez.

San Miguel Foods is exporting 400 to 600 metric tons of processed chicken to Japan – not even five per cent of demand – he said, pointing out that the new processing plant could mean a bigger share of Japanese processed poultry imports in the future.

"Our Japanese buyers are waiting [for the new plant to operate]," Mr Irlandez added.