THE residential market may experience a slowdown if the government’s tax reform plan, which removes tax exemptions on sale of low-cost housing, is approved, according to property consultancy Colliers International.
In a statement issued on Wednesday, Colliers International said House Bill 5636 or the “Tax Reform for Acceleration and Inclusion,” once passed into law, could add as much as P384,000 to the prices of low-cost housing due to the removal of value-added tax (VAT) exemptions.
Citing the approved bill, the property consultancy noted that VAT exemptions will be removed for the sale of residential lots valued at P1.92 million and residential houses valued at P3.2 million. Sale of socialized housing will also no longer be exempted from VAT once a housing voucher system is established.
While HB 5636 would increase government revenue collection by limiting VAT exemptions, Colliers said the removal of tax exemptions on low-cost housing would crimp the take-up rate of low-cost housing units, as well as make it harder for lower income families to own house and lots.
“Colliers believes that the increase is quite significant especially for starting families or new professionals,” Colliers’ Senior Manager for Research Randwil Dinbo U. Macaranas was quoted as saying in a statement.
Colliers noted 40% of the take-up rate of over 10,700 condominium units during the first quarter of 2017 came from the low-cost and socialized housing sectors.
At the current pace, pre-selling of residential lots in Metro Manila has increased by 5% annually in the last three years, with lots in neighboring provinces showing a slower growth at 1%.
RENTAL RATES TO RISE
At the same time, Colliers noted rental rates are likely to rise, as HB 5636 also removes the tax exemption for housing units leased out for less than P12,800 a month.
The property consultancy said vacancies in Metro Manila’s condominium market have already gone up at around 1% every quarter since the start of 2016. This is expected to rise as 49,000 condominium units are targeted to come online between 2017 and 2020.
“The planned imposition of additional taxes on residential leases will accelerate the on-going trend in the condominium market of rising vacancies and reducing rents,” Colliers said.
With the tax reform plan, Colliers said developers will have to craft more creative strategies on how to pre-sell their project and lease out ready-for-occupancy units. The trend of longer-term payments for sales and shorter-term leases will also continue in the residential market, the firm said.
“We see developers stretching the payment terms to a few more months to ease the burden of condominium buyers. Furthermore, many will be strengthening residential leasing teams to help keep them competitive in the rental market,” Mr. Macaranas said. — Arra B. Francia
COCONUT OIL (CNO) exports in the first five months of the year rose over 70% year-on-year as production of copra, the raw material from which it is derived, recovered from the prolonged El Niño-induced dry spell last year, an industry association said.
A farmer preparing coconuts to be made into copra in Hernani, Eastern Samar — AFP
Citing preliminary data, United Coconut Associations of the Philippines, Inc. (UCAP) Executive Director Yvonne T. Agustin said shipments in the January to May period hit 378,850 tons, up 70.20% from the same period in 2016.
Also, prices improved, averaging $1,544 per ton for the period, compared with $1,230 a year earlier.
“We are coming off a low base. So this year, the recovery is pronounced,” Ms. Agustin said in a phone interview on Wednesday.
The CNO subsector encountered difficulties sourcing copra early last year during the dry spell.
UCAP’s initial target for CNO export volume is 765,000 tons for 2017.
CNO exports totaled 726,827 tons in 2016, down 13.85% from a year earlier, she said.
CNO is used in the production of a range food and cosmetics products.
The Philippines is the top CNO exporter with Europe and the US its biggest markets. — Janina C. Lim
HEAVY RAINS in Ivory Coast’s cocoa-growing areas are slowing the harvesting and sales of beans and farmers say they’re worried about black-pod disease rotting their crops.
Roads to plantations in the southwestern area of Meagui have been cut off after rivers overflowed and farmers can’t access their crops, which means they don’t know how the flowers and pods on the trees are developing, according to local grower Dongo Koffi.
“Everything is stopped at the moment,” he said by phone. “The sales have slowed down because we can’t harvest. Some farmers have some stocks of beans with them but they can’t sell them, because the roads aren’t accessible.”
While it’s still unclear whether Ivory Coast output will be materially affected, any losses due to the heavier-than-usual rainy season in the world’s top cocoa producer may help ease some pressure on prices, which have dropped by more than a third in the past 12 months amid expectations for a global surplus. The country, which is currently harvesting the smaller of two annual crops, is expected to produce a record amount this year.
Satellite imagery from the US Climate Prediction Center for June 22-28 suggests rainfall at or above normal across Ivory Coast. Year-to-date data from the National Meteorological Service through June 20 also showed an increase from 2016 in the Sassandra and San Pedro growing areas, as well as in the east.
Road access to the port of San Pedro was restored last month after roads and bridges connecting the region to the city were cut for about a week because of heavy rains, according to the prime minister’s office.
Cocoa for September delivery rose 1% to $1,960 a metric ton by 10:34 a.m. London time on ICE Futures US in New York, following a 4.3% gain on Friday.
Rains have been much more abundant than in June last year and farmers are concerned the wet weather will bring diseases like the black-pod rot, said Jean Kadjo, a grower in Niable in the east. Farmers surprised by the intensity of the rain haven’t been able to treat crops properly, while sales have slowed even for those smuggling cocoa across the border to Ghana in search of higher prices.
“In April and May, every week we could see about 10 trucks loaded with cocoa going through the city towards Ghana,” said Kadjo. “Now, there are about two of them.”
Farmers in Issia, in the center-west, have been able to tend to their crops including removing rotten pods, said Emile Yerpley Zadi. However, strong winds have torn some flowers off trees and the heavy rain is interspersed with overcast weather rather than sunshine, he said.
In Ghana, the second-largest producer, rainfall has been above normal in the cocoa growing regions, said Charles York, a meteorologist at the Ghana Meteorological Agency.
While trees are developing new flowers, farmers are concerned about some emerging signs of black pod disease, said Stephen Boakye, a chief farmer who supervises about 500 growers in Kibi, in the eastern region. Farmers have asked the Cocoa Board to quickly conduct another round of government-sponsored mass spraying “to avert a situation where we become victims of the blessing of rainfall,’’ he said. — Bloomberg
BRITAIN said Sunday it is to withdraw from a 50-year-old agreement allowing some foreign countries to fish close to the UK coastline, fulfilling a key Brexit pledge.
The deal pre-dates Britain’s EU membership and would therefore still have applied after the UK completes its divorce with the bloc, expected in March 2019.
Britain will trigger on Monday a two-year withdrawal period from the agreement, the London Fisheries Convention.
The convention allows vessels from five European countries — Belgium, France, Germany, Ireland and the Netherlands — to fish within an area that is six miles off the UK’s coastline.
“Leaving the London Fisheries Convention is an important moment as we take back control of our fishing policy,” Environment Secretary Michael Gove said in a statement.
The agreement is in force alongside the EU’s Common Fisheries Policy — allowing vessels from EU member states to fish between 12 and 200 nautical miles off the UK — which Britain will be excluded from after its exit from the bloc.
“This is an historic first step towards building a new domestic fishing policy as we leave the European Union,” Gove said.
“It means for the first time in more than 50 years we will be able to decide who can access our waters.”
According to government figures, British vessels caught 708,000 tons of fish in 2015, worth £775 million ($1 billion, €894 million).
Other members of the convention landed an estimated 10,000 tons of fish in British waters.
Ireland’s Agriculture Minister Michael Creed blasted the UK’s government decision as “unwelcome and unhelpful.”
“Brexit poses very serious challenges to the seafood sector and this announcement will form part of the negotiations,” he added.
Fishing rights became a hot topic during the campaign for the June 2016 Brexit referendum, with British fishermen voicing frustration over EU fishing quotas.
Leading Brexit campaigner Nigel Farage even led a small flotilla of fishermen up the Thames a week before the referendum, arguing Britain’s fishing industry was “literally being destroyed” as a result of EU membership. — AFP
BRAZILIAN farmers are discovering a downside to becoming one of the world’s top producers of soybeans: they’re running out of room to store all the unsold supply.
A combine harvester pours cropped soybeans in a truck, in Campo Novo do Parecis, about 400km northwest from the capital city of Cuiaba, in Mato Grosso, Brazil, on March 27, 2012. AFP PHOTO/Yasuyoshi CHIBA / AFP PHOTO / YASUYOSHI CHIBA
The biggest harvest in the country’s history is poised to leave domestic inventories at a record, data from the processors’ group ABIOVE show. Local prices to growers are down 29% from a year earlier, so farmers are stashing soybeans anywhere they can rather than sell, which is creating a storage crunch at grain bins just as Brazil’s record corn crop arrives.
“Warehouses are still full of soybeans while farmers start the winter-corn harvest,” said Nelson Antonini, a grower who sits on the board of Copasul, the 800-member farm cooperative in the municipality of Navirai, in the state of Mato Grosso do Sul. “We’ve been facing storage problems.”
So far, Copasul farmers have sold about 50% of their soybean production, well below the 80% they’d normally have unloaded by now, Antonini said. There’s only enough local storage capacity to stockpile 40%. To make room for new arrivals of corn, growers have taken 42,000 metric tons of soybeans out of storehouses and put them into plastic silo bags.
Similar problems are showing up across Brazil as harvests in the Southern Hemisphere come to a close. Most of the soybean crop is collected from February through May. While Brazil trails only the US as a producer, it exports more of the oilseed than any other country. Soybeans are crushed to make vegetable oil and animal feed.
What’s compounding the supply crunch is that the country will also reap a record corn crop, which may surpass 100 million tons for the first time, according to local forecasters. The first of two crops arrives in March, followed by a second harvest completed by the end of September. Brazil is the world’s third-largest grower and second-biggest exporter of the grain, behind the US.
Farmers in the South American country collected about 114 million tons of soybeans this season, up 18% from a year earlier, the US Department of Agriculture (USDA) estimated last month. US output and inventories also have been rising. While global output probably is headed lower over the next year, global reserves on Oct. 1 will be 21% higher than a year earlier at a record 93.2 million tons, the USDA estimates.
Brazil probably can stockpile about 65% of its total grain and oilseed output, according to data from Conab, the agency within the Ministry of Agriculture responsible for supply and demand forecasts.
“We’ve seen a great number of farmers ordering silo bags to store corn in Mato Grosso,” said Frederico Azevedo, a manager at Aprosoja, the state’s farmers group.
The big, white bags can hold about 180 tons of grain, keeping the contents mostly dry and protected from damage by weather or pests. They’re used widely in neighboring Argentina, but haven’t been common in Brazil until now.
That’s partly because plunging prices are discouraging harvest-season sales, forcing farmers to hold onto supply longer. In Mato Grosso, the biggest soy-growing state, the crop fetched 51.76 reais ($15.67) per 60-kilogram bag in the municipality of Sorriso on July 3, down from 72.84 reais a year earlier, according to data from Cepea, a research unit of the University of Sao Paulo school of agriculture.
Corn isn’t any better. Prices in Sorriso have tumbled 50% to 11.42 reais per 60-kilogram bag. That’s below the government-set minimum of 16.50 reais.
“If they had to choose between saving the soy or corn, they’re likely to prioritize corn sales and hoard the beans,” said Luiz Fernando Roque, an analyst at agricultural consultant Safras & Mercado. “Farmers don’t want to sell at current prices.”
Soy futures on the Chicago Board of Trade have fallen 2.3% this year, closing at $9.8075 a bushel on Monday. Corn is up 10% at $3.885 a bushel.
WEATHER BET
Farmers are betting that soybean prices may improve as US crops face weather risks during their growing season, which culminates in August when plants need rain to fill pods with beans, Roque said. A rebound is less likely in corn because there is such a big surplus of the grain, he said.
Farmers probably will have sold about 62% of their crop by early July, well below the five-year average of 80%, Roque said on June 29.
Also, because Brazil exports far more soy than corn, the market for the oilseed is easier to trade in, according to Andre Debastiani, a partner at Agroconsult. The country will account for about 43% of the world’s soybean exports, compared with about 21% in corn, USDA data show.
Corn prices probably will drop further because farmers prefer selling it and holding soy, Debastiani said at a crop tour last month.
FEWER EXPORTS
It also may mean fewer foreign sales of soybeans than initially forecast, according to Lucas Brunetti, an analyst at Pine Research. Shipments probably will total 59 million tons this season, down from an earlier forecast of 61 million, while corn sales will be 30 million tons, up from a previous estimate of 27 million, he said.
“The outlook for Brazil’s soy exports was more optimistic months ago,” Brunetti said.
Brazil’s winter-corn crop is known as “safrinha,” the second and largest of the two corn harvests. The crop is sown on the same land as recently harvested soybeans, and farmers have become more dependent on it for extra revenue every year.
“Brazilians will probably keep hoarding the soy,” Brunetti said. “Beans are farmers’ main breadwinner.” — Bloomberg
A combine harvester pours cropped soybeans in a truck, in Campo Novo do Parecis, Mato Grosso, Brazil, on March 27, 2012. — AFP
AGRICULTURE Secretary Emmanuel F. Piñol said he briefed senior officials of the United Nations Food and Agriculture Organization (FAO) on assistance and rehabilitation efforts for Marawi City and surrounding areas in Lanao del Sur.
Mr. Piñol said that the Department of Agriculture (DA) intends to coordinate its efforts with the FAO, which was represented by senior officials Kundavi Kadiresan and Dominique Burgeon. The rehabilitation program includes the provision of farm inputs and fisheries equipment to affected residents of the province.
“It’s all systems go,” Mr. Piñol said in his Facebook post on Wednesday, following the meeting FAO officials who were previously involved in the rehabilitation and assistance efforts in the wake of Typhoon Haiyan (Yolanda).
Mr. Piñol also said that both Mr. Kadiresan and Mr. Burgeon were familiar with the situation in Mindanao.
“The Master Plan for the Rehabilitation of Marawi City and Lanao del Sur will be finalized when I get back to the Philippines next week,” he said.
“Copies of the Master Plan for Agriculture and Fisheries Rehabilitation will be submitted to President (Rodrigo R.) Duterte to update him on the work of the DA and support organizations in ensuring that the people of Marawi City and Lanao del Sur are able to recover immediately,” he added.
To launch the program, the government will have to identify farmers and fisherfolk and geo-tagg their farms and fishing grounds in Lake Lanao.
“This will be followed by the provision of seed, farm inputs and other support funds for livelihood programs,” he said.
Mr. Piñol, however, failed to provide an estimate for the amount needed to rehabilitate agriculture in Marawi City and the Lanao area.
Separately, Mr. Piñol also said Project BASIL, or Balik Sigla sa Ilog at Lawa, will involve the stocking of Lake Lanao with fingerlings of indigenous fish species.
Under the program, fisherfolk depending on the lake could start harvesting mature fish by November to December this year.
The DA will also provide fiberglass boats to qualified fisherfolk while their spouses will undergo training in processing and packaging to add value to the catch.
Mr. Piñol said he has instructed the DA-Agricultural Credit Policy Council to make the Survive and Recover Loan Program available to affected farmers and fisherfolk, while the Philippine Crop Insurance Program will provide insurance coverage. — Janina C. Lim
A bomb explodes after being dropped on an Islamist militants’ hideout in Marawi, on the southern Philippine island of Mindanao on June 9. — AFP
The handout photo taken and released on June 25 by the Police Autonomous Region of Muslim Mindanao shows destroyed buildings in downtown Marawi after weeks of fighting between Islamist militants and the Philippine military. — AFP
XIAOMI Corp. has acquired a swathe of patents from Nokia Oyj, making its latest acquisition of technology to drive a global expansion.
Three models of China’s Xiaomi Mi phones are pictured during their launch in New Delhi, India, July 15, 2014.
The Chinese smartphone maker is getting its hands on a trove of intellectual property from the Finnish company that once led the world in phone sales before Apple, Inc. ushered in the smartphone era. The deal expands a portfolio augmented last year by the purchase of some 1,500 patents from Microsoft Corp., and may help smooth over potential legal tangles abroad. Under their agreement, Xiaomi will buy patents from Nokia for an undisclosed sum, while the two companies have agreed to share essential licensing rights.
Xiaomi, which has slipped in global smartphone rankings since 2014, is angling to make a comeback through investments in retail stores at home while fine-tuning an overseas expansion that’s slowed with the departure of former international honcho Hugo Barra. For now, it’s focusing on a selection of emerging markets including India, Russia and Indonesia. But the company has said it intends to establish a presence in the US, where it’s held off on selling phones in favor of cheaper devices such as fitness bands.
“We only want good assets. So both parties can get what they want,” Wang Xiang, who’s replaced Barra as the chief steward of Xiaomi’s international efforts, said in an interview.
Once the biggest smartphone vendor in China, Xiaomi’s shipments plunged in 2016 and the company was ranked by IDC just fifth in Chinese phone shipments in the first quarter, lagging local players like Huawei Technologies Co. It’s going through a major transformation anchored in part by a major push into old-fashioned retail: it plans to build 1,000 “Mi Home” stores by 2019 — about twice Apple’s global store count — targeting 70 billion yuan ($10 billion) of retail sales by 2021.
The other plank of its envisioned comeback is investments in technology. Its Pinecone smartphone processor debuted in February in a mid-tier phone available only in China, but is expected to expand to other models in time. It’s investing more heavily in research as well as building its ecosystem, a network of abut 100 companies it’s invested in that produce products from earbuds to robot vacuums bearing the Mi brand.
Nokia will also provide networking gear to Xiaomi as part of their agreement. — Bloomberg
LONDON — Move over blow-up dolls, the sex robots are here.
Nanotechnology engineer Sergi Santos holds the head of Samantha, a sex doll packed with artificial intelligence, in his house in Rubi, north of Barcelona, Spain, in this picture taken on March 31. — REUTERS
Artificial intelligence (AI) is making its way into the global sex market, bringing with it a revolution in robotic “sextech” designed to offer sexual gratification with a near-human touch.
In a report on the growing market in sex robots, the Foundation for Responsible Robotics said rapidly advancing technologies have already led to the creation of “android love dolls” capable of performing 50 automated sexual positions.
They can be customized down to the nipple shape and pubic hair color, and can cost between $5,000 and $15,000.
The increasingly lifelike robots raise complex issues that should be considered by policy makers and the public, the report said — including whether use of such devices should be encouraged in sexual therapy clinics, for sex offenders, or for people with disabilities.
Noel Sharkey, a professor of artificial intelligence and robotics at Britain’s University of Sheffield, said it was difficult to predict how far or fast the market would grow, or what its effect on societies might be in years ahead.
“Will these robotic dolls be niche? Or will they change societal norms and become widespread?” he asked at a news briefing. “How would (sex with a robot) equate to a truly human intimate relationship?”
The report looked at some of the most contentious issues, asking academics, members of the public and the sex industry for their views on whether, for example, sex robots might be helpful in reducing sexual crimes.
It found “major disagreement” on this question, with some arguing that having sex with a robot would reduce attackers’ desires to harm fellow humans, and others arguing that allowing people to live out their darkest fantasies with robots would have a pernicious effect on societal norms.
On the issue of “meaningful” relationships, the report said that with current AI technology, and even in the foreseeable future, no human-to-robot feelings would ever be mutual.
“The best robots could do is ‘fake it’” it said. “Robots cannot feel love.” — Reuters
FROM NOW until Aug. 31, one can feast on more than 60 Filipino dishes at the Waterfront Hotel and Casino Cebu’s UNO Restaurant as the hotel brings the celebrity chef duo, Rolando and Jackie Laudico, to headline the hotel’s “Feast for the Filipino Senses.” While UNO Restaurant, the all-day dining option at the sprawling 562-room hotel and casino, regularly features Filipino dishes on its lunch and dinner menus, the spread is usually a combination of other Asian and Western dishes — but for three months (the offering started in June) only Filipino food will grace the tables of the restaurant.
lechon is served at the Waterfront Hotel and Casino Cebu’s UNO Restaurant
“Filipino food has so many flavors and variations to offer. We’re bringing a new era and new excitement for the future for Cebu as a culinary destination, not only in the Philippines but the entire world,” Anders Hollen, Waterfront Hotel and Casino Cebu general manager told the media during the launch on May 22.
Included in the spread are five kinds of roasted items — from the ever-popular lechon (roasted pig) to other animals such as goat and cow — as well as modern interpretations by the Laudicos of Cebuano delicacies such as Ngohiong, a fried spring roll which they fashioned into cones, as well as danggit macaroon (a macaroon of dried fish).
The macaroon, which was a hit during the preview, was an interesting mix of sweet and salty as the danggit mousse undercut the sweetness of the macaroon halves. And since Filipinos are known for pairing salty to sweet, take for example the combination of tuyo (another dried fish) and champorado (chocolate porridge), the macaroon is a no-brainer.
Also in the spread are balut (fertilized duck eggs) shots which the Laudicos consider one of their signature dishes — it is served in their restaurants such as Guevarra’s in San Juan City.
“Ever since we became professionals in the field, our advocacy is to really promote Filipino cuisine. We’ve been to several countries abroad, we have done several food festivals in different hotels and restaurants abroad, and it’s always Filipino flavors that we champion,” Mr. Laudico told the media during the preview.
Meanwhile, Ms. Laudico brings to the spread local kakanin (rice cakes) in the dessert section. Feast upon Filipino desserts and merienda (mid-afternoon snack) favorites such as biko and queso de bola cheesecake. But please don’t forget to get the sinful molten tableya (chocolate) cake which is served in a ramekin and made-to-order. The cake, though small, packs all the goodness from the tableya — dark, yet still sweet. And since it’s molten, it’s perfect in its half-liquid state.
With the intention of including local ingredients to the spread, the Laudicos scoured Cebu’s farmers markets, specifically the Pasil fish market.
“What I enjoyed here is I went around Cebu tasting traditional Cebuano fare. We went to Pasil and we went there at 2 a.m. We noticed that they were eating this fish stew, it’s like sinigang (sour soup) but we made it into like a bouillabaisse style. It’s called nilarang. Then there’s the balbacua (Cebuano ox tail and skin stew), the one here is more soupy. What we did is we simmer the skin, knees, feet, and we reduced the stock until it’s really rich and extra gooey,” Mr. Laudico said.
The Laudicos are very interested in bringing their newfound discoveries not only to their restaurants but to other Waterfront properties as well — they revealed that they are in talks to do the same thing in the Waterfront Insular Davao property.
The Feast for the Filipino Senses runs until Aug. 30, with lunch and dinner buffets costing P898/pax. For reservations, call (032) 232-6888 ext. 8605. — Zsarlene B. Chua
NEW YORK — Joey “Jaws” Chestnut, a competitive eater, talks like any other athlete. Conditioning is key for pushing the body to its limit, the 33-year-old Californian says.
Joey “Jaws” Chestnut
He certainly stretched that limit on Tuesday, downing 72 hot dogs and buns in 10 minutes at the annual wiener-eating contest on New York’s Coney Island, a tradition that marks every Independence Day holiday in the United States.
Chestnut won the competition for the 10th time and improved on the speed-eating tally he posted last summer.
In the 2016 edition of the eat-fest at the Nathan’s Famous beachside hot dog stand — it began way back in 1916 — Chestnut wolfed down 70 hot dogs and buns in 10 minutes to win the title.
His personal record — and the world record — is 73.5 dogs and buns in 10 minutes, but that came during a qualifying round rather than an actual contest.
After Tuesday’s victory, organizer George Shea praised Chestnut as if he were a warrior returning from a distant battlefield.
“He is an American hero. He stands as a representative of freedom, of the American ideal,” said Shea to the 30,000 people who turned out to watch the competition.
Chestnut spoke of himself in more measured language.
“I am just a goofy dude who likes to eat. I am a lucky guy, to travel around the world and eat and make people smile,” he told reporters.
And Chestnut — who began eating competitively in 2005 in an asparagus-munching contest — does in fact want to get better for next year.
“I need to work on my condition so I don’t sweat as much, because it slowed me down. I’ll figure it out. I’ll make my body work better. I have to figure out my body so I can push it to the absolute limit,” said Chestnut.
America is famously fat, with obesity affected some one in three adults. So the hot dog contest is perhaps not a great example of healthy habits.
Nor is it easy to watch.
The rules allow the 18 competitors to soak their hot dogs and buns in water to make them easier to choke them down. Using their fingers, they slammed the frankfurters back into their mouths and leaned their heads back to help the food ooze its way south.
Besides the 30,000 on hand to watch the event, many more took in the spectacle on TV. Sports network ESPN carried it live for the 11th straight year.
The event is overseen by a federation called Major League Eating, which holds about 80 such competitions each year in a season that runs from February to September. There are separate bouts for men and women.
Tuesday’s female winner was Miki Sudo, who ate 41 hot dogs and buns in 10 minutes. — AFP
SEOUL — South Korean barista Lee Kang-bin is taking coffee art to the next level, creating miniature imitations of famous paintings on foamy cups of java at his central Seoul café.
South Korean barista Lee Kang-bin recreates Vincent van Gogh’s The Starry Night and Edvard Munch’s The Scream using thick cream stained with food coloring atop a cup of coffee REUTERS
With meticulous strokes of tiny brushes and spoons, Lee, 26, recreates the likes of Vincent van Gogh’s The Starry Night and Edvard Munch’s The Scream using thick cream stained with food coloring atop a cup of coffee.
The result of the painstaking 15-minute process is a 10,000 won ($8.71) cup of cold coffee that has won Mr. Lee thousands of fans at his café and online.
“One time I drew The Starry Night and it looked so special as the famous painting placed on top of coffee. After that, lots of people ordered that coffee,” Mr. Lee said, as he copied the painting off an image on his smartphone.
“Customers usually ask me to draw their favorite art works,” he added.
On his Instagram profile where he regularly posts images and videos of his so-called “creamart,” Mr. Lee says he has never learned to draw. He started brewing coffee at age 17, during his mandatory military service and enjoyed it so much that he bought a coffee machine and opened his first café for fellow soldiers in his camp near the border with North Korea.
Customers at his café are delighted with Mr. Lee’s art, which ranges from intricate paintings to cheeky recreations of Disney cartoon characters like Aladdin and Bambi.
“I heard (on TV) that this barista draws these kinds of famous paintings. I think he has very talented hands,” said Kim Su-Kyung, a 24-year-old university student who recently visited Lee’s store, named Cafe C. Through.
South Korea’s per capita coffee consumption has nearly doubled since 1990 to 2.3 kg per person, according to the International Coffee Organization — still roughly half the 4.5 kg that Americans consume. — Reuters
I MET with one of the most fascinating wine owners last week — Luis Felipe Edwards, Jr., of the eponymous Vina Luis Felipe Edwards or LFE. Luis Felipe Edwards, Jr. was a highly paid investment banker with a bright career in the banking industry having worked for Citicorp (of Citigroup, Inc.) in Santiago, Chile. But after some prodding from his father, the original Luis Felipe Edwards, Sr., to join their family business, Luis Felipe, Jr. finally caved in 2000.
LUIS FELIPE Edwards, Jr., managing director of Vina Luis Felipe Edwards
Having climbed the corporate ladder to be in an executive post in Citicorp after 11 years, Luis Felipe, Jr. knew he would be offered a lower salary by his dad, but being a family member he agreed to be involved with the family winery — but he demanded one condition. Luis Felipe, Jr. revealed to me during a casual chat at the Peninsula Manila last week that he told his dad: “You will be the boss, but I will be the pilot.”
So with Luis Felipe, Sr. acquiescing to his junior’s demand, the reins of Vina Luis Felipe Edwards successfully passed from first generation to second generation management. With the entry of Luis Felipe, Jr. to the winery, LFE was never the same again.
FROM HUMBLE BEGINNING TO MAJOR PLAYER
LFE started in 1975 when Luis Felipe, Sr. purchased 61 hectares of land at the Colchagua Valley, a prime viticultural region in Chile. Luis Felipe, Sr. produced only bulk wines, until in 1994 when he decided to sell his wines in commercial bottles and for export.
When Luis Felipe, Jr. became the Managing Director in 2000, the goal was to intensify the export business. Fast forward 17 years and export numbers of LFE grew from 60,000 cases (of nine liters) to a projected humongous 3,000,000 cases in 2017. This is an incredible 5,000% increase. No Chilean winery has grown faster than LFE, and now the company is a top four Chilean wine exporter, from a previous cellar-dwelling position of number 250 or so.
THE CHILEAN WINE SHORTAGE
The present situation of the Chilean wine industry was one topic in which the banker, finance person, and economist in Luis Felipe, Jr. came out naturally. Chilean wines have been among the fastest growing wines in the world. The country is the 8th largest global wine producer, but is the 5th largest wine exporter. Chile exports around 70% of its production, making it extremely vital to the country’s overall economy.
But it is not all that rosy as I learned from Luis Felipe, Jr. “The issue is supply and demand.” He continued, “While demand has been growing, especially in the export front, our supply has not improved over the last 15 years. Chile has roughly the same 130,000 hectares of vineyards the past decade and a half, composed of old vineyards that are actually producing less yields. Then there is also the effect of climactic changes like global warming.”
Basically, right now Chile produces 1.1 billion liters. Of the 1.1 billion liters, 200 million goes to domestic consumption while the rest goes to export. But of the 900 million liters for export, 350 million are sold cheap as bulk wines (in flexi-tanks and containers for rebottling elsewhere). Due to demand, most of the bulk wines will be sold back to the huge wineries at higher prices for commercial bottling, therefore prices are bound to increase unless there is a solution to the supply dilemma.
A SOLUTION
Luis Felipe, Jr. believes that Chile has a massive 200 million liters wine shortage. But unlike almost every exporting winery in Chile which rely on buying juices outside, including those meant for bulk wine export, Luis Felipe, Jr. took the other route and decided long ago to invest in vineyards.
“At present, most wineries produce only around 1/3 from their own vineyards, and they buy the rest from independent growers. And this number will only get higher if the wineries continue to grow but yet not increase their vineyard holdings. My estimate is that every year commercial bottling export is taking 30 million liters away from bulk wines and affecting price upwards. That is why I am determined to invest in vineyards. We are the only winery in the top 10 that is trying to lessen the gap between supply and demand. No other big winery is doing this, whether family or corporate.”
The investment banker in Luis Felipe, Jr. was definitely at his best. The investments in vineyards seemingly constitute a separate business from the wine business. “I practically keep two balance sheets. One is for the wine business and the other is for real estate. Perhaps I do not profit from real estate, but certainly my kids and their next generation will, given the scarcity of land.”
At the moment, LFE buys only 15% of its juices from outside sources, everything else comes from its vineyards, and because of this Luis Felipe, Jr. has much better leverage on prices than his competitors. “Certainly if you only need 15% of your requirements from outside source as against another winery that needs over 60%, the negotiation power is very different and we hold the balance of power on the prices.” This is the reason why LFE has kept prices unchanged while the rest of the Chilean wineries are raising their prices.
LFE should become self-sufficient by around 2020 with its new vineyards yielding juices, but if its export continue to grow — and it is growing much faster than the Chilean export rate — then LFE still needs to buy from outside sources. Luis Felipe, Jr. is therefore not yet done buying land, and has set a goal of acquiring 10,000 hectares while he is at the company’s helm.
QUALITY AS A FACTOR OF VALUE
Luis Felipe, Jr. was the very first wine person I met that compared Chile’s wines to Korea’s cars. As the analogy goes, Chile has great quality wines at good value, which is the same as perceived with the Kias and the Hyundais of Korea. He added, “Value is combination of two factors: real quality and cost. And the only way to get this done in our situation is to invest in viticulture. But investing in viticulture is most expensive. We are investing heavily in viticulture, research and technology.”
While Wines of Chile and other Chilean wine organizations are heavily promoting higher priced quality wines, like the single vineyard and limited release wines, Luis Felipe, Jr. believes that the entry level wines are still the most important and it remains the most overwhelming popular segment too for Chilean wine exports.
“You do not buy a Mercedes Benz if you simply want a practical, everyday, reliable car. A Kia would do the same function at a fraction of the price. To me, the entry level wines are very critical, and once we have this solid base, then we can always move up.”
This doesn’t mean LFE is only into entry level wines. The truth is LFE has done extremely well with its more premium range as well. LFE has been awarded the highest accolades from some of the most prestigious competitions around the world, including being named New World Producer of the Year by the Sommelier Wine Awards in 2016, and Chilean Producer of the Year by International Wine and Spirits Competition (IWSC) in 2012.
LFE is already the largest, 100% family-owned wine company in Chile. And Luis Felipe, Jr. worked not only with his dad, Luis Felipe, Sr., but also with his siblings and two of his brothers-in-law. Luis Felipe, Jr. wanted LFE wines to be known as the best value wines ever made, and his case will be proven soon here in Manila when LFE wines will be back on the shelves by late third quarter this year.
And yes, expect to get a very lovely Cabernet Sauvignon, and a juicy Chardonnay at less than P250 a bottle — now that is bargain!
The author has been a member of the Federation Internationale des Journalists et Ecrivains du Vin et des Spiritueux or FIJEV since 2010. For comments, inquiries, wine event coverage, and other wine-related concerns, e-mail the author at protegeinc@yahoo.com. He is also on Twitter at twitter.com/sherwinlao.
