QUEZON CENTER for RESEARCH and STUDIES,INC.

INSTITUTE OF MANAGEMENT
Lucena City

SANITARY CARE PRODUCTS ASIA, INC.

BY:

GRACE S. HUTALLA
I. INTRODUCTION

Sanitary Care Products Asia, Inc (SCPA, INC) is first and foremost a Filipino
company that manufactures high quality tissue paper products for households
and institutional needs. It is their belief that every Filipino deserves access to
quality hygienic paper product at very reasonable prices.

I chose this company for a single reason that I currently work here and
that I believe that our company is socially responsible.

These days, being a responsible participant in the larger society is not

optional for the company. To position their brand as a forward-thinking
corporate citizen, they must take authentic steps to provide solutions to
common human problems in the. Valuing corporate social responsibility, or CSR,
will not only benefit larger community, but it will also provide with specific
organizational benefits.

II. CONTENT

VISION

Sanitary Care Products Asia is imbued with the vision to provide hygienic and
good quality tissue products at the lowest cost possible.

MISSION

We are guided by the mission to become synonymous with “quality products at

reasonable prices” and “excellent service”.

HISTORICAL BACKGROUND

The man behind the company is Mr. Renato Sio who is currently the
chairman of SCPA. SCPA was born in the golf course in 1995, but that is getting
ahead of the story. He was employed in PICOP, then, the top name in the paper
business in the Philippines. After that, he moved to Bataan Pulp & Paper Co.
owned by the Prieto family and partners. It was Marixi Prieto’s late father who
started Bataan Pulp & Paper, but when he passed on, Marixi took over the reins.

Over the years, the Prietos saw their profit margins steadily shrinking, as
narrated by Rene, and while the business was not entirely in the realm of interest
of Marixi, she wanted to hold on to it if only for the memory of her beloved
father. What she did was to send two of her top executives to Hawaii to take up
some short courses in management—the company’s VP for Marketing and the
VP for Manufacturing, Mr. Sia himself. Armed with the company’s financial
statements for the recent years, Bataan Pulp & Paper became a case study for
the management school. At the end of the course, the professors came up with
a verdict: the Philippines has no competitive advantage in manufacturing
paper products, so why manufacture here when it was cheaper to import the
paper, make the finished products here and sell to the local consumers.

Rene Sio came home and reported to Marixi on the verdict, but Marixi
was lukewarm to the idea of keeping the company running. A flash of brilliance
came to Rene then and he asked Marixi: would you allow me to retire now and
use my retirement money to take over the business? With Marixi’s blessings, the
work of a lifetime was just starting for Rene who was then 45 years old.

Rene had a regular foursome at the golf course where they played
religiously at least once a week. He broached the idea of starting a paper
manufacturing company with his golf mates, and right there and then, Sanicare
was born, in the golf course.

They started off with simple, ordinary machines but slowly upgraded to
bigger, more complex and modern machineries. At that time, the price of tissue
paper in the Philippines in the market was high. Rene calculated the landed
cost of imported paper and saw that he could reduce the selling price by as
much as 40 percent. Over a span of twenty years, the cost of tissue paper in the
Philippines has gone down, thanks to SCPA. Toilet paper back then was only at
400 sheets per roll; now they come in 1,000 sheets per roll, and at a much
cheaper price.

SCPA was officially born in 1996, and the Filipino consumer is now better
off from Rene’s diligent computations which dictated that paper should be
imported rather than manufactured here. The Philippines simply could not
compete with the larger, more modern machineries they have abroad, the
quality of our paper is not as good as imported paper, and our manufacturing
costs are higher. There was simply no other viable recourse but to buy from
abroad. Rene merely copied from his competitors and gave a discount of 40
per cent on the finished products, which gave Sanicare a huge advantage in
the consumer market.

The Filipino housewife did not need any persuasion to patronize Sanicare
products — the quality was good, the price even better, so in their twenty years
of corporate existence, Sanicare grew exponentially to become a market
leader in paper products. They started with only four basic products: toilet
paper, facial tissue, table napkins and paper towels.

When Sanicare first started, they had 11 employees and Rene paid more
than his dues in rendering work for the company. For five years, this ardent golfer
did not set foot on the golf course because of the pressing work needs for his
fledgling company. Now, Sanicare has over 1,000 employees, many of them
based in the provinces while the competition stayed in Metro Manila. For Rene,
freight costs have a big impact on the final selling price of any commodity, so
the solution was to bring the finished products to the consumers. He set up his
plants in strategic places to serve the North, South, East and West. That meant
setting up warehouses in Cebu, Davao, Cagayan de Oro, Dagupan, Lipa and
Mabalacat, among others. They have some 23 warehouses, seven of which
have manufacturing plants. The paper they import lands directly in Cebu, or
Davao or wherever they have their plants, so freight costs are eliminated.

Now also, the company has the most modern machines in the industry, all
fully automatic. To the environmentalists who criticize them for using virgin pulp
(which has no lint), they developed a new technique where they use recycled
paper inserted in between virgin pulp sheets, and they call these the eco-layer
product. Thus far, they are the only manufacturer able to do this with their
special machines.

To be sure, the Philippines being an archipelago poses many challenges,

so Sanicare had to put up warehouses in tourist places like Boracay, Palawan
and Bohol. After 20 years, Sanicare can declare that they have fully saturated
the local market, so they are now looking at other island nations to duplicate
their feat.

COMPANY PROFILE

Established in October of 1996, Sanitary Care Products Asia is a Christian

family-run company that continues to serve the Philippine market with high
quality products at competitive prices. A tissue converter with offices located
nationwide, SCPA serves both the retail market and institutional markets.

Partnered with the push for innovation of SCPA is the belief that every
Filipino should have access to quality products. As such, SCPA aligned its brands
to meet the different needs of the local market while remaining
uncompromising in its promise of providing excellent products and service.

With 9 branches and 13 office satellites in major parts of the Philippines,

SCPA is poised to easily serve its clients nationwide.
A. LOCATION and BRANCHES

Main Office: Antonio Drive Sta. Maria Industrial Estate, Bagumbayan, Taguig
City, Metro Manila,

6 OTHER PRODUCTION FACILITIES

BATANGAS: LTZ 1, Purok 1, Brgy. Bugtong na Pulo, Lipa City

Cagayan De Oro: Zone 5, Luyong Bonbon Opol, Misamis Oriental

CEBU: Bankal Mactan, Lapu Lapu City

Dagupan: Sitio America, Brgy. Bonuan Binloc, Dagupan City

Davao: Carlos P. Garcia Highway, Diversion Road Km 12. Brgy. Sasa, Davao City

Pampanga: Mauaque Rd, Brgy. Dapdap, Mabalacat, Pampanga

16 Sales and Distribution Offices nationwide

Isabela: National Highway, Brgy. Alinam, Cauayan City 3305 Isabela

Mindoro: Brgy. Pachoca cor Block 6, Sta. Maria Village, Calapan City 5200
Oriental Mindoro

Laoag: Sitio 6 Brgy 50. Buttong, Laoag City, 2900 Ilocos Norte

Bicol: Lot 7-A, Zone 2, E. Fausto Drive San Felipe, Naga City 4400 Camarines Sur

Leyte: National Highway Brgy. Arado, Palo 6501 Leyte

Bohol: Purok 3, Dao District, Tagbilaran City 6300 Bohol

Iloilo: SCPA Complex, Circumferential Road, Corazon C. Aquino Avenue., Brgy.
Pakiad, Oton, Iloilo City

Boracay: SCPA Bldg. Sitio Bantud, Brgy. Manoc-Manoc Boracay Island, Malay
5608 Aklan

Palawan: T.S Paredes Sr. Road, Brgy. Masipag, Puerto Princesa City 5300
Palawan

Bacolod: Alunan Avenue, Brgy. 36 Bacolod City 6100 Negros Occidental

Dumaguete: C/O BJB Marketing, Boloc-Boloc, Sibulan 6201 Negros Oriental

General Santos: 32 San Pedro Extension corner Leon Llido St. Lagao, Gen. Santos
City 9500 South Cotabato

Butuan: Primeterra Properties Purok Pechay Brgy. 2 Golden Ribbon, South

Montilla Blvd, Butuan City 8600 Agusan del Norte

Surigao: Primeterra Properties Km. 3 Brgy. Luna Surigao City 8400 Surigao del
Norte

Ozamiz: Lot H893-A-1 Purok 6 Circumferencial Road Brgy. Lam-an Ozamiz City
7200 Misamis Occidental

Zamboanga: Warehouse B4, Limbros Cmpd. Veterans Ave. ext. Tumaga District,
Zamboanga City 7000 Zamboanga del Sur

B. FOUNDER

The President and Chief Executive Officer Renato C. Sio who holds a
Bachelor of Science in Chemical Engineering degree from Adamson University
C. COMPANY ASSETS

SCPA owns and operates converting equipment on a 3,000 square meter

factory warehouse located at No. 25 First Avenue, Manalac Industrial
Subdivision, Bagumbayan, Taguig, Metro Manila. Converting capacity is 200
metric tons equivalent to over 2,000,000 bathroom tissue rolls per month. Total
assets as of end of September 2001 are P 98 million of which Stockholders Equity
is P53.118 million.

At present, they acquired a lot with a total of 7,000 square meter in

Tanauan, Batangas which will be used a new production plant. All of their
production facilities and half of the satellite branches are company-owned.

D. SIGNIFICANT INFORMATION

What is virgin pulp?

Virgin pulp is the raw material derived from trees when it is mashed and
dissolved for the purpose of preparing it for papermaking. When processed in
mills, it requires no artificial whiteners or de-inking chemicals typically needed for
recycled materials.

What is recycled pulp?

Recycled pulp is derived from newsprint, carton boards, and office /

communication papers.

Why SCPA uses virgin pulp and not recycled paper for its personal care
products?

They believe in providing the local market with hygienic and safe paper
products. Tissue products touch very sensitive areas of the skin, which requires
utmost care. In fact, tissue products were first marketed under medical supplies.
 However, as companies sought for ways to lower their cost, they also cut
down on the quality of their products, beginning to use recycled materials under
the guise of being environmentalist.

So you’re not a green company?

SCPA has always and will continue to believe in preserving and protecting
the environment. They support using recycled materials for products that will
have no adverse effect to customer’s health. As such, newsprint, office paper
and the like are perfect end products for recycled materials. Not for tissue
paper, however, as it requires so many chemicals to make it usable and these
chemicals can even be more harmful to the environment and not the least, to
the consumer.

At the same time, we source all paper stock from managed forest
concessions abroad, where sustainable extraction is supported and enforced by
regeneration policies such as re-planting. As much as we would like to support
the local industry, many of our forestry concessions remain unregulated and do
not ensure the regeneration of the forest resource.

What so wrong about the recycling process for tissue products?

The recycling process requires the use of various chemicals such as

caustic soda and surfactants to break the material into individual fibers. More
chemicals are then added in the next stages of the process:

• The de-inking process involves the use of surfactants and polymers to float
out unwanted materials from the slurry

• The grey pulp is then bleached using chlorine or hypo, lone known to be
carcinogenic

• To achieve white slurry, artificial whiteners or Florescent Whitening Agents

(FWA’s) are also added in the process. FWA’s are banned in most countries for
use in hygienic products, particularly paper products that are used in personal
acre and hygiene due to skin contacts

• The resulting wastewater will require major and expensive treatment prior
to disposal. Due to the significant expenses in water treatment, most small and
medium-sized paper companies do not implement any wastewater treatment
processes. The waste products are more often than not released directly to the
environment, along with the various chemicals described above.

What makes SCPA products different?

1. Our products are made from 100% virgin pulp. This makes our product truly
hygienic unlike locally available recycled tissue products. The paper feels thin
yet it is strong and will not easily disintegrate when in contact with moisture. This
is because virgin fibers still have their inherent content of natural wet strength
resins that help bind the fibers together. This higher resistance to moisture
prevents linting on moist surfaces. Linting (himulmol) can cause all sorts of
irritations and worse, allergies or urinary tract infection.

2. Our products produce less dust and lint. Virgin pulp stock has long fibers
that intertwine well to form a well-bonded sheet. This is the reason our product
does not dust as much as recycled tissue paper. The recycling of waste paper
causes damage to the fibers producing shorter fibers that are easier to get
picked out of the street. Just flick your forefinger on recycled tissue and see how
much dust it releases. Compare this to our product, which produces very little
dust.

3. Our products are chlorine free. Elemental chlorine (such as chlorine gas,
hypochlorite or Clorox) is a very effective and cost-efficient bleaching agent in
the manufacture of paper. In the last ten years, however, mills in Europe and
North America, stopped using it because it produces dioxins as a by-product.
Dioxins have been linked to cancer. Local mills all use chlorine in the form of
sodium hypo to bleach wastepaper. The alternative is to use hydrogen peroxide
which is too expensive. None of them can thus claim that their product is
chlorine free.

4. Our products do not have artificial whiteners. In North America and

Europe, artificial whiteners are not allowed in paper that is in contact with the
skin or with the food products. Unfortunately, most of the local paper mills us big
quantities of these artificial whiteners to hide the ink and dirt, which comes with
wastepaper. Our product does not contain this, which is why it is off-white in
color.

5. Our products have consistent winding and sealing. Our sheet count is
digitally controlled and is very accurate. Most competing brands have large
cores to make their product look bulkier on the shelves. However, if you read the
labels, their sheet count is the same as ours. Even though we can control
looseness to whatever diameter we prefer, we wound our products tightly to
make it look and neat and clean.

SCPA Corporate Philosophy: Competitive Pricing

Partnered with the push for innovation of SCPA is the belief that every
Filipino should have access to quality products. As such, SCPA aligned their
brands to meet the different needs of the local market while remaining
uncompromising in its promise of providing excellent products.

SCPA Corporate Philosophy: Providing Jobs for the Filipinos

The founder and current president of SCPA envisioned providing 20 jobs in

the Philippines when he started the business. If he could do that, he said, he
would be very happy. To say he overshot the goal is a definite understatement.
The business has grown in the last ten years to now provide jobs for over 100
regular employees and over 130 contractual workers, with 7 office branches
and 11 satellites in major parts of the country.

Even in the factories, this philosophy remains to be upheld. While many of

our competitors have turned to machines to pack and seal products, we
continue to use people, even if maintaining this operating set up is much more
expensive and does not achieve the same quality as machines. Providing
livelihood for Filipinos is of more interest to SCPA.

RECOGNITION / AWARDS

The family behind Sanitary Care Products Asia (SCPA), one of 10 families
bestowed the first Philippine Family Business Awards.

Held in April at the Ateneo De Manila University Escaler Hall, the

recognition of successful family businesses is a joint undertaking of the country’s
premier Catholic educational institution through its Family Business Development
Center and Union Bank of the Philippines.

SCPA’s Chairman RENATO SIO was one of the nominees for the ASIAN
ENTREPRENEURS last 2016.
 Habitat for Humanity Philippines Managing Director and CEO Charlie
Ayco commended SCPA for its hand in nation-building, and in upholding its
Christian faith. “Habitat is very honored to work with SCPA in building better
homes for our Filipino brothers and sisters in need.

SCPA is recognized also by our business partner in RETAIL INDUSTRY.

III. CORPORATE SOCIAL RESPONSIBILITY

PROJECTS /PROGRAM / ACTIVITIES

For their CSR, SCPA is working at uplifting our local schools by exposing
them to culture and art like shows sponsored by CCP and Ballet Philippines.

They are also working with Habitat for Humanity to build houses; their
ultimate dream is to be able to provide houses for their employees.

They are continuously supporting schools for their annual BRIGADA

ESKWELA by adopting a school in the different parts of the country where their
branches are located which is now on its 3rd year.

BRIGADA ESKWELA 2018

 They also have other community outreach program year round
performed by their satellite branches during their branch anniversaries.
 BORACAY CLEAN UP DRIVE 2018

They are an advocate of clean and green revolution by providing trash

bins in crowded places like bus terminals and joining and supporting tree
planting activities.
Sanitary Care Products Asia Inc. (SCPA) has tapped German alternative-energy
producer PV2 Energies to power its operations in Pampanga. And with its new
facilities equipped with the solar rooftop, will allow for the production of 160,117
kWh per year—only a quarter of the factory’s present electronic demand, but
will lead to substantial carbon-emission reduction.

SCPA continuously uplift their employees’ morale by providing trainings

and seminars to add insights and knowledge that will help them achieve their
dreams. Giving loyalty awards through different incentives like Free Vacation Trip
in the country and even abroad, giving extra bonuses and profit sharing.
 They also want their employees’ to be healthy thus providing a medical
assistance and other health supplements for their employees’ welfare and also
for their spiritual needs.
 They partnered with HARIBON FOUNDATION through its program ROAD TO
2020 for 3 years now.