How to Start a Rice Business in the

Philippines: A Beginner’s Guide

Share
Tweet
Last Updated on 03/12/2019

Rice has been a staple of Filipino diet since time immemorial. Therefore, opening a rice business in
the Philippines can be a smart move.
As with any other type of food business, there are two ways to make this happen. Either start your
own rice retailing business or franchise an already established brand.

Each has its pros and cons so you should weigh your options carefully before venturing into this type
of business.

Let this short article be your guide.

Go back to the main article: Best Small Business Ideas in the Philippines with High Profit

Capital: Starts at Php 50,000 (retailer) to Php 250,000 (franchise).

Ideal for: People who prefer to sell traditional products with an already established market.
Pros:
 Steady demand since Filipinos eat rice every day.
 Requires minimal marketing because consumers are already familiar with the product.
Cons:
 Rice is vulnerable to pest attacks especially if stored improperly.
 Quality of rice deteriorates after three months; spoils easily.
How to start a rice business in the Philippines.
Step 1: Secure license from the National Food Authority (NFA).
Law states that every corn or rice business in the Philippine must be approved by NFA, whether
they’re selling commercial or NFA rice/corn.

If you’re planning to open numerous outlets, you need one license for your main/principal store. All
other outlets will be considered as branches.

To get the license, go to the NFA office that has jurisdiction over the place where you’re planning to
establish the rice business in the Philippines.

Get the application form from the licensing officer (LO).

Submit the accomplished form and pay the application fee of Php 100. The license fee varies
depending on your capital.

Step 2: Ensure that you have the required equipment and facility to start the rice business in
the Philippines.
An NFA personnel will personally visit your store to check for the following:
 Calibrated weighing scale.
 Price tags (price of the rice per kilogram).
 White-painted rice boxes.
 Signboard (45 cm wide and 75 in long) showing your business name, NFA control number, and
the words “Licensed Grains Retailer” or “Wholesaler.”
 Classification, variety, and grade of the rice grains you’re going to sell.
Once approved, the NFA inspector will issue you a notice of inspection. Bring this together with the
official receipt and proof of compliance with deficiencies (if any) to the NFA office to get the
license.

For franchisees of Bigasanako.com or Grainsmart, you don’t need to file for a license because it’s
already included in their packages.
The downside is you need to shell out higher capital to get the franchised business started–a
minimum of Php 250,000 for Bigasanako.com and at least Php 298,000 for Grainsmart.

Step 3: Register your business with the Department of Trade and Industry (DTI) if you’ll operate it
alone and Securities and Exchange Commissions (SEC) for rice businesses operated by a partnership
or corporation.

Step 4: Choose a location frequented by your target market.

Great examples would be groceries or wet markets (“palengkes”) where people are already
conditioned to buy rice.

Step 5: Have enough space to store the sacks of rice. Keep the storage space clean and sanitized to
prevent infestation of rats, molds, weevils (bukbok) and other pests.
Use the “first-in, first-out” inventory method to ensure every sack of rice sold is high-quality and
doesn’t go beyond its shelf life. Remember, rice quality decreases significantly after three months.

Step 6: Set aside a regular budget for the rice supply. Some dealers won’t deliver rice to retailers
unless they order a minimum amount of rice from them.

Step 7: Partner with a reliable rice supplier or rice mill. If you’re in Bulacan, one of the highly
recommended rice mills is the Primavera Rice Mills in Guiguinto, known for supplying top-quality
rice to major restaurants and fast food chains in Manila.
List down all available suppliers in your area and cultivate a long-term relationship with them. This
way, you can avail of discounts when buying in bulk and provide your customers with a wide variety
of rice to choose from.

For franchisees, this might not be applicable since franchisors often have their own rice mills. Hence,
franchisees tied to a contract don’t have control over the quality of rice being distributed to them.
Step 8: Lastly, when transporting rice, separate it from other goods and make sure they’re all
covered properly.Otherwise, prolonged sun exposure will cause the rice to lose moisture and shrink
size by up to 3%. The insufficient covering may also expose it to flying weevils (bukbok), especially
if the transport vehicle passes by rice fields on the way to Manila.
Rice Retailing is
a profitable
business because
rice is the staple
food in our country.
There are many
rice varieties
thatconsumers can
choose from at low
cost The preferred
varieties for daily
meals are white,
long grained, and
aromatic.Glutinous
or sticky rice
(malagkit) are used
for native sweets.
Estimated Investment
Cost
 (based on 2009
prices)A. Basic
Equipment
o

Rice boxes, 6 pcs

–
12,622.50
o

Scooper
–
250.00
o

Pushcart
–
600.00
o

Weighing scale
–
900.00
o

Sub-Total
–

P4,250.00

B. Basic Weekly
Supplies (from rice
farmers/producers)
o

Sinandomeng, 450
kilos @P28.05/kg
–
P12,622.50
o

Dinurado, 400 kilos @

34.00/kg -13,600.00
o
Wag-
wag, 350 kilos @25.5
0/kg -8,925.00
o

Milagrosa, 250 kilos

@25.05/kg -7,012.50
o

Long Grain, 350 kilos

@25.50/kg -8.925.00
o
NFA Rice. 700
kilos @21.25/kg -
14,875.00
o

MalagkH, 50 kilos @3
4,00/kg -1,700.00
o

Sub-Total
–

P67,660.00

C. Packaging
o

Sando Bags, 3000 pcs

–
P450.00
Estimated total
investment cost
–

P72,360.00
D. Cost of Goods
Sold
o
Merchandise
Inventory Beginning
(20%)
–
P13,622.00
o

Add: Purchases (80%)

–
54,486.00
o
Total Goods Available
for Sale
–
68,110.00
o

Less: Merchandise
Inventory, Ending
–
13,622.00
o

Cost of Goods Sold

–
P54,488.00
o

Add: 15% Mark-up

–
8,173.20
o
Sales
–

P62,661.20

Estimated Weekly
Income
o

Sales
–
P62,661.20
o

Less: Cost of Goods

Sold
–
54,488.00
o

Gross Sales
–
P8,173.20
o

Less Operating
Expenses:
o

Labor (P200 x 7 days

x 1 worker)
–
1,400.00
o
Water and Electricity
(weekly)
–
350.00
o

Transportation/Deliver
y
–
500.00
Estimated total
weekly income
–

P5,923.20
Assumptions:
o

80% of the items are

being replenished
weekly.
o

80% of Cost of Goods

Purchased is
considered sold
weekly.
o

20% of the rice

remains In the
inventory per week.
o
15% is the mark-up
per item.
Tips:
o

Storage
–
Bukbok or weevil is a
natural enemy of rice
because it Is 90%
starch. They make rice
powdery so make sure
thestorage or
warehouse is managed
properly.
o

Observe First-in, First-

out Inventory method
–
 Inventory of rice
stocks should be kept
track. The quality of
rice will deteriorateif
the storage exceeds
three months.
Registration
Requirements
o
Business name
registration
(www.bnrs.dti.gov.ph)
o

Mayor’s/Business
Permit (check your
local
municipality/city)
o
BIR TIN
(www.bir.gov.ph)
o

NFA
(www.nfa.gov.ph)
Financing Facility
o
People’s Credit and
Finance Corp
(www.pcfc.gov.ph)
o

NLDC ([02] 914-

7290 to 97)
Technical Assistance
(Training and
Seminar)
o

DOST-STII ([02] 837-

2191 to 95,
www.stii.dost.gov.ph)
source: dti.gov.ph,
photo
from untvweb.com