Indigenously profitable

Morada Handicraft is old enough to have the second generation help out in the business. The founder, Edgardo Morada, continues to run the factory at barangay Isidro, Lipa City, Batangas while son, Ranel Morada, handles the marketing office/showroom in Makati.

"We started out as a maker of picture frames and boxes. Some years, we sold more picture frames, and some years, we sold more boxes. What set us apart was our use of indigenous raw materials, particularly sugar cane stalks and flowers and tobacco leaves," said the younger Morada.

With an initial capital of P2,000, Morada Handicraft bagged a sub-contracting order from an exporter. The decision to turn direct exporter and earn dollars 14 years later was made easy when the company began participating in provincial and regional trade fairs organized by the Department of Trade and Industry.

"We began to meet Foreign Buyers Association of the Philippines’ members, who bought products for department stores and specialty shops in the United States and Europe. During the Barakalan Trade Fair in Lipa, we met the representatives of a FOBAP member, Associated Merchandising Corp., who encouraged us to go into direct export," said Morada. "The move necessitated an increase in our capital. We no longer had the safety net of sub-contractors who could ask the direct exporter to advance 30% of the total order for operating expenses. As a direct exporter, we had to come up with 100% of the money."

Marketing

Today, Morada Handicrafts exports more than picture frames and boxes to the US, Europe, and Asia. The company has, however, chosen to use the same raw materials that it is known for, even when farmlands in Lipa have increasingly been converted into subdivisions.

"We now source most our raw materials from as far north as La Union but it’s worth it. In the just recently concluded Manila F.A.M.E trade fair for foreign buyers, we were the only one selling products that used sugar cane stalks and tobacco leaves," said Morada.

The use of indigenous materials has also helped the company compete against competitors from China, which does not grow sugar cane or tobacco.

Pricing has been equally crucial.

"We are neither cheap nor expensive. We’re in the mid-price niche by choice. When you sell cheap, your margin is too small but you hope to sell more. When you sell expensive, your margin is high but you don’t sell as much," said Morada.

The company currently has a workforce of 80 to 150, depending on export orders. Payment is made per piece, allowing the company to inspect the quality of each product made.

"China was a problem in the beginning. They could produce in volume and at a lower cost. But some buyers have returned to the Philippines because they’ve realized that they don’t want a warehouse or two of just one particular design," said Morada.

Trends

Equally important to the success of the company is its flexibility to new market trends. For example, the company has opted not to join the over-sized trend where decorative products for the home such as jars and boxes are made in giant dimensions. Instead, the company has chosen to concentrate on another design trend, which require that products not only look good but are also multifunctional.

One of the most popular pieces in the product catalog of Morada Handicrafts is a flower vase that can also act as a candle holder if the buyer gets tired with the vase and vice-versa.

"With hard work and a little luck, we hope the company will still be around for the third generation," said Morada.