Peru FoodNews 2010 - GBR

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A Global Business Reports publication
A Global Business Reports publication
19
SUPPORTING THE
INDUSTRY’S GROWTH
As the Peruvian food sector increases
in size and reach, it requires the
services of well-prepared and, in
some cases, global providers.
To plant asparagus seeds are required;
fertilizers might be added to the soil, and
pesticides may also be needed. Once harvest
time comes, the product might be processed,
which involves the related infrastructure and
machinery, and perhaps the asparagus might
be jarred or canned, for which a provider of
containers is necessary. In order to produce
an asparagus salad, a special flavour or
colour might be added. This will require
additional providers. Finally the product is
ready to be shipped overseas, for which the
help of a specialised transportation company
is needed. If the product is fresh or frozen,
this must be a logistics provider that knows
how to keep the cold chain door-to-door.
This example, although rather simplistic,
illustrates the plethora of related companies
that work hand in hand with food producers.
In parallel to the growth and modernisation
of exporters, their partners across the value
chain need to respond to the challenges of
globalised markets. While the country’s
infrastructure continues to be a headache
for the industry, at least producers can rely
on a number of high-quality providers.
Those service suppliers that have
understood the requirements of the market
are enjoying very good rates of growth.
Agronegocios Génesis, a provider of seeds
and seedlings for agribusiness companies,
expects to increase its turnover by 35%
in 2010. The company has a production
capacity of 1.2 billion seedlings per year,
thanks to a network of nurseries in Peruvian
locations such as Arequipa, Chincha,
Huaura and Motupe.
José Rosemberg, General Manager of
Agronegocios Génesis, comments that
the industry has evolved greatly over
the last decade with the introduction of
hybrid seeds, and stresses the importance
of the company’s work in research and
development: “We have tried to work
closely with experts in genetics in order to
bring the latest innovations to our clients.
About 20% of our resources are dedicated
to R&D, between innovation as such and
the development of the product together
with the client. Entering any of the new
product lines requires a lot of work and
testing, which can take years.”
The company has grown to participate
in many product lines over the last years,
including asparagus, table grapes, artichokes,
capsicums, bananas and avocados, and it is
currently looking for providers in the citrics
business. According to Rosemberg, the
advantage of Agronegocios Génesis is that
it can provide a complete solution in both
seeds and seedlings: “We are constantly
looking for new clients and new providers
whose products could be introduced in the
market. We offer a very complete package
with a comprehensive after sales service
and we can also provide financing to our
clients”.
Financing is actually a key issue.
Perhaps because the modern agribusiness
is relatively new in Peru, banks still see
the industry as ‘high risk’. After the global
economic crisis, raising funds in the agro
sector is not as easy as it would be in the
country’s very rich mining industry, for
example. In this context, one of the banks
that has moved more decidedly to support
agribusiness companies is Interbank.
“We look for sectors that show a big
deficit and important opportunities, and to
which other banks are more reluctant to
enter”, asserts Andrés Muñoz, Executive
Vice-President of Commercial Banking,
Interbank. “The agro industry accounts for
just 3.5% of the total financial placements.
It is an important business for Interbank,
because we have nearly 25% of this market,
but perhaps other banks don’t see it as being
very interesting”.
According to Muñoz, the placements
for the fishing industry are currently in the
region of USD 1.8-2 billion, while they
amount to roughly USD 900 million in the
agribusiness. Beyond financing, Muñoz
claims that the bank can also offer significant
advisory support to exporters. “We go
beyond a simple commercial relationship
between a bank and an institution. We need
to offer a bit more, because the competitors
are world-class. In this context, we are very
strong in consultancy services”, he says.
Flavours and
fragrances
As we have seen in the previous article, the
increasing affluence of Peruvians is pushing
up the consumption of processed foods. As
a result, the food additives business is also
growing, with players such as Montana,
Sensoria and Granotec ready to serve the
industry in its needs for colourants, flavours,
fragrances and tailor-made solutions.
Ofelia Carranza, General Manager of
Sensoria, a company which years ago was
mostly dedicated to distribution, explains
how her team is increasingly developing its
own products and solutions: “The flavours
and fragrances business, to a large extent,
has become very competitive; therefore
PISCO: PERU’S FLAGSHIP DRINK
Of all the quarrels in which Peru
and Chile have engaged in recent years
(which include a litigation at The Hague
over their common maritime border), the
argument about pisco is perhaps the one
that provokes the most passion among
Peruvians. In a nutshell, both countries
commercialise a liquor distilled from
grapes under the same name, and both
promote it as their national drink, with
assurances that it originated within their
respective borders.
This has translated into legal battles
over the registration of the Pisco
denomination in the international
markets. However, as the commercial ties between the two countries are stronger
than ever and the bilateral diplomatic relationships are substantially improving,
some industry leaders hope a deal will be struck at some point for the best interests
of everyone.
Leaving the disputes aside, what Peruvians and Chileans produce under the Pisco
name are essentially different drinks. “The first difference has to do with the type
of grape used”, explains James Bosworth, Manager at Viñas de Oro, Peru’s largest
exporter of Pisco by volumes with 38 000 litres (2009 figures). “The production
process is also different. In Chile they add water to obtain the percentage of alcohol
required, while in Peru the alcohol is directly obtained from the still, without altering
the organoleptic qualities of the product”, he adds.
Between 2002 and 2009 exports of Peruvian Pisco have increased twelvefold
in volumes, from 18 000 to 231 000 litres, and seventeen fold in value, from
USD 80 000 to nearly USD 1.4 million, according to the statistics of the Peruvian
National Commission of Pisco (CONAPISCO). Currently the main destination
markets are the United States, Chile, Colombia and Spain.
At a national level, thanks to a strong promotion effort by the industry and the
authorities, both the quality and the consumption levels of Pisco have increased.
Pisco sour, the country’s iconic cocktail, is widely served in restaurants and bars,
along with other tasty and colourful combinations. In many instances Pisco is
actually replacing whisky and other liquors as the drink of choice, claims Bosworth.
National production is expected to reach 7 million litres in 2010, a 5% increase on
2009’s output. If we compare this to 2000’s 1.6 million litres, we could say with
certainty that Pisco has potential.
Peruvian anchovy has enormous potential as a direct human consumption product
(Photo courtesy of TASA)