Peru FoodNews 2010 - GBR

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A Global Business Reports publication
A Global Business Reports publication
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Alfonso Velásquez,
Former Minister of Production and
President of Procesadora SAC.
industry players believe that this needs to
change. It is not a question of fishing more
(the country already has a quotas system
that appears to be working well), but to
use a larger portion of the catch for food
products rather than animal nutrition. “Of a
12 million tonne biomass we are exploiting
about 60%. I think this is quite sustainable”,
affirms Hugo Vernal, General Manager of
Inversiones Prisco, an anchovy producer. “In
the next ten years we should see the share of
direct human consumption grow to 50% of
the total catch, which means the production
of fishmeal will have to decrease”.
The question is, will fishmeal producers
go down that route? “Peruvian anchovy is
one of the world’s largest biomass from one
single species. We therefore need to develop
a business based on frozen and canned
anchovy”, affirms Humberto Speziani,
Advisor to the Board at Tecnológica de
Alimentos (TASA), the world’s largest
fishmeal producer.
Other industry managers go as far as to say
that if all the anchovies dedicated to fishmeal
production were used as food, no-one in the
world would be starving. However, there are
cultural barriers that need to be overcome,
as Peruvians themselves generally dislike
the strong taste and colour that anchovies
have, and it is only in recent years that they
are starting to eat them.
According to Henry Quiroz, President
of the Fish Committee at the Exporters
Association (ADEX) and Manager at
Hayduk: “In Peru, most of the fishmeal is
used in the production of aquiculture items
for well-off consumers, whereas canned
anchovies would be more affordable. To
make one tonne of fishmeal you need over
4 tonnes of anchovy. Yet for 1 tonne of
conserves you only need 1.8-2.2 tonnes of
anchovy. The problem is the perception of
the people. They do not see anchovy as an
attractive product”.
Yet anchovy is very rich in proteins and
the Peruvian sea offers much more: giant
squid, chub mackerel, horse mackerel,
mahi-mahi (dolphin fish), hake, tuna fish
and scallop, just to name the most important
products are also found in abundance.
In spite of poor catch figures for the first
months of 2010 due to an El Niño-like
phenomenon (the waters have been warmer
than usual due to the arrival of Kelvin
waves), the richness of the Peruvian sea is
not in question.
More ambitious goals
“We still have a long way to go, as our current
export levels indicate. According to the
World Bank, sales abroad must be over 29%
of the GDP for a country to be considered
an exporting economy, and we are presently
at 20%”, affirms Peter Anders, President of
the Lima Chamber of Commerce. Anders
salutes the implementation of an everincreasing
number of FTAs, but warns
that the current growth in the economy
and, more specifically in the food industry,
is not being met with the development of
essential infrastructure: “In many cases,
the inefficiencies in the main infrastructure
sectors (telecommunications, transportation
and logistics services) increase the
exportation costs more than other barriers
to foreign trade”.
These other barriers can be the increasing
amount of compulsory certifications, says
Juan Carlos Mathews, Director of Exports
Promotion at Promperú, a governmental
body: “In order to export to certain countries,
we have to be approved by their national
certifications; sometimes by two different
bodies. Moreover, even if a product does not
require a certification, the buyer will always
favour any quality or social responsibility
assurances that competitors may offer”.
In the end it all comes down to
competitiveness, and while individual
companies can do their best to obtain the
needed certifications and to improve its
social responsibility standards, the country’s
big infrastructure deficit is a problem to be
addressed sooner rather than later, otherwise
the country will become a victim of its own
success. This situation is already improving,
but many argue that it is not changing at the
required pace.
Beyond this, the conditions for growth
elsewhere are generally met: there is
political stability; the rules of the game
for investments are clear; the country has
excellent conditions for agriculture as
well one of the world’s richest seas; and
its privileged location right on the Pacific
Ocean and in the middle of South America
can only make it easier and cheaper to reach
destination markets.
With an expected boom in demand
coming from Asia in the years to come, sea
links are essential. The markets are already
following Peru with a watchful eye, and with
good reason: its potential to become one of
the world’s key food suppliers is real.
PERU’S TOP
EXPORTERS
Diversification, quality, social
responsibility. Some of the key
exporters explain what it has taken
them to succeed in Peru’s food and
beverage sector.
“Don’t put all your eggs in one basket”. This
expression, that has become a cliché in the
world of business, is nevertheless pertinent
in Peru. Peruvian exporters are, to a large
extent, diversified businesses that are not
easily categorised under strict headers
such as “asparagus producer” or “anchovy
exporter”. In a global world where big
buyers and international distributors require
a wide range of products to serve their final
markets, sourcing from players that can
meet not just one, but a number of needs,
makes sense.
Camposol, Peru’s largest agro exporter,
currently has the world’s largest single
plantation of avocados, covering 2 400
hectares according to the company’s CEO
Fabio Matarazzo, who explains: “Camposol
based its initial success on asparagus.
Today, this market is not saturated yet, but
it is mature and now our company needs to
diversify. The advantage we have is that
decisions in this company are made very
fast. We have a good mix of scale on one
hand and flexibility on the other”.
Besides asparagus, peppers and avocados,
the company is producing new products
such as mango and table grapes which
should yield significant growth rates in
the years to come. This diversification
enables companies to tackle the effects of
potential price fluctuations and adverse
weather effects. However, offering many
product lines requires a strong focus on
quality on all fronts and presents the
challenge of having enough volume in the
different products to adequately serve the
clients. Managers at Agroindustrias AIB,
a company offering fresh, conserves, IQF,
juices and concentrates as well as essential
oils, adamantly reject the idea that you
cannot be very good in many things.
“We are the most diversified company in
Peru. We may not be very big in all our lines,
but being diversified gives us a competitive
advantage”, insists Roberto Falcone,
General Manager of Agroindustrias AIB.
“In 2009, even though our sales decreased
by 4% in volume with the crisis, we were
flexible enough to react and ended up
having bigger profits than in 2008”.
With regard to quality, Falcone insists
that the company’s aim is to reach 100%
traceability, which is not easy when sourcing
from third party producers. As part of this
strategy, the company has implemented
SAP. AIB is also diversified geographically,
operating both north and south of Lima in
order to offset possible climatic variations.
This is important in both the agro sector and
the fish industry, which relies entirely on
the biomass available.
Large fishmeal producers, for instance,
maintain plants all along the coast.
Concerning sea products for human
consumption, investing to adapt a plant so
that it can process a number of different
products can pay off, as is shown by the
example of Seafrost.
Based in Paita (northern Peru) and owned
by an Italian family, Seafrost transformed a
crisis into an opportunity in 1997-98 when
the El Niño phenomenon warmed up the
waters in the Pacific: “There was a crisis
of hake catch and many companies in Paita
went into bankruptcy because they were not
prepared to process other products”, explains
Antonio Bologna, General Manager,
Seafrost. The company designed its 40 000
square metre plant with a strategy in mind
to diversify as much as possible: “With El
Niño the species available change. If all
TOP EXPORTERS 2009 - AGRO INDUSTRY (NON-TRADITIONAL)*
TOP EXPORTERS 2009 - FISH (NON-TRADITIONAL)*
COMPANY
CAMPOSOL S.A.
SOCIEDAD AGRICOLA VIRU S.A.
ALICORP S.A.
DANPER TRUJILLO S.A.C.
GLORIA S A
SOCIEDAD AGRICOLA DROKASA S.A.
COMPLEJO AGROINDUSTRIAL BETA S.A.
GANDULES INC SAC
EL PEDREGAL S.A
AGROINDUSTRIAS AIB S.A.
FOB VALUE (USD)
105 million
84 million
83 million
56 million
51 million
40 million
38 million
38 million
30 million
30 million
COMPANY
FOB VALUE (USD)
CORPORACION REFRIGERADOS INY SA
34 million
SEAFROST S.A.C.
24 million
PACIFIC FREEZING COMPANY E.I.R.L.
20 million
PESQUERA HAYDUK S.A.
19 million
AUSTRAL GROUP S.A.A
17 million
INDUSTRIAL PESQUERA SANTA MONICA S.A. 13 million
INVERSIONES PRISCO S.A.C.
13 million
TECNOLOGICA DE ALIMENTOS S.A. (TASA) 12 million
C N C
11 million
CORP DE INGENIERIA DE REFRIGERACION SRL 11 million
Source: ADEX
*Excludes traditional products such as coffee, corn, rice, potato,
cotton, sugar.
Source: ADEX
*Generally refers to fish products for
direct human consumption