Peru FoodNews 2010 - GBR

8 A Global Business Reports publication A Global Business Reports publication
9
Juan Varilias, President of Peru’s Exporters Association (ADEX),
gives his views on the Peruvian food sector.
GBR: Mr Varilias, could you
give us some background
information about ADEX?
JV: ADEX has a history of 36
years in Peru’s institutional
life as an organisation that
represents the country’s
exporters. In recent years we
have worked very closely with
the public bodies promoting
entrepreneurship aiming at
the export markets.
We are always consulted
by the government in matters
related to industries’ export
activities. For instance,
we have participated very
actively in the negotiations of
Peru’s free-trade agreements
with different countries.
We have 24 committees
that cover activities such as
timber, fisheries, mining,
food, jewelry and many
others. We try to eliminate
barriers for Peru’s exports,
such as unfair exchange rates
or phytosanitary barriers.
GBR: The association is involved in numerous education
schemes. Could you give us some details?
JV: We have a vision that exports are the main growth driver of
the country’s economy.
For that reason, we strongly believe in education and have
a number of agreements with universities for degrees in
international trade. We want to spread an exporting culture all
around the country. ADEX intends to open regional offices in
the medium term. We want to help exporters all around the
country improve their quality and processes so that they can
benefit from the latest technologies and meet the world markets’
requirements. We are consistently supporting innovative
projects.
GBR: Where do you see the main advantages of Peru as a
global food supplier?
JV: Peru today enjoys a privileged situation as the link between
Latin America and the rest of the world thanks to its geographic
location and its FTAs. Through Peru, other Latin American
countries such as Ecuador, Bolivia and Brazil can reach a market
of 2 billion people, including China, the European Union and
the U.S.
Peru has great biodiversity with a large number of ecosystems
suitable for agricultural production, in numerous cases all year
long. These are found along the coast, in the Andes and the
jungle, as well as in a very rich sea. We have two of the richest
marine ecosystems in the world.
All of these conditions also make us an attractive country for
foreign investment. Indeed, companies from Colombia, Brazil,
Ecuador and other countries are already setting up their shops in
Peru in order to have an open door for the export markets.
GBR: Peru is the world’s
largest producer of fishmeal,
yet there is an increasing trend
to dedicate the country’s rich
resources for direct human
consumption. How can a
balance be reached between
the two industries?
JV: The fishing industry can
serve both the fishmeal and
the direct human consumption
markets. The fishmeal, which
absorbs most of the anchovy
resources, is very profitable but
not everything in a business is
just about the profits. Today,
businesses have increasing
social awareness and Peru’s
fish offers great opportunities
to feed the hungry. Moreover,
the country presents
exceptional conditions for
aquiculture.
GBR: What role can
technology play in increasing
efficiency in the food
industry?
J V : E x p o r t i n g - r e l a t e d
industries are big employers in Peru. Growing demand for
food worldwide will boost the country’s economy and push
down unemployment. The introduction of technology should
not really be seen as a method to decrease labor costs, because
large machines cannot be used in many of the country’s
agricultural areas. The latest technologies need to be seen as a
way of improving the quality and increasing competitiveness.
Notwithstanding the technologies introduced, there is always
going to be a shortage of hand labor because the country has
enormous possibilities for growth.
GBR: What is the potential for Peru’s strong growth in
organic products?
JV: Peru offers great opportunities for organic production.
Indeed, organic products are seeing their demand increase by
more than 10% annually. The country currently has 309 000
organic-certified hectares in production. We are the world’s
largest exporter of organic coffee and organic bananas. In
Expoalimentaria we will have a section called Peru Natura,
reflecting the importance that the organic market has for Peru.
GBR: Do you have a message for the readers of
FoodNews?
JV: Peruvian exports have greatly improved the country’s
position in foreign reserves in the last 5-6 years. ADEX has
been doing a great job promoting entrepreneurship. Peruvian
exporters have the latest technologies and can compete with
anyone in the world. It has been a great effort from all of the
companies and we are going to continue moving in the same
direction. By 2011 we should be very close to Chile’s figures in
non-traditional agro exports.
A BLESSED LOCATION FOR
AGRICULTURE
Peru has excellent conditions for the development of
agriculture and its related industries. From fresh to
processed vegetables and fruits, the sector is booming.
Beatriz Tubino, Manager of Agro-exports at ADEX, summarises
the unique advantages of Peru’s agro sector: “Due to its location
close to the equator, Peru receives intense solar radiation, which
results in products with great colour and flavour. The coast is a
natural greenhouse, without extreme temperatures or rains, so that
the country has long harvesting seasons. This is a mega-diverse
country, containing 84 of the 117 ecosystems existing in the world.
Finally, because of its strategic geographic location, Peru is a
regional logistics hub”.
Considering all of these factors, it is of no surprise that, in spite of
hiccups caused by the global crisis, the industry has been developing
steadily over the last years and that the value of agro exports has
increased by an average of 16.5% annually in the period between
2005 (when they amounted to USD 1.33 billion) and 2009 (USD
2.46 billion), according to ADEX data.
The asparagus example
The asparagus has been the foundation on which Peruvian
non-traditional agriculture has based its tremendous success.
Interestingly enough, asparagus is not originally a product from
Peru, yet Peruvians have invested and mastered this crop to become
the world’s largest exporters, in fresh, canned, jarred and frozen
formats.
2009 was not an easy year for asparagus, as the value of exports
decreased by 11% to USD 389 million FOB. With China (the world’s
largest producer, but not yet the largest exporter) to compete with,
how can Peru increase its asparagus exports? “The huge number
of small, unconsolidated Chinese producers creates a lot of price
volatility. Farmers focus on asparagus when prices are good but, if
a Chinese or a Peruvian farmer is pressed against the wall by low
prices, they will grow something else so that prices will improve
again. Prices seem to go in two-year cycles and we’re coming out
of a very deep valley at the moment”, maintains Jorge Arangurí,
Director of Sales and Marketing at Danper.
Ulises Quevedo, General Manager of Tal S.A. and Avo Peru,
producers of asparagus and avocado respectively, muses: “It is very
difficult to predict what is going to happen, because China is such
a big country and the information available is not very reliable.
What we have done during this period of crisis is to renew 30%
of the fields with alternative crops, and now we will replant these
areas with asparagus. This way we will have the same production
volumes that we had before the crisis, and with renewed fields”.
Looking for new products
For large players, avocados and table grapes (as well as other fruits
such as mango) seem to be good alternatives for growth rather than
planting more asparagus. Investments in these are popular at the
moment. But Peru offers many other possibilities. For instance,
Agroindustrias Josymar, a medium-sized producer in Trujillo, has
found a niche producing leek conserves: “We are the only company
processing leek in Peru. While asparagus is seen as the conserve
of the rich, leek is the conserve of the poor; but it is profitable
if you have the right volumes. We currently sell this product in
Spain and France”, relates Eduardo Zavaleta, General Manager