Peru: Camposol upbeat for Ica's ag future with Cilloniz at the helm
Leading Peruvian produce multinational Camposol may not have a huge vested interest in the southern department of Ica, but one company representative is optimistic about the fact produce industry consultant Fernando Cilloniz is now leading the region's government.
Camposol, which has grown asparagus, avocado and table grape production significantly in recent years - along with a fresh push into seafood as part of a broader, health-focused Camposol Foods concept - plans to make the most of new irrigation projects in the pipeline.
However, one area where new water projects are lacking is Ica, where Camposol holds land but isn't producing anything.
"I think the appointment of Fernando is very good for the Ica region. Firstly, he understands agriculture, he comes from a family that understands agriculture; secondly, he's a numbers guy and he's very practical," says Camposol chief commercial offier Jose Antonio Gomez.
"From the beginning he understood that the main challenge in the Ica region is water - it requires big investment to solve that issue and he is working on it.
"If in his term he just solves that one problem, it will be a huge turnaround for the Ica region."
He emphasizes again just how important Inform@ccion president Cilloniz's practicality will be when it comes to solving irrigation challenges.
"There are a lot of people who have no idea about how agriculture or water work - some people promote channeling the water, but sometimes if you do that it can deplete the water that is underneath and that's the real water that is serving agriculture because everybody gets water from wells," he says.
"What's even more important is the underground water going down, as there's a balance between the fresh water and the salty ocean water.
"The point there is that it really takes a person who is facts driven and curious to understand the nature of the problem to really deliver the solution."
He says Camposol will be able to use its land better in the region if Cilloniz helps improve the irrigation infrastructure.
"Why we don't use the land is that the water level is minimal and we can't get the scale we require for an operation. Our business is based on scale, so if we’re going to put a farm in the south, we need that farm to at least by 500 hectares."
The executive highlights there are around 200,000 new hectares of land that could come into production for the Peruvian industry by 2020, as the result of a range of irrigation initiatives.
"You have Olmos which is around 40,000 hectares, and you have the Chavimochic Third Phase project which is where Camposol is in Trujillo, with the Second and Third Phases developed; now they are building a dam to hold water from the river.
"In the high rain season we get a lot of water that just gets wasted into the ocean, so by holding the water that project will be able to expand by 50,000 hectares.
"You have the third project that is south in Arequipa called Maje Siguas which adding another 30,000 plus hectares, there are a couple of projects in Piura to increase the capacity of the reservoir and also to expand the agricultural frontier, and there is Chinecas that is south of Chavimochic."
A re-focus on the foods segment for Camposol
It has been more than three years since Camposol announced its intention to become a true multinational produce company, expanding out from Peru to broader horizons. Now, the firm is taking another step in its corporate direction as a 'foods' brand.
"We can talk about Camposol Foods as a concept, bringing to the consumer food that is healthy and that is natural. Fruits and vegetables are on the right track for that, and marine products too, especially marine products that have been a renovation of the resource and not a destruction of it," he says.
"We have a very intense shrimp farming operation and fresh water fish harvesting operation, so we have been acquiring some companies in the fish and shrimp farming businesses - we do believe that protein from farming is the future and not capturing from the open ocean."
He says the company's fresh and conserved horticultural products can be combined with its seafood products as part of a broader offering to retailers and wholesalers.
"Now we are taking a step forward and we are also talking to consumers. Our offering is fresh, healthy and all the products that we picked for our portfolio are either considered as superfoods or close to being superfoods.
"For example, we have blueberries with their antioxidants, avocados with super oils that reduce cholesterol, pomegranates with antioxidants and asparagus which also has good oils.
"These products are growing very fast in consumption because the consumer is aware that they’re very healthy."
On the blueberry front, Camposol decided in 2014 to pump US$100 million into expanding its blueberry operations, backed by funds from a share sale in Copeinca to China Fishery Group.
Gomez says the blueberry investment initiative is all going to plan, with 500 new hectares of land set to enter production in August.
"We started the business with 50 hectares but then we added 150 hectares, so pretty much the 2014-15 season is being supplied by those 200 hectares," he says, clarifying that the season runs from August to April.
"But last year we added another 500 hectares, so right now we have 700 hectares. That incremental of 500 hectares is going to have new production starting in August this year."
He says Peru's natural conditions mean that blueberry trees can bear fruit in just 12 months, whereas in other parts of the world it can take years.
"As we say, everything grows faster in Peru, and bigger. Avocados can produce in the third year, grapes produce in 12 months and blueberries produce in 12 months. It's from stable weather and the fact we don't have a pronounced winter, as 16°C (60.8°F) is the coldest we get.
"Normally when you have a strong winter that basically stops the growth of the plant, and the growth returns when spring hits. That takes a while because first the plant needs to regain the leaves, and then start regaining energy and the growth comes.
"In our case the plant never stops growing, and they never lose the leaves unless you prune it. So it’s a continuous process. We basically cut the growing time in half."
He says with the higher volume, and increased consumer knowledge about blueberries, Camposol aims to help make the fruit more mainstream.
"Blueberries used to be related to champagne and chocolate, like a boutique type of product that certain people can buy, but now we believe that the strong component of healthiness that blueberries carry makes the decision-makers in the household choose to put the product into lunch boxes.
"On the upper side of the consumption, people above 70-years-old are heavy consumers of blueberries because they believe it extends the lifecycle because of the antioxidants.
He says Camposol's blueberries are sold in the U.S., Europe and Asia.
Gomez says other aspects where the business is developing relate to how it trades and sources fruits and vegetables.
"On the restructuring of the company we have created a company called Camposol Trading, which is mostly our production managed by our offices, plus what we can bring from other sources to try to have a year-round offer mainly to retailers.
"So far these offices are handling half of the total Camposol offer, and right now I will say that 30% of what Camposol sells as a company is coming from integrated farmers that have integrated into the supply chain.
"Most of the time what we do is we offer finance, seeds, best practices, quality. The farmer can integrate his land and labor into our network to get scale, and in the end get a better return for his investment. It’s better for everyone."