As part of its expansion plan to meet growing international demand, the Chilean production company Hortifruit SA, which is based in Santiago, is about to finalize the purchase of Peru's largest blueberry producer.
In October last year, the company announced its intention to pay US $160 million for the national Grupo Rocio's blueberry business.
With this operation, Hortifruit includes Peru in its expansion plans, which already include Mexico, the United States, and China. This will allow it to more than double their berry production, including blueberries, achieving more than 100 million kilos (220 million pounds) this season, said Victor Moller, president of the company. The company will continue purchasing other businesses.
"People laugh at me because I still think that the company is in its infancy," Moller said of the 38-year-old company that went public in 2012. "But it's a baby with an enormous growth potential."
So far investors are happy, considering that Hortifrut increased by more than 500% from the IPO, compared to a 29% rise in Chile's IPSA reference index in the same period. Revenues have more than doubled, reaching US $ 367 million since before the IPO, although they dropped by 9% in 2017, according to data collected by Bloomberg.
Passion for berries
Blueberries have become a product that consumers want 24 hours a day, every day of the year, said Roland Fumasil, a senior fruit and vegetable analyst at Rabobank in Fresno, California, a city located in the powerful Central Valley agricultural center.
Last year world production amounted to approximately 1.7 million tons of blueberries, two and a half times the amount achieved in 2000, according to the consultancy fresh4cast.com. The figure should reach 2 million tons in two years. The United States is the largest producer of blueberries, followed by Canada, and Chile, which is the world's largest exporter.
"The demand isn't really elastic," Fumasil said. "People want to have their blueberries."
And the Chinese are willing to pay for them
In January and February, during the peak of the Chilean harvest, the blueberries exported to the port of Jiangnan in China were sold at an average of US $ 10.04 per kilo, according to data from the agricultural consulting firm iQonsulting. On the east coast of the US, the average price is US $6.40 per kilo.
With so much demand, Hortifrut has more acquisitions in sight, said Moller.
"We are trying to defend our leadership position in the world," Moller said. "Part of our business model is growing by partnering with leading companies in either production distribution, genetic engineering, processing or logistics."
Source: Bloomberg