28 million dollar investment

Dole builds a plant for tubers and vegetables in Colombia

Dole, the American multinational, expands its business in Colombia. Besides having banana production in Santa Marta, it is installing a plant in the Sabana de Bogotá to wash, cut and pack IV range vegetables and tubers, i.e. products that are ready to be prepared and consumed. 

The development of the project, which has been going on for two years, involves an investment of $28 million dollars and the installation of a 8,000 square meter plant in the town of Madrid, Cundinamarca. 

"The goal is to ensure that all of the process of our harvest, the water, the days of grace (the time between the use of fungicides and when the consumer gets the product), fertilizers and seeds, comply with all the requirements to get to the plant," said Julio Cesar Cañon, manager of Dole Vegetables Colombia. 

The vegetables that the company will work with include lettuce, spinach, celery, broccoli, cauliflower, kale, cabbage, a variety of gourmet leaves and white onions. In turn, the tubers that the company will work with include the R12 potato variety, as well as the Creole potato, cassava, pumpkin and celeriac. 

"The product's shelf life is very important for us. We want our vegetables to have six to eight days and our tubers to have 10 to 12 days shelf life. We can achieve this with processes and a cold chain between 0 and 4 degrees, said Cañon. 

The plant will have a capacity of producing 50 tons of tubers and vegetables a day, but the operation will start at 30 percent of its capacity. 

Cañon said the plant was originally designed for vegetables because the experience in Chile and the United States showed that the business was moving in that segment.

However, the studies in Colombia showed that tubers were a better business than vegetables, so the company had to rethink its business and the characteristics of the plant and include a steam peeling line. 

"It's an important work so that the people in Colombia can trust in the vegetables they consume and these products gain share in the plate." 

The plant's capacity is big enough for the company to think about exporting its products to Central and South America, where there is no infrastructure of this type installed. Currently, Dole has production facilities of its kind in Chile, Argentina and Peru. 

Estimates are that the company will start sales abroad in a year, after Dole Vegetables strengthens its business knowledge in the country. 

Due to the products' characteristics, the marketing channels will be the big chain stores and casinos that cater in remote areas to companies in the oil and mining sector. 

According to Cañon, the products' prices will be 20 percent higher than the traditional products because of their quality and traceability. 

"The fertile land and water wealth of the Sabana de Bogotá were essential for the multinational to decide to open this new business," he said. 

So far, the company has managed purchase agreements with 12 to 15 producers located in Madrid, Funza, Mosquera and Facatativá, chosen for their clean production and because they have GAP certifications. 

In addition to the agreements with suppliers, the company's business plans include producing their own raw materials. The plant that Dole is building is in an area of 154 hectares, 145 of which can be exploited in the future to grow food that can be marketed. Dole Vegetables Colombia will create 150 direct jobs in the region and an estimated 300 new indirect jobs.

Fruits and cooked foods, the next step 
The company plans to expand its business beyond this plant. According to market studies, supplying fourth range fruits, i.e. peeled, cut and vacuum packed, is a viable business.
 
"Our offer might include products such as pineapple, melon and papaya," said Cañon. "In less than a year," the executive said, "the company will move into a line that produces fifth range tubers. This means that the food will arrive cooked and vacuum packed to the final consumer." 

"The overall trend is for people to eat well and healthily. Colombia has a good deal of vegetable products, but their consumption should be more dynamic," he stated. 

Regarding the company's marketing plans, Dole expects to ensure its presence in the big business and institutional channels. 

Estimates are that these two distribution channels move 80 percent of the market for fresh and processed vegetables. 

Dole will invest approximately USD $500,000 in Refrigerators and a communication campaign to promote the brand.



Source: portafolio.co

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