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Argentina: Mendoza to become leading producer of pre-fried potatoes

Mendoza could become the leading producer of pre-fried potatoes for consumption in South America, as it will contribute more than 50% of the product and increase its exports by 5%, thanks to a very significant investment. This should begin to yield results within 18 months. As announced more than two months ago, JR Simplot will invest around 132 million dollars (i.e some $2,000 million pesos) in Mendoza to produce frozen pre-fried potatoes and flaked mashed potatoes.

The US multinational, in partnership with Fabio Calcaterra, a cousin of President Mauricio Macri, are both owners and shareholders of San Fili SA and have already selected and purchased the land where they will build a 400,000 square-meter plant to process about 140 tons of potatoes a year. The plant will be located in Lujan de Cuyo, on Route 7, near the Distillery and it will generate 400 direct jobs and 2,000 indirect ones.

"The most complex thing was to find an area that had logistical conveniences, electricity, gas and water. Mendoza has had serious energy and water issues because of the lack of public and private investment," said the Minister of Economy, Infrastructure and Energy, Enrique Vaquie. He has been heavily involved in making it possible for Simplot to acquire the land in Mendoza. According to estimates, the company could officially announce the start of production in less than 60 days. 

"The changes needed in the productive matrix sometimes come from where you least expect them.There will be so many exports that, once the plant is operational, it will become the leading or second biggest exporter," the official added, as Simplot is McDonalds' leading supplier of potatoes worldwide. When Calcaterra announced the investment (which originally was going to be of some $1,500 million pesos), he said that 70% of the potatoes they expected to export would be sent to the main markets of Mercosur, especially to Brazil, to replace imports from Europe.

Once the plant is working at full capacity, Mendoza would become a leader in pre-fried potato production at the South American level, accounting for more than 50% of production. Pre-fried potatoes would then become Mendoza's third most important export product, after wine and fruit juices.

"We are working so that most of the labor is local," added Vaquie, who also stressed that the multinational company was going to make an important investment to acquire more land for planting.

Part of the investment that the company will make in Mendoza will be used to increase the crops in San Carlos, from 450 hectares to 1,200 hectares, and to install cold storage facilities for some 11,000 tons of raw material.

According to estimates from the Ministry of Economy, supplying the plant requires a 30% increase in vegetable production in Mendoza and some 40 new producers. 

According to the IDR, vegetable cultivation increased by 8% in the last year, fueled mainly by the 11% increase in garlic crops. Potato is the second most widely grown crop.


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