TRADE AND MARKET I NG Processing industry should open up the potato sector of Argentina yield further, to lower the cost price, and to be more competitive in the home market, thus providing our buyers with a better negotiating position in the international French-fry market’, the enthusiastic grower explains. In addition, he also cultivates 800 hectares of oats for Quaker under the Rainforest certificate and 200 hectares of sunflowers for Pepsico’s cooking oil. Interesting market One of the largest Argentinian producers of chips is the Dutch company Farm Frites. In the middle of a residential area in one of the suburbs of Buenos Aires, the company produces 70,000 tons of chips annually. This, of course, involves a great deal of lorry traffic and high emission levels. What’s your view on that? ´When the factory opened its doors in 1986, there wasn’t a house anywhere near this location´, Federico Peralta Ramos, Operational Director of Farm Frites Argentina explains. After a period of uncertainty due to local mismanagement, the Argentinian factory is again fully operational today. ´We’ve shaken up the business thoroughly with our new local partner Ignacio Noëll, and we’re ready to face the competition again’, Jochem Rovers explains. Within Farm Frites, he’s responsible for the supply of basic materials for all the foreign branches. ‘We have a good market potential’, Peralta Ramos adds. ‘The total South American market for chips is currently 500,000 tons. The biggest market is Brazil, where over 200 million people each eat 1.3 kilos of chips every year. All 42 million people in Argentina eat around 1.2 kilos per person’, the director calculates. The supply to our neighbouring country is not such an easy matter. ‘The transport from Argentina to Brazil is more expensive than the transport from Rotterdam (NL) to Santos, the port of São Paulo. To transport a 7-metre container by boat costs 600 euros and our transport by lorry costs around 4,500 dollars (approx. 4100 euros) per container. The best way for us to stay ahead is through our fast delivery. It takes four days by lorry and three weeks by boat to reach our destination. Due to the low European potato prices, we could hardly compete last year. Because the potato prices in Argentina are lower this year and in Europe they’re higher, export can now be more lucrative. What the effect will be of the study on dumping by European companies on the Brazilian market, is now still difficult to predict. Because we export 70 percent of our yield to Brazil, it’s clear that this country is the driving force of our company. If it’s more difficult for our competitors to export, we’ll naturally have more opportunities’, the Farm Frites Director explains. From local cultivation to commodity ‘Potato production is a local activity. You’ll have more marketing opportunities if you do better than your neighbour. However, once you’re handling deep-frozen chips, you’re talking about a commodity and you’re part of the worldwide market’, Rovers explains. To supply this market, Farm Frites has concluded contracts with some 15 growers in the SEBA region. ‘In the coming years, we want to reduce this number to eight professional companies that want to invest in the cultivation and storage of potatoes in order to be able to supply throughout the year. At present, we still need to buy potatoes from November to January in areas further afield such as Cordoba and Tucomán. The right varieties are often not available here and we regularly have to use Spuntas for chips. As soon as we can use potatoes from the SEBA regions throughout the year, we can move our factory to this area’, Peralta Ramos explains. McCain, too, already has a location in the town of Balcarce, the heart of the SEBA potato area. Take to a higher level Both Rovers and Peralta Ramos emphasise that knowledge development is very important in Argentina. In addition to the SEBA area being able to supply allyear-round, it’s important that the cost price of consumption potatoes drops. In order to achieve this, yields must go up while costs must go down. ‘I see the cultivation of potatoes modernising in the coming five years. Argentina is already the best in the area of cereals, but as far as potatoes are concerned, activities are still in their infancy’, Peralta Ramos tells us. He says that the biggest difference between the Netherlands and Argentina is access to technology. In addition, he praises the mindset of the Dutch growers. ‘In Argentina, the entrepreneur is a different person from the man who’s doing the work in the field. As a result, field knowledge in Argentina is at a lower level than in the Netherlands where the entrepreneur is also the person on the tractor. Here in Argentina, the owner is usually not the tractor driver. The big entrepreneurs here not only grow potatoes, they also grow cotton, soy beans and cereals all of which need less knowledge than you need for potatoes’, Peralta Ramos explains. And this is why Farm Frites definitely wants to continue with projects such as the ones GITAHpapa and K2K have started, in order to take the cultivation to a higher level. ● Some of the growers have invested in rapid multiplication themselves, others buy the mini tubers. Jaap Delleman Potato World 2016 • number 4 23 Pagina 22
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