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Peru’s Fruchincha looking to become a bigger player in export deals

by Tad Thompson | July 25, 2011

Corporación Frutícola de Chincha, operating as Fruchincha, is relatively new to the Peruvian citrus export business, but there are big players involved in the cooperative, and it will rapidly become a much larger player, according to Francisco Camino, general manager.

Fruchincha was founded a decade ago in Chincha, Peru, and currently has 13 shareholders. For the members, Fruchincha manages more than 3,000 acres of avocados, grapes and citrus. Among the 1,250 acres of citrus, the main varieties are Satsuma and Nova, but the members are increasing acreage and diversifying varieties. The cooperative manages 730 acres of grapes and 1,330 acres of avocados.

Mr. Camino joined Fruchincha three years ago as the chief financial officer and became general manager a year ago. Prior to that, he had his own pepper and artichoke firm in Peru.

“The shareholders of this company are really big guys,” Mr. Camino said. “We want to increase areas in different departments of Peru. Fruchincha’s production started in Chincha. The production of Red Globe and Flame grapes was expanded to Ica, 280 miles south of Lima. Now there is Fruchincha citrus and avocado production in Nazca, Peru. Nazca, which is 250 miles south of Lima, is famous for the Nazca Lines, a series of ancient geoglyphs — lines of huge art forms on the ground — in the Nazca Desert.

A well-known Fruchincha shareholder is Univeg, which is headquartered in Sint-Katelijne-Waver, Belgium. The global produce company “is involved really by default” because Univeg bought a French firm in 2006 that was a Fruchincha shareholder. Univeg owns 15 percent of Fruchincha, “and they want to continue to increase their participation in the company,” Mr. Camino said. Univeg is the only shareholder that does not own land in Peru.

Univeg owns Seald Sweet International, located in Vero Beach, FL, which is a Fruchincha client, and “we will have all the members of the Univeg group as part of our clients but not our only client. We try to send more fruit for them, but the prices and programs have to be correct for our growers.”

Mr. Camino said that Univeg “wanted to increase its volume for the Southern Hemisphere, so it’s interesting to have their participation in Peru.”

Fruchincha exports Satsumas mostly to the European market. The Dutch market has been the focus, but next year more Satsumas will go to the United Kingdom “because it is the best market for Satsumas,” Mr. Camino said. Canadians are another buyer of Fruchincha Satsumas. Market results in Holland this year “are not good.”

Fruchincha’s citrus volume is increasing quickly “because our trees are maturing. Last year we shipped 65 containers. This year it will be around 120 and next year around 150.”

In 2011, Fruchincha’s total citrus exports are expected to total about 200 containers, counting volume from independent growers. Fruchincha serves as a packer for these and other growers for which “we only prepare their fruit for export.”

In 2010, Fruchincha’s packinghouse packed 299 containers. This year the number will be about 640 containers of citrus.

Currently, Fruchincha’s production “is not so big but maybe in the future three years we should be the third-largest exporters of citrus in Peru.”

Fruchincha members plan to plant an additional 1,250 acres of citrus as part of a five-year program, which breaks down to be a consistent growth rate of 250 acres per year.

“Right now we are analyzing the new varieties,” Mr. Camino said.

Fruchincha growers are also grafting W. Murcott production wood upon existing rootstocks to change varietal offerings to more quickly match market demands. Mr. Camino said that Peruvian growers sometimes tend to “copy what their neighbors did.” Thus, the country currently has a lot of Minneolas, Satsumas, Novas and Clemenules.

“We are starting a program of different citrus to be planted to have a window of six months of exports of different varieties so our customers can see us as an exporter or packinghouse that can afford them different varieties of citrus in the widest window possible. That is also the reason to increase our area in Nazca. It has different weather, so we can get them later or earlier and this is good,” he said.

The increased varieties will likely be W. Murcotts and Clemenules. “Now we are doing some trials in oranges and maybe Star Ruby [grapefruit] and blood oranges. We want to analyze the quality and volume that can be expected before we plant a large area,” Mr. Camino said.

The company is focused on having a consistent supply of fruit to export. It is not expected to have big earnings in the short run, Mr. Camino said, “because the earnings are being transferred to the land. For many years, there were some problems to consolidate because everybody wanted to harvest in the same day, which made the packinghouse a problem.” Cooperation has greatly improved, and “now it is working really well.”