FACTORY FOLDER ELCAFE C. A. 2nd July, 2014
OUR COMPANY • ELCAFE, an Ecuadorian soluble coffee manufacturer founded in 1978 started its operations with spray dried and agglomerated coffee. • Ultramares Corporation its sister company is a leading green coffee trader in business for more than 80 years. • Our company guarantees 1.250 full time jobs in its two factories and indirect employment of 800 people through contractors and service providers.
OUR COMPANY • ELCAFE is the soluble coffee leader in Ecuador with about 35% market share with its brands Pres2 and SiCafe. • Our company is ISO-9001:2008 certified and benefits from an internally developed quality system, which focuses on Good Manufacturing Practices, HACCP and Environmental Health and Safety. • Our company is committed to fulfill all the standards established by National Legislations concerning water discharge, gas emissions, air control, noise reduction, and solid waste, in order to protect the ecosystem. This initiative reflects the company's commitment with the environment and the community.
OUR COMPANY • In 1.998 (twenty years later) ELCAFE starts the freeze drying operation focusing on the commercial growth of this product over the past 14 years due to: 1. Small and declining green coffee production in Ecuador makes it strategic to add more value to an imported raw material in order to sustain commercial and technical growth: Emulate Northern European leading freeze drying industry by producing not only Ecuadorian coffee, but Ecuadorian technological and industrial “know how”. 2. Better cater to the coffee needs of the European Union and Russia, our main customers that are mainly freeze dried soluble coffee consumers.
OUR COMPANY • ELCAFE has a total annual installed capacity of 29,000 Metric Tons in both plants located in Guayaquil and Montecristi. • Our company currently demands around 1.25 million 60 kg – green coffee bags to process it into added value soluble coffee mainly freeze that is mostly exported to Russia and European Union. ELCAFE has achieved over the last 20 years a sustainable business with a technological, commercial and social growth.
MISSION
• Consolidate customer and consumer preference by offering an optimum instant coffee to achieve continuity and fidelity overtime. • Promote a safe and harmonious work environment and contribute thru continuous training to the professional and personal development of all our employees (Promoting inhouse talent). • Achieve profitability and sustainable growth to encourage our shareholders in reinvesting in more capacity and technology to improve efficiency and productivity.
COMPANY VISION 1. Add value through Freeze Drying, due to the shortage of green coffee in Ecuador; emulate Northern European leading freeze drying Industry in developing and exporting soluble know-how. 2. Deliver Price, Quality and Innovation at the right time to our strategic customers. 3. Cater to European Private Labels, as well as global soluble brand owners with limited instant coffee capacity.
COMPANY VISION
4. Promote a continuous process for monitoring and reevaluating costs of production of efficient green coffee farmers as well as the development of a mindset and culture of “self-sustainability� in Ecuador, benchmarking with Brazil (Espiritu Santo) and Vietnam. Freeze dry self sustainable green coffee as a social and commercial differentiator a new flavor to ELCAFE instant products.
CORPORATE VALUES Our integrated quality program focuses on the organization and its human resources, the satisfaction of our wide range of customers and the profitability and the capacity of reinvesting of our shareholders by means of: 1.- The use of high technology to achieve high levels of productivity. 2.- Our commitment with clients to process added value products differentiated by quality, innovation, service orientation and technical support.
CORPORATE VALUES 3.-Our commitment with internal growth and high business profitability to satisfy the shareholders. 4.-The continuous training of our employees, substantially contributing to their professional and personal development, ensuring their families wealth. 5.- Our commitment with Environment Protection. 6.- Our continuous support to coffee producers as part of the company’s social responsibility.
ELCAFE GREEN COFFEE DEMAND 2006-2013 GREEN COFFE YEAR
SOLUBLE COFFEE EXPORTS TM
SCS 60 KILOS
US$
INTERNATION SCS 60 KILOS
US$ totales
LOCALES
% NET EXPORT
SCS 60 KILOS
US$
%
$ 26.254.662 $ 36.200.475 $ 52.102.686 $ 46.658.857 $ 41.019.389 $ 46.120.344 $ 49.085.301 $ 61.099.336
57% 51% 61% 56% 43% 35% 29% 33%
SCS 60 KILOS 511.138 533.700 576.978 559.632 715.352 759.231 1.002.820 959.270
37%
1.071.529
PURCHASE
2006 2007 2008 2009 2010 2011 2012 2013
10.343 13.129 13.618 13.356 15.967 18.973 21.651 21.671
448.197 568.923 590.113 578.756 691.925 853.771 974.295 955.237
$ 46.098.844 $ 70.999.166 $ 85.226.462 $ 83.968.405 $ 95.722.657 $ 131.665.791 $ 169.668.384 $ 183.808.212
390.747 410.286 447.171 488.085 609.762 635.101 936.372 911.385
$ 19.844.182 $ 34.798.691 $ 33.123.776 $ 37.309.548 $ 54.703.268 $ 85.545.447 $ 120.583.083 $ 122.708.876
120.391 123.414 129.807 71.547 105.590 124.130 66.448 47.885
2014 PROYEC.
24.676
1.071.529
$ 194.000.000
971.529
$ 121.829.737
100.000
Source : Empresa de Manifiestos, reportes internos 01-may-14
TOTAL
NET EXPORT
$ 72.170.263
% LOCAL PURCHASE PURCHASE % 24% 23% 22% 13% 15% 16% 7% 5% 9%
SOLUBLE COFFEE EXPORTS 2013 Ecuadorian Soluble Coffee Exports by country 2013 in Kg. Jan - Dic 13
ELCAFE
%
SICA
%
GUSNOBE
%
OTROS
%
TOTAL
%
Europa
20,890,587
97%
310,000
30%
1,282,450
66%
30,817
18%
22,513,854
91%
ALEMANIA
5,753,575
27%
0
0%
30,000
0%
0
0%
5,783,575
27%
POLONIA
8,222,562
38%
0
0%
0
0%
0
0%
8,222,562
38%
INGLATERRA
773,400
4%
46,500
0%
1,192,450
6%
0
0%
2,012,350
9%
HOLANDA
605,925
3%
93,000
0%
45,000
0%
0
0%
743,925
3%
FRANCIA
0
0%
31,000
0%
0
0%
15,000
0%
46,000
0%
FINLANDIA
210,000
1%
0
0%
0
0%
0
0%
210,000
1%
ITALIA
20,075
0%
15,500
0%
0
0%
0
0%
35,575
0%
ESPAÑA
0
0%
31,000
0%
0
0%
0
0%
31,000
0%
GRECIA
0
0%
0
0%
0
0%
0
0%
0
0%
BELGICA
56,100
0%
15,500
0%
0
0%
0
0%
71,600
0%
RUSIA
4,717,425
22%
0
0%
0
0%
15,000
0%
4,732,425
22%
TURQUIA
471,525
2%
77,500
0%
0
0%
0
0%
549,025
3%
REP.CHECA
0
0%
0
0%
0
0%
817
0%
817
0%
UCRANIA
60,000
0%
0
0%
0
0%
0
0%
60,000
0%
GEORGIA
0
0%
0
0%
15,000
0%
0
0%
15,000
0%
LATVIA
0
0%
0
0%
0
0%
0
0%
0
0%
America
303,475
1%
235,952
23%
508,875
26%
83,732
50%
1,132,034
5%
PERU
400
0%
229,452
1%
0
0%
8,820
0%
238,672
1%
MEXICO
165,000
1%
0
0%
360,000
2%
0
0%
525,000
2%
ESTADOS UNIDOS
125,550
1%
0
0%
105,000
0%
72,488
0%
303,038
1%
CANADA
0
0%
0
0%
0
0%
0
0%
0
0%
CHILE
0
0%
0
0%
0
0%
2,424
0%
2,424
0%
COLOMBIA
12,525
0%
0
0%
43,875
0%
0
0%
56,400
0%
CUBA
0
0%
0
0%
0
0%
0
0%
0
0%
REP.DOMINICANA
0
0%
6,500
0%
0
0%
0
0%
6,500
0%
PANAMA
0
0%
0
0%
0
0%
0
0%
0
0%
Asia
353,808
2%
474,025
46%
153,600
8%
54,000
32%
1,035,433
4%
JAPON
154,233
1%
388,775
2%
0
0%
0
0%
543,008
3%
TAIWAN
0
0%
52,750
0%
0
0%
0
0%
52,750
0%
SIRIA
120,000
1%
0
0%
75,000
0%
0
0%
195,000
1%
INDONESIA
0
0%
0
0%
0
0%
0
0%
0
0%
SINGAPORE
0
0%
0
0%
0
0%
0
0%
0
0%
MALASIA
15,000
0%
0
0%
0
0%
0
0%
15,000
0%
CHINA
13,050
0%
0
0%
0
0%
0
0%
13,050
0%
HONG KONG
0
0%
0
0%
0
0%
0
0%
0
0%
VIETNAM
0
0%
0
0%
0
0%
54,000
0%
54,000
0%
EMIRATOS ARABES
0
0%
0
0%
48,600
0%
0
0%
48,600
0%
COREA DEL SUR
51,525
0%
32,500
0%
0
0%
0
0%
84,025
0%
LIBANO
0
0%
0
0%
30,000
0%
0
0%
30,000
0%
IRAN
0
0%
0
0%
0
0%
0
0%
0
0%
Africa
13,050
0%
0
0%
0
0%
0
0%
13,050
0%
EGIPTO
13,050
0%
0
0%
0
0%
0
0%
13,050
0%
Total
21,560,920
87%
1,019,977
4%
1,944,925
8%
168,549
1%
24,694,371
100%
SOLUBLE COFFEE EXPORTS BY EXPORTER (in MT) ECUADORIAN SOLUBLE COFFEE EXPORTS BY EXPORTER JAN - DEC 2013 (in Kg. net) Total year Year 2007 2008 2009 2010 2011 2012 2013
ElCafe 13,091.58 13,393.94 13,063.41 15,670.49 19,247.91 20,623.23 21,560.92
share
77% 7 9% 83% 85% 88% 94% 98%
Gusnobe 1,867.52 1,826.39 1,835.63 1,601.13 1,205.36 2,201.77 1,944.93
Source: Empresa de Manifiestos.
share
11% 11% 1 2% 9% 5% 1 0% 9%
Sica 1,631.54 1,555.26 722.97 1,047.53 1,413.60 1,282.04 1,019.98
Grand Total share
1 0% 9% 5% 6% 6% 6% 5%
Otros 326.73 121.43 86.68 111.38 122.36 47.06 168.55
share
2% 1% 1% 1% 1% 0% 1%
16,917.36 16,897.02 15,708.69 18,430.52 21,989.21 24,154.09 24,694.37
SOLUBLE COFFEE EXPORTS BY DESTINATION (in MT) Year 2007 2008 2009 2010 2011 2012 2013
Germany 4,101.67 4,301.05 3,876.60 5,873.08 6,281.63 6,854.83 5,783.58
share
24% 25% 25% 32 % 29% 28% 23%
Russia 3,836.73 3,765.63 3,090.00 3,602.00 5,481.78 4,275.02 4,732.43
share
23% 22% 2 0% 2 0% 25% 1 8% 1 9%
Poland 2,990.28 3,599.00 3,651.53 3,470.63 5,306.53 6,411.53 8,222.56
Source: Empresa de Manifiestos.
share
1 8% 21 % 23% 1 9% 24% 27% 33%
England 1,719.31 1,073.45 1,684.55 1,242.25 845.48 2,365.64 2,012.35
share
1 0% 6% 11% 7% 4% 1 0% 8%
Japan 0.00 894.86 555.91 746.57 478.90 535.84 543.01
share
0% 5% 3% 4% 3% 3% 3%
Others 4,269.37 2 5 % 3,263.04 1 9 % 2,850.10 1 8 % 3,496.01 1 9 % 3,594.91 1 6 % 3,711.25 1 5 % 3,400.45 1 4 %
TOTAL 16,917.36 16,897.02 15,708.69 18,430.52 21,989.21 24,154.09 24,694.37
SOLUBLE COFFEE EXPORTS BY EXPORTER (in MT) Ecuadorian Soluble Coffee Exports by Exporter
2 0,0 00
Tons
4 0,0 00 0 2 01 3
SICA
20 1 2
GUSNOBE
2 01 1
Source: Empresa de Manifiestos.
20 1 0
20 0 9
20 0 8
20 0 7
ELCAFE
SOLUBLE COFFEE EXPORTS BY DESTINATION (in MT) Ecuadorian Soluble Coffee Exports by destination
5,00 0
Tons
10 ,0 00 0
Germany
20 1 3
Others
20 1 2
Source: Empresa de Manifiestos.
Poland
20 1 1
Poland
20 1 0
2 00 9
20 0 8
England
Russia
25 0 0 0 20 0 0 0 15 0 0 0 10 0 0 0 50 0 0
In metric tons
ELCAFE TOTAL EXPORTS 2005-2013
21650.6221671.29 18972.43 15967.09 13121.9513621.44 13355.9 10598.0410106.12
0
2013
2012
2011
2010
2009
2008
2007
2006
2005 Source ELCAFE
ELCAFE TOTAL EXPORTS 2002-2013 EXPORT GROWTH GROWTH GROWTH GROWTH GROWTH GROWTH SPRAY AGLOM FREEZE MARKET IN MT IN % IN MT IN % IN MT IN % 2002
1.309
2003
2.379
1.070
81,7%
2.455
-168
-6,4%
2.443
622
34,2%
2004
2.499
120
5,0%
3.155
701
28,5%
2.829
386
15,8%
2005
2.943
444
17,8%
4.229
1.073
34,0%
3.426
597
21,1%
2006
3.400
457
15,5%
3.530
-699
-16,5%
3.176
-251
-7,3%
2007
3.423
23
0,7%
4.764
1.234
34,9%
4.935
1.759
55,4%
2008
2.894
-529
-15,4%
4.391
-373
-7,8%
6.337
1.401
28,4%
2009
2.287
-607
-21,0%
4.440
49
1,1%
6.629
292
4,6%
2010
3.167
880
38,5%
4.631
191
4,3%
8.169
1.540
23,2%
2011
2.997
-170
-5,4%
5.773
1.142
24,7%
10.203
2.033
24,9%
2012
2.676
-321
-10,7%
5.885
111
1,9%
13.090
2.888
28,3%
2013
2.982
307
11,5%
5.645
-240
-4,1%
13.044
-46
-0,4%
average annual growth
2.622
10,7%
1.821
8,6%
20,8%
ELCAFE EXPORTS BY REGION POLAND GERMANY RUSSIA
1.6% USA PERU MEXICO COLOMBIA
UK NETHERLANDS TURKEY UKRAINE ITALY BELGIUM
96.7%
1.7% SYRIA JAPAN KOREA MALAYSIA EGYPT CHINA
ECUADORIAN EXPORTS: GREEN COFFEE VS SOLUBLE COFFEE EXPORTS Ecuadorian coffee exports: Green vs Soluble 1,200 1,000 800 600 400 200 0 2008
2009
2010 Green Coffee
Source: Anecafe / Cofenac
2011 Soluble
2012
2013
OUR FREEZE DRIED PRODUCTS 1. FD-110-MR : Medium to Light Roast Robusta Freeze Dried Coffee with aroma 2. FD-110-DR : Extra Dark, Dark Intense y Standard Dark. 3. FD-101-A : Medium Roast Arabica Freeze Dried Coffee with aroma 4. FD-107 (MILD) : Medium Roast Robusta and Arabica Freeze Dried Coffee with aroma .
DEVELOPING A SELFSUATAINABLE MODEL WITH TRACEABILITY FOR ROBUSTA COFFEE IN ECUADOR.
GREEN COFFEE BACKGROUND • 200,000 Ha of coffee , 150,000 Ha in production (103,000 Ha in Arabica and 47,000 Ha in Robusta). • Current production 350,000 bags of 60 kilo. (100 thousand robusta and 250 thousand arabica). • Main issues: 1. Low production (4 bags / Ha). 2. Low application of Farming Practices, prunning or harvest/post harvest methodologies. 3. Lack of research and genetic improvement programmes. 4. Lack of high yield seeds and germplasm banks.
GREEN COFFEE BACKGROUND 5. Lack of nurseries and clonal gardens. 6. Lack of drying infrastructure. 7. Lack of direct procurement centres. 8. Low access to loans. 9. Low associativity. 10. Lack of information in production costs. Due to this situation, Ecuador has been importing green coffee from Vietnam and Brasil over the past 10 years, in order to satisfy the demand of the local soluble industry.
SELF SUSTAINABILITY WITH TRACEABILITY ENVIRONMENTAL
SOCIAL
ECONOMIC
STRATEGIC PILLARS 1. Green Coffee Research Centre : Continuous investigation for new varieties and technologies – Elite Robusta Coffee Germplasm. 2. Rural entrepreneur training centre for small farmers. 3. Experimental centres strategically located by microclimates in alliance with motivated and highly qualified farmers. 4. Supply of high yield genetic material to farmers. 5. Development, adaptation and distribution of technological packages to small farmers ( 2 Ha).
STRATEGIC PILLARS High yield genetic material to farmers EXPERIMENTAL CENTRES IN ALLIANCE WITH FARMERS
Technological Packages
ELCAFE Research Centre
Rural Entrepreneur Training Centre
CASE STUDY FOR SELF SUSTAINABLE MODEL WITH ROBUSTA COFFEE
• Developing small efficient production units, self sustainable, competitive in costs and quality and with traceability of the farmers. • Training to promote the empowerment and transformation of farmers into Rural Entrepreneurs and encouraging them to disseminate their knowledge on coffee to other farmers, in order to trigger the multiplication of the efficient units. • Measuring and Monitoring yield and production costs to determine their Self - Sustainability ( Traceability of Self Sustainability).
ROBUSTA COFFEE SELF-SUSTAINABLE MODEL INDICATORS Coffee Variety
Average Hectares Estimated local Yield (qq per per family price (usd/qq) ha)
Robusta
2
Coffee Variety
Producci贸n in Ecuador (qq)
Robusta
1,920,000
80
Hectares 24,000
85
Production Annual Gross Yearly Net costs ( 2 Income Per Profit per Hectares) Family family $ 8,000
Number of self Average sustainable Yield (qq per families with 2 ha) Ha 12,000
80
Monthly Net Profit per family
$ 13,600
$ 5,600
$ 467
Estimated local price (usd/qq)
Cost Per Hectare
Total Value in USD paid to local farmers
85
$ 4,000
$ 163,200,000
*Average price estimated by World Bank until 2.020.
ROBUSTA COFFEE SELF-SUSTAINABLE MODEL INDICATORS 12.000 self-sustainable families dedicated to 2 has of coffee per farmer, producing 80 qq/ Ha (60 bags). Year net income of USD $ 5.600,00 per selfsustainable family. 2 million quintals of robusta coffee (1.5 million bags) per year. Country revenues over 160 million dollars per year in green coffee exports. 11.200 new jobs for harvesting.
ROBUSTA COFFEE SELF-SUSTAINABLE MODEL INDICATORS Renovation of 24.000 has of robusta coffee, empowering of 12.000 Rural Entrepreneurs. Baseline: 5 qq/ha (3 bags) Target: 80qq/ha ( 60 bags) How: Technological Package for small farmers with full Traceability.
SOCIO-ECONOMIC POLICY At ELCAFE, we are convinced that only trained green coffee producers can compete in the global market, no matter the size of their farmland. J. Massoud
ELCAFE GREEN COFFEE RESEARCH
ELCAFE GREEN COFFEE RESEARCH
RURAL ENTREPRENEUR TRAINING CENTRE
RURAL ENTREPRENEUR TRAINING CENTRE • ELCAFE opened in 2010, its first Training Centre for Rural Entrepreneurs in Montecristi, with 500 farmers mainly from Pueblos Montubios Association receiving training every year. • Training on pruning, fertilization, irrigation, harvest and post harvest systems, processing, commercialization, green coffee cupping and good farming practices. Creating an innovative profile of the self-sustainable farmer of the future.
RURAL ENTREPRENEUR TRAINING CENTRE
STRATEGIC ALLIANCES WITH FARMERS AND ASSOCIATIONS • Four experimental centres located in strategic areas : Bucay, Portoviejo, Playas and Amazonian Region. • Partnership alliances with farmers from Manabi for the development of self-sustainable farms. • PUEBLOS MONTUBIOS : Alliance with associations to promote technological transfer, training and establishment of procurement centres in Manabi. • USAID/PRODEL : new 1.000 has of robusta coffee were created in Sucumbíos Province, Amazonian Region.
CONTACT JUAN CARLOS VILLACIS Managing Director E-mail: jvillacis@cafeelcafe.com LORENA VASQUEZ Commercial Director E-mail: lvasquez@cafeelcafe.com Our address : Av. Juan Tanca Marengo Km 3 ½ Tel.: (593-4) 2658670 web page: www.cafeelcafe.com