Chile Prunes magazine nº7 (English version)

magazine

Santiago de Chile -April 2020

The drought is undoubtedly the most severe risk. But, this is coupled by the effects of the COVID-19 pandemic, the consequences of which have yet to reveal themselves to the world, and the fact that the global economy is at the brink of a recession that could affect exports.

The Short and Long-Term Challenges of the Chilean Prune Industry

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List of Chile Prunes association members

Editorial

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he COVID-19 pandemic is putting us through a situation never seen before in human history. Up until now, Chile and its agro-industry sector have responded well to this crisis. I would like to emphasize “until now”, knowing that this scenario can change in weeks or even days. News mutates as fast as the virus does, but at least up to mid-April, the situation is contained.

In order to achieve this, we have received support from our authorities, a healthcare sector that is deeply committed to its cause and a community of companies, workers and citizens that is mostly on the same page. The dehydrated fruit industry – and the prune industry in particular – has been no exception, dutifully committing to all types of protocols, sanitation standards and special care measures for our workers, collaborators, suppliers and end consumers. We were also helped by the fact that our harvest was practically done when the first case of coronavirus appeared in Chile on March 3rd.

Editorial Board Pedro Pablo Díaz Pedro Acuña Christian von der Forst Jorge English General Publisher Christian von der Forst Edition and Design

Frutexsa

Good Valley

C: Agustin Plaza / Sebastián Plaza / Julius Crasemann P: +(56) 22829 6000 E: aplaza@frutexsa.cl splaza@frutexsa.cl jcrasemann@frutexsa.cl W: www.frutexsa.cl

C: P: E: W:

Bruno Ceroni +(56) 22582 5705 info@goodvalley.cl www. goodvalley.cl

Prunesco

Pacific Nut C: José Tomás Quezada / Benjamín Herreros P: +(56) 22589 8000 E: jtquezada@pacificnut.com / bherreros@pacificnut.com W: www.pacificnut.com

C: Pedro Monti / Marcelo Lacunza P: +(56) 22489 0000 E: pmonti@prunesco.com mlacunza@prunesco.com W: www.prunesco.com

Sofruco

Sunsweet Chile

C: P: E: W:

Pedro Pablo Díaz +(56) 22670 0620 pdiaz@sofruco.cl www. sofruco.cl

C: P: E: W:

Juan Pablo Mac Kay +(56) 981369145 jpmackay@sunsweetchile.com www.sunsweet.com

Superfruit C: P: E: W:

Mateo García +(56) 96627 9624 mgarciap@superfruit.cl www. superfruit.cl

PuertoC Comunicaciones & Marketing.

Onizzo C: Agustín Marín C. / Claudia Marangunic P: +(56) 22236 2676 E: agustin@onizzo.com cmarangunic@onizzo.com W: www.onizzo.com

A magazine of Chile Prunes Association AG

Amidst all of this commotion, Pedro Acuña Gutiérrez became the new executive chairman of Chile Prunes. With a long-standing track record in the finance sector and four years of experience working in fresh fruit, I’m sure Pedro will make a significant contribution thanks to his wealth of expertise in management and marketing tools developed in the financial world, marrying them with his technical agricultural knowledge.

I have no doubt that his professional quality will help us continue to grow through a series of activities associated to the promotion of exports, trade union activities, international tradeshows and others. In the prune industry, we have also carried out top-notch professional work; work that shall continue, as it has led us to become the world’s number one exporter.

Moreover, the product we supply to the world is aligned with today’s global trends of better and healthier nutrition. Few foods can offer as many benefits as prunes and have such a great taste and so many different ways to eat it.

Work doesn’t stop… Let’s go!

Surnat C: P: E: W:

Andrés Santa Cruz /Pedro Pablo Aspillaga +(56) 99825 8902 andres@surnat.cl / pedropablo@surnat.cl www.surnat.cl

Pedro Pablo Díaz

President of Chile Prunes Chile Prunes Association, address Cruz del Sur 133 of. 703 Las Condes - Santiago - Chile (56 2) 24724783 - info@chileprunes.cl

Silvestres C: P: E: W:

Matías Campos +(56)977594162 mcampos@silvestres.cl www.silvestres.cl

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www.chileprunes.cl C: Contact

P: Phone

E: Email

W: Web

Agromillora Sur, filial de Agromillora Group, compañía líder a nivel mundial en el sector viverístico con más de 33 años de experiencia a nivel internacional y más de 22 años en Chile.

Agromillora Sur, a subsidiary of Agromillora Group, a leading company worldwide in the live sector with more than 33 years of experience internationally and more than 22 years in Chile.

CIRUELOS EN SÚPER ALTA DENSIDAD, EL FUTURO DE LA INDUSTRIA

PLUMS IN SUPER HIGH DENSITY, THE FUTURE OF THE INDUSTRY

SOMOS LÍDERES EN LA MULTIPLICACIÓN DE PLANTAS DE OLIVOS Y ACTORES RELEVANTES EN LA MULTIPLICACIÓN DE PORTAINJERTOS DE CEREZOS, LO QUE HA PERMITIDO EL EXPLOSIVO CRECIMIENTO DEL SECTOR EN LOS ÚLTIMOS 22 AÑOS.

WE ARE LEADERS IN THE MULTIPLICATION OF OLIVE PLANTS AND RELEVANT ACTORS IN THE MULTIPLICATION OF CHERRY ROOTSTOCKS, WHICH HAS ALLOWED THE EXPLOSIVE GROWTH OF THE SECTOR IN THE LAST 22 YEARS.

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ace 5 años estamos innovando en el mundo de la Ciruela D'Agen y, en base a un portainjerto de bajo vigor (Rootpac20), tenemos un ensayo de 3 ha plantadas el año 2014 con un marco de plantación de 3.5 x 1.5 mts con el objetivo de mecanizar completamente las labores técnicas y fundamentalmente la cosecha.

Este año realizamos la 3era cosecha (primera cosecha 6.400 kilos, segunda cosecha 21.100 kilos) donde se obtubo una producción en fresco de más de 30.500 kilos/ha y un rendimiento seco de

10.600 kilos con un calibre promedio de 60-70. Esta alternativa permite plantear la producción con doble propósito, cosecha peatonal para exportación en fresco y una cosecha mecanizada para fruta deshidratada.

Estamos convencidos de que este sistema será el futuro del sector.

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years we are innovating in the world of D’Agen Plum and, based on a low-current rootstock (Rootpac-20), we have a trial of 3 has planted the year 2014 with a 3.5 x 1.5 mts planting frame with the aim of completely mechanizing the technical work and fundamentally the harvest.

This year we made the 3rd harvest (first harvest 6,400 kilos, second harvest 21,100 kilos) where

a fresh production of more than 30,500 kilos/ha and a dry yield of 10,600 kilos with an average caliber of 60-70 was obtained. This alternative allows to propose the production with double purpose, pedestrian harvest for fresh export and a mechanized harvest for dehydrated fruit.

We are convinced that this system will be the future of the sector.

Mayor información: Mauricio Zúñiga, Responsable Técnico Comercial, Tel. +56 981571422 • Email: mzuniga@agromillora.com 04

VER VIDEO

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Briefs

Briefs February; a Great Month for Business Trips

Visit to Mendoza and San Rafael place in Mendoza and San Rafael, Argentina, and it was attended by representatives of the growers and exporters that form said Node. A few noteworthy members in attendance included Agrícola Alcalde, Agrícola Los Castores, Agrícola Santa Elena, Agrícola El Tranque, Agrícola San Francisco, Frutexsa, Prunesco and Pacific Nut. The purpose of this project – financed

by Corfo Metropolitana, managed by Asoex and executed by Chile Prunes – was to hold a series of meetings with authorities and growers, as well as visiting orchards and dryers (both sun and oven-dried). Key meetings were held with Mendoza’s Instituto de Desarrollo Rural (IDR, Institute for Rural Development), where guests learned about harvest forecasting methods; and the Instituto Nacional de Tecnología Agropecuaria (INTA, National Institute of Agriculture and Livestock Technology), gaining in-depth knowledge of the work being done to support agriculture, processing and the promotion of prunes in Argentina. “People are very interested to hear from Chilean professionals and learning about their experience and how things and done in our country”, said Chile Prunes.

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The 2020 Season: Less Volume, Better Size

Major players from the nuts and dried fruit sector attended the ProdExpo trade fair in Moscow, Russia (February 10-14), as well as a series of corporate promotional activities in India (February 19-21).

Frutexsa, Good Valley and Prunesco made the trip to Russia. Sebastián Plaza from Frutexsa commented that they visited Russia because “it is a very important market for us, because they are huge consumers of our products, not just prunes, but walnuts, raisins and almonds as well”.

When it comes to India, Superfruit’s José Antonio Soffia noted that “this initiative was decided as a group to

promote the consumption of our products (pork, wine, prunes and walnuts). The idea was – in conjunction with support from ProChile and the Chilean embassy in New Delhi – to hold B2B meetings with a number of importers, giving them the chance to get to know the different companies and enjoy a product tasting. It was a prospecting trip.

Chile Attends Gulfood 2020 Gulfood 2020 (February 16 -20) – held in Dubai – is a key stop on the trade fair calendar thanks to its high-profile crowd and for taking place at the same time as harvesting and the opening of exporters’ trade season, many of which are members of Chile Prunes, such as Frutexsa, Pacific Nut, Prunesco, Silvestres and Superfruit.

Pedro Monti from Prunesco said that although there were fewer visitors from Asia this year, especially from China, due to the coronavirus, there were more representatives from Russia, Lithuania, India, Pakistan, the United States and others, all of whom are regular business partners.

This trade fair devoted to food, beverages, retail, equipment, consumables and services for the food service industry, plays host to around 100 thousand professionals, making it a must on the trade show circuit, allowing visitors to spend time with industry specialists, check out estimates, see how much fresh product is being shipped and discover where new markets are opening up.

Regarding our efforts to control the coronavirus, Chile Prunes has stated that plant processes are being handled under the strictest sanitation measures, decreasing human contact as much as possible, not allowing visitors of any kind, such as suppliers or customers, and using outlined areas that allow teams to be separated. “Our members follow ex t re me ly rigorou s sanitation measures that not only ensure external certification, but also make sure that processes are carried out as usual at the plants, resulting in a very good end product”, said Pedro Acuña, executive chairman of Chile Prunes. The chairman also added that “the country can’t stop; demand has been normal (up to late March) and authorities have been flexible to make sure that process like supply and transportation, among others, run as smoothly as possible”.

Pedro Acuña, New Executive Chairman of Chile Prunes This month, Pedro Acuña Gutiérrez, an agricultural engineer from the Pontifical Catholic University of Valparaíso with an MBA from Adolfo Ibáñez University and a long-standing track record in the financial sector, took over as executive chairman of Chile Prunes, the trade association that gathers the country’s prune processors and exporters, in place of María Paz Soto.

which, in my opinion, adds value to an organization like Chile Prunes”, said Mr. Gutiérrez. In the past, he worked in the fresh fruit industry for four years.

Welcome, Pedro!

Linked to the banking world since 1996, and after nearly a decade of holding management positions in Banco Santander and Scotiabank, Pedro Acuña wanted to return to the agricultural arena “to incorporate the marketing and management tools developed in the finance world together with my technical knowledge,

Drop in Argentine Supply Plum production in Mendoza, Argentina, has experienced a drop of nearly 50% compared to an average year, mainly due to the frosts suffered in 2019. Although there is still no final tally, in January of this year, the Rural Development Institute (IDR, Instituto de Desarrollo Rural) was projecting 64 thousand tons of fresh plums, or 20 thousand tons of dehydrated fruit for export.

Their last projection was 51 thousand tons, a little bit better than the 2019 season, but only one third of the numbers seen in 2018. In fact, last season, losses were also recorded due to low tempera-

tures during flowering. This drop in production should have improved the price offered to growers, but major players in the industry have pointed out that this low level of profitability will continue unless in-house improvements are made that allow them to access “type A” markets, where the best prices are found. 95% of Argentine production is exported.

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Cover Topic

Climate change

The Greatest Long-Term Challenge for Chilean Prune Producers is Still the Drought

The world is going through a dire crisis due to the COVID-19 pandemic. The sanitary, social and economic impact is so profound that, for now, it has pushed an even more serious global issue to the background: climate change.

This article deals with the measures that should be or are already being taken in Chile to deal with its main local consequence: a mega-drought.

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n, Chile, global warming has hit hard, especially in the central part of the country, which concentrates most of the agriculture and livestock activity and has suffered a rain shortage for decades. Today, experts are already calling it a mega-drought, and for all of those linked to farming activities, this has obviously become a challenge of gargantuan proportions.

Due to all of the above, this issue was thoroughly debated at the 7th Prune Expo (Expo Ciruelas Secas) organized by Chile Prunes, an event that revealed – among other lessons – a very important takeaway: the country must do everything in its power to overcome its water shortage. This way, the country can leverage the opportunity of having one of only five Mediterranean climate zones on the planet, and, moreover, of meeting the growing global demand for Mediterranean diet products that reduce heart disease, Alzheimer risk and also increase people’s overall life expectancy. There is a basis for this argument: today, 87% of the foods exported by Chile belong to a Mediterranean type set of products.

In addition, since 80% of the world’s population is concentrated in the Northern Hemisphere, for Chile, the chance to export counter-season functional food is a comparative advantage that must be safeguarded.

shift, bringing the snowline up between 300 to 500 meters during this century, affecting river patterns, concentrating seasons and decreasing surface runoff.

This scenario will lead to a reduction of the “precipitation supply”, greater evapotranspiration demand, an increase of heat stress and growing degree day periods, and a decline of cold hours and frost frequency. According to Dr. Francisco Meza of the UC Global Change Center, this directly impacts the production of plum trees and demands “enhanced management”.

How can this be achieved? The water shortage problem can be tackled from a variety of fronts The strategies the executive branch is analyzing to fight the drought include recharging underground aquifers, looking for new water sources, implementing new technology and projecting future reservoirs, stressed Chilean Minister of Agriculture, Antonio Walker, adding that “we have to go and find new water sources, because we have them. All of this rests on making strong investments, and for this very reason, we have determined that a new form of governance is urgent, as is a new water oversight body”. He also stated that “we have had less (than usual) rainfall for the past 20 years. We need to have a new kind of management, a new form of care; better water administration”.

Decades of Water Shortage However, water shortage makes things difficult.

Central Chile has a highly variable climate with a trend of declining precipitation that has led to a scenario with low availability of hydro resources. Average rainfall has decreased by nearly 100 milliliters a year for the past 30 years, a phenomenon that, according to the General Water Board (DGA, Dirección General de Aguas), has led to a drop in the flow of the region’s main basins (Maipo, Cachapoal and Tinguiririca). Between the regions of Coquimbo and O´Higgins alone, the decline in surface runoff has equaled 800 to 1,200 million m3.

Moreover, estimates are showing that the isotherm will

The Reguemos Chile Corporation agrees with several of the points proposed by our government authorities.

Today, 87% of the food exported by Chile For Chile corresponds to a “basket” of Mediterranean type.

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Cover Topic

For example, they have also stated the need to invest in new dams, interbasin transfer infrastructure and, eventually, the so-called hydro highway, which, in the opinion of the corporation’s executive chairman, Maximiliano Letelier, “is a way to improve the distribution of fresh water compared to what we have today”. New desalination plants could also be built, given the fact that, among other reasons, they provide safety to the supply system, although Letelier admits that producing this water comes at a high cost, and their construction and operation can generate environmental issues.

Reguemos Chile also recommends implementing measures to allow aquifers to be recharged, such as continuing with the advancement of wastewater treatment and strengthening water user organizations.

The Key: Improve Irrigation Another key to success – probably the main one – is irrigation. When it comes to irrigation, the goal is to improve the water supply of surfaces that are being poorly irrigated, enhance the quality and efficiency associated to the application of irrigation water and rehabilitate farmland that currently has bad drainage.

The main point regarding this matter is making sure

that the land where water availability is decreased can still maintain the same amount of irrigated surface area.

The State of Chile promotes irrigation and drainage works through Law No. 18.450, a regulation which, through public tenders, provides a bonus to cover a percentage of the cost of the projects that are selected.

“The maximum bonus depends on the type of beneficiary”, says Loreto Sagardía of the National Irrigation Commission’s Department of Irrigation Promotion (Departamento de Fomento al Riego de la Comisión Nacional de Riego or CNR), the institution in charge of managing this aid. “We look for water savings. The idea is for growers to use the same amount of water they’re using now to increase their irrigated surface area”, adds Mrs. Sagardía.

In 2019, the funding available for the tenders associated to Law 18.450 added up to 100,068 million pesos, or around USD $130 million (according to the December, 2019 exchange rate), which was allocated towards civil works, technical irrigation and drainage. This funding was also used to finance projects that prevent pollution or improve the quality of the water used for irrigation, as well as irrigation infrastructure powered by renewable non-conventional energy, among others.

Cover Topic

Regarding irrigation, the main point is achieving the possibility of keeping an irrigated surface where the water availability decreases.

The California Example When it comes to this subject, the Californian experience is a valuable source of information. Allan Fulton, an advisor on irrigation and water resource-related issues from the University of California, assures us that based on decades of monitoring the strategies implemented by this US State, the keys to an effective management of orchards when facing a water shortage are the following:

• Apply fruit thinning techniques to avoid overharvesting.

• Thoroughly analyze the growth stages of the trees and crops that are less sensitive to water stress to perform irrigation reductions.

• Use effective diagnostic tools to make irrigation reduction decisions.

• Carefully monitor the maintenance and performance of irrigation systems.

• Look for and avoid water stress in trees during the sizing of the fruit, especially if the objective is achieving large fruit.

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In addition, just as a precaution – and common sense – Mr. Fulton also highlights the need to limit the consumption of water in activities where water may not be strictly necessary. “Our ability to minimize the impact of the drought seems to depend on the level of awareness we have regarding the severity of this water shortage and how to handle crop load and irrigation”, he concludes.

Recommended Technological Tools Among the technology solutions that help alleviate water shortage, the Scholander pressure pump has proven to be an effective diagnostic tool for calculating the water stress of trees. “Its value lies in its ability to provide a direct indication of how the plant is integrating and adapting to the climate and soil environment and how it’s being transformed by water”, states Allan Fulton from the University of California.

According to this American consultant, another equally valuable – albeit less relevant – procedure to fight the effects of drought is plant evapotranspiration (ET) estimation, which basically contributes to the design of weekly action plans. On the other hand, he also brings up soil moisture monitoring, as it “can help quantify the amount of soil storage that is available to be used at the beginning of the season, showing the water penetration depth of each and every watering”.

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ASHLOCK COMPANY (USA) PITTERS Equipos para despepitado de frutas ASHLOCK Co. (USA)

Since the early 60s ASHLOCK Co. In California has been developing equipment specifically designed to pit different stone fruits. Today it supplies machines for prunes, cherries, olives and dates.

At the beginning, when a prunes growers association asked to design and construct a solution to pit prunes.

Once they approved the offer from ASHLOCK Co. they decided they needed to lease those machines, including technical assistance, maintenance and permanente upgrading of the equipment when available. This is how ASHLOCK Co. has supplied its equipment under this mode, being very successful with numerous processors in the different countries where it is present. In this way, our customers can always access the latest technology so they can offer the best quality products to their consumers.

ASHLOCK prune pitters have recently incorporated 4x4 plates, new pitting knives, automatic size adjusters and permanent improvements of the different components of the machines. Beginning 2020, at customers request, there will be available a sorter to be added to each equipment which will allow retirement of pit remains and other non desired materials from the finished product.

This device will help processors to achive the most strict quality standards of their customers.

The lease mode gives our clients the oportunity to operate with the latest technology equipment, permanently serviced, with 24 / 7 technical assistance, and spare parts availability. It also avoids huge investments in

assets that become obsolete or require another important investment in upgrades and maintenance.

ASHLOCK Co. has as its principal goal to keep supporting its customers to be leading the processes of pitting and transformation of fruits into added value products for customer´s satisfaction.

Interview

Interview

An Update by Three Experts in the Chilean Prune Market Less volume, better sizes; more fresh sales and international demand with a clearly positive outlook. These are just some of the tips provided by these three upper management execs amidst a pandemic that has not affected this agro-industry sector (yet), thanks to the rigorousness of the protocols that have been implemented.

Federico Montes, Prunesco CEO THE MARKET. Although there will be less fruit this year, as a company, we believe that despite the coronavirus, sales and exports have been normal. It’s been a quiet year. In terms of pricing, large fruit is at a similar rate than last year, and small fruit, which people didn’t pay much for just a few years ago, has shown a significant increase.

CORONAVIRUS. The country has done everything in its power to make sure the agriculture industry continues its operations to supply the country and foreign markets.

We have all the necessary operating permits, regardless of whether or not we are in a quarantined zone. Here at Prunesco, we have taken several measures to decrease the potential chain of contagion as much as possible within the company, and to date (Abril 8th), we have been successful.

We’ve even held training sessions to keep our staff from catching the virus outside of the company.

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DEMAND. In March, many supermarkets in Europe had sales 40% better than usual, so now they are rushing us to ship out our containers; they’re pressing us to streamline our shipments. This trend is already spilling over into April.

Why the increase in demand? We’ve come up with a few theories along with our retail customers: one advantage of this product is that it doesn’t spoil. Perhaps a number of people have gone shopping to stock their pantry for three months, and, unlike fresh fruit, prunes are perfect for that. On the other hand, prunes are strongly positioned in Europe as a chocolate substitute to quell anxiety.

Prunesco: The company’s offices and plant are located in Pirque, a semi-rural area about 35 km from downtown Santiago. 100% of their raw materials are plums. According to 2020 statistics, 10 thousand tons become prunes in a diversity of packaging for supermarkets, and another 3 thousand tons are used to make pulp and concentrated juice. Their most important markets are Germany, the Nordic countries, Italy, Australia, Mexico and Brazil.

Andrés Santa Cruz, Surnat CEO THE SEASON. In 2020, we are going to see a drop in production of about 20% compared to 2019 (a year that had already experienced a slight decline compared to the previous season). A few factors contributing to this decreased harvest are drought, problems caused by fruit that fell off of trees due to sun scorching and, probably, a season with less fruit per tree. Moreover, the fresh D’Agen plum, which wasn’t even on the radar in the past, is consolidating its position in China, and that is taking some volume away from prunes. In five years, Chile went from exporting 3,000

to 33,000 tons of fresh product in 2020. But, it is important to note that fresh prices have been much more volatile that prune prices.

SIZES. One trend that is taking foot is that for several seasons now, we have had better and better sizes. Our fruit has more pulp and sweetness.

CORONAVIRUS. We have to maintain the supply chain, and in order to do so, we have received support from our government authorities. In Surnat, to keep production capacity at a normal pace, we have taken several measures to avoid contagion within the company. We make up work groups with less people, we use different shift times to decrease interpersonal contact and we’ve established two-meter distancing in the sorting lines, among other initiatives.

SNACKS. One aspect that will benefit prunes down the line is that the snack segment could increase its level of consumption, because it’s easy to consume and people are staying home a lot and don’t want to cook all the time.

THE MARKET. Prunes are consumed more during the second half of the year. Over 65% of exports take place in this period, a period in which things should start getting back to normal.

I think that despite the overall uncertainty and abnormal operations – especially regarding supermarkets and restaurants – we are going to see a better second semester in terms of consumption.

Surnat: the company’s business is focused on prunes, walnuts and cherries, with offices in Santiago and a prune processing plant in Chimbarongo, two hours from the capital. Their most important markets are Mexico, Europe and China.

Bruno Ceroni, Good Valley CEO HARVEST. With the information we currently have, and still waiting on the season’s final numbers, we’re expecting a drop in volume. When Expo Ciruelas Secas was held (Prunes Expo, November of last year), we were not

expecting much damage from frosts and drought, but they ended up affecting us more than we had thought.

However, the drought has had a positive effect on size, making for much sweeter fruit. This was also aided by the great timing the growers showed when harvesting and thinning the amount of fruit per tree, all for the fresh harvest destined to China, leading to concentrated soluble solids in less fruit. We are approaching the sugar levels produced in the United States and France.

FRESH. Regarding the fresh plum harvest, and considering the bad experience and disparate quality everyone experienced last year, we thought it would drop down to 1/3 or 1/4 of the numbers seen in 2019. However, it was more than half, adding up to 1,374 containers, all thanks to a more organized industry, joint efforts between growers and exporters, greater consensus in the search for better quality, more pressure from receivers, with guaranteed minimums, and binding purchases, among others. That joint risk will be rewarded and there will be greater returns... It was a good decision.

CURRENT EVENTS. We believe the Asian market will pick up in April. The first quarter was slow, but inquiries and requests are already coming in from China, we’re seeing more interest.

In the meantime, at Good Valley we are taking all necessary measures, such as reduced shifts that don’t overlap or taking the temperature of everyone entering our facilities. Our workers have been very responsible. They don’t want to get sick or miss work. We all take care of each other.

There has been uncertainty – a global economic recession is being announced for the second half of the year – but at the same time, consumption increases during the second semester.

We are in direct contact with our receivers and everything looks good so far. Here at Good Valley, we expect to grow our volume by 10% compared to 2019, and, until now, the numbers are projecting that we will achieve our goal.

Good Valley: The company focuses its business on prunes, raisins and walnuts, among other dried products, which are mainly shipped to Germany, Italy, Poland and Asia. They own a processing plant in Santa Cruz, two hours south of Santiago.

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Interview

Interview

An outlook from Sofruco

Chilean Fruit is not Quarantined; Now, the Key Lies in the Supply Chain

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ver the past six month, Chile has gone through huge social unrest, a prolonged drought that has mainly struck the central area of the country, and, just like the rest of the world, we have been affected by the “breaking story” – as journalists say – that is the coronavirus (COVID-19), a pandemic that promises to continue plaguing the world for many long months in 2020.

In terms of this last point, at least for the Chilean agroindustry, the outlook is positive, because the arrival of the virus and its daily escalation happened in March, 2020, and not earlier.

lost a significant portion of the product being traded in markets today.

Fortunately, the progress of the virus and the timing of when it hit Chile worked in our favor, because to date, most of the harvest is done and processed, and thanks to the agroindustry, it can even be stored for a worst case scenario. Since the conditions needed to continue supply are still available, “today, our priority is avoiding a shortage in the supply chain, making sure customers are not affected and always being capable of supplying our products”, according to Enrique Schwember.

What measures are being taken to ensure this?

According to Enrique Schwember, Manager of Development and Quality at Sofruco Agroindustria, when he agreed to this interview (during the second half of March), most of the harvest work had been completed. All that was left were wine grapes, kiwi and some citrus fruits.

What would have happened if COVID -19 had started in Chile in February, 2020 and cases had started popping up in processing plants or orchards? “Mass contagion would have led us to order a full quarantine for sick employees and a preventive quarantine for the rest of our workers, forcing us to halt the processing and shipping of most of our fruit, which would have been a crippling blow to the agriculture industry”, adds Mr. Schwember.

In fact, if COVID-19 had arrived in Chile before March, 2020, most of the country’s fruit would still be hanging from the trees in the orchards and we would have

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Obviously, security measures for our personnel have been increased, especially encouraging selfcare, which is one of the most important points, and also obeying the guidelines established by sanitation authorities. The top concerns are enforcing the use of facemasks, frequent hand-washing or applying alcohol gel, respecting social distancing and not holding meetings involving more than two or three people. If the meeting requires the presence of more than three people, they are held outdoors, always respecting appropriate distancing. “We have to take advantage of the fact that we are in the countryside. We’re not overcrowded and our plants are properly separated.

Where is Sofruco located?

We are in the comuna (county) of Peumo, in the VI Region (150 kilometers from Santiago), along the Carretera de La Fruta (Fruit Highway).

For the Chilean agroindustry, the outlook is positive, because the arrival of the virus and its daily escalation happened in March, 2020, and not earlier.

What other preventive measures have you taken?

Human Resources created a protocol specifically for the company based on the recommendations made by sanitation officials. Regarding in-house communication, the company defined a streamlined early warning system, which means that if anyone is showing COVID-19 symptoms, they must report the situation immediately as soon as they become aware of their condition, channeling the alert directly to Human Resources.

product, to make sure it reaches consumers’ tables.

EIn our case, there are nearly 75 people spread across two plants, of which only 15 of us carry out formal management duties. But, in reality, we only perform semi-managerial tasks, because we also have to supervise or directly intervene at some point of the process.

My work team in the Quality area is closely linked to the Production area: we are always making sure that the processes and products meet quality standards and customer expectations. My 10-person group is physically stationed at the agro-industry plants located in Peumo. The situation for the people working in Production is more or less the same.

There is only one member on the management staff, and in their case, we were able to implement telecommuting – as it’s called today – because he lives with his mother, a senior citizen who belongs to the high-risk population group.

In the La Rosa Sofruco holding group, and particularly in the agriculture industry, we know that our main duty is to ensure the stability of the supply chain just as many other essential production sectors are doing, such as fuel and medication manufacturers, among others. We have to continue pushing forward, because regardless of whether or not there is a quarantine, people need these services, and therefore, a joint, responsible effort is required from the entire community, authorities and the business sector. For this very reason, we have joined the “#no paramos por ti” (#we don’t quit for you) campaign.

One of this industry’s advantages is that work takes place in wide open spaces, but a downside is that it doesn’t allow much telecommuting…

That is true. In our sector, all companies need the same things and face the same difficulties. Telecommuting is impossible. In order for a production process to work, you need someone to handle the food, the physical

Enrique Schwember, Gerente de Desarrollo y Calidad de Sofruco Agroindustria

017

Interview

How have you handled personnel transportation and transporting fruit to ports?

In terms of personnel transportation, the current situation has affected us because processing is carried out 24-hours-a-day in shifts that start at 7:00 am. Part of the staff has been arriving late due to the lack of public transportation, especially employees that don’t live in Peumo. Passenger transportation companies are scared of the pandemic, and if we also factor in the restrictions imposed by the curfew, it’s easy to see why there has been a decline in transportation frequency. But, regardless of all of this, we know we can’t stop.

On the other hand, when it comes to COVID19’s effects on fruit being shipped to the ports of San Antonio and Valparaiso, our export schedule has not been affected so far. We haven’t had any

highway issues with transportation companies, either. The programs established in February were fully complied with. However, we are concerned that highways may be closed, preventing our trucks from reaching their destination; but, fortunately, this has yet to happen.

Where does Sofruco send its products? How have things worked out with your export destinations?

In that sense, everything has gone according to plan.

In terms of wholesale fruit, we mainly export to Russia, Poland and Mexico. For commercially packaged products, we have an important customer in Colombia and customers in Chile’s domestic market. We also have some minor shipments to Trinidad and Tobago, and we recently began supplying an important supermarket chain in Spain, an activity we are planning to continue all year.

and personalization The model that sets Prunext International apart The Argentine-Chilean company develops ginning machines and spare parts of unique design in the market, which offers a model where a close link with customers is the central concern.

Prunext Internacional is a young company, but one that bases its value offer on the extensive experience of its partners. Founded in early 2019, it is a binational company, founded by a group of Argentines and Chileans formed by Mauro Bustos, Daniel Farina, Claudio Vicencio, Sergio Arena and Juan Burgos, all of whom have decades of experience in the field of gin manufacturing. and spare parts for the plum industry.

"We spent many years working for third parties and we were convinced that we could take advantage of all our knowledge to create a different business model. Companies currently on the market have ways of operating that have been for many years without bringing about changes in the customer relationship or in equipment, which produces wear and tear where continuous improvement and innovation are not present ”, says Mauro Bustos, in charge of the commercial part of Prunext International.

From this momentum, they invested in a manufacturing plant and warehouses located in Mendoza, Argentina together with a distribution center located on the other side of the mountain range, in Chile, and quickly began to gain market thanks to innovative solutions, developed with more technology efficient and much more personalized service.

"We want to provide fresh air, drive and new ideas that make it easier for customers to incorporate new technology, with technical and financial assistance to processing plants designed according to their size," says Bustos, who stresses that all of this is possible thanks to a family support that allows the full time dedication of the five partners to the project.

The result: excellent craftsmanship "that rewards us beyond the economic factor.”

The result of this vision is the development of unique design patents in the market, which provide higher production levels with less maintenance, drastically reducing parts exposed to wear. An example of this is its Prune / date pitting machine x64 ginner, considered the most robust on the market. In addition, Prunext Internacional manufactures original spare parts and has specialized technicians available to support the work of plants throughout Chile, ensuring speedy service and maintenance for all types of ginners.

The attractive price / quality ratio, and a productive format close to customers, have enabled Prunext International to provide solutions in less than a year in Chile, Argentina, the United States, France and Australia, and is advancing in the development of plant equipment in Spain. "We want to continue deepening this market niche. Feeling like a new generation in the field gives us a vision of global presence.We still have a lot to say ”, Mauro Bustos says.

PRUNE/DATE PITTING MACHINE X64

Design Patent N° 95950 |Invention Patent N° 20180103008|

+54 9 261 419-0029 | info@prunext.com | www.prunext.com | 018

| Mendoza | Argentina

Social

Plums in super high density, the future of industry

Images of a great meeting These pictures show just how fun and diverse Expo Chile Prunes 2019 was. It was loaded with original and/or important issues for the industry and also hosted coffee breaks that served as a perfect opportunity to catch up with friends and acquaintances and, of course, do business.

Today all industrial processes that are efficient they are because they are endowed with technology in their process, and the plum industry is not exempt.

In this sense, the FADEI plum peeling or pickling machines enjoy international prestige simply for the great difference in quality and efficiency of the pitter, in addition to the lower cost than the competitors. The quality and efficiency of the ginning of this machine is only comparable to the manual stripping.

Its advantages in relation to old machinery have been fully demonstrated with several new customers, who, before making the decision to change their old machines for modern ones, chose to buy only one FADEI product and do the comparative analysis for one and two years, in order to be completely confident of moving from old technology to modern and efficient technology, not only in Chile but other clients around the world.

Today our market share is comprised of a percentage for new processing plants and another large percentage for the replacement of old machines.

Our subsidiary in Chile (MP Chile SA) guarantees the provision of spare parts and services, in addition to an 24/7 online service, not only for customers in Chile, but also for the rest of the world.

020

021

Sector numbers

Sector numbers

Chilean Prune Worldwide Export

Number of destination countries of Chilean exports

Annual figures YEAR

UNIT

VOLUME

ANNUAL VARIATION

FOB IN $USD

ANNUAL VAR.2

MID. PRICE

2019 2018 2017 2016 2015 2014 2013 2012

Net Kgr. Net Kgr. Net Kgr. Net Kgr. Net Kgr. Net Kgr. Net Kgr. Net Kgr.

65,092,533.00 71,890,422.00 76,173,803.00 69,792,480.00 64,084,454.00 64,102,293.00 62,139,139.00 75,101,394.00

- 9.46 % - 5.62 % 9.14 % 8.91 % -0.03 % 3.16 % -17.26 %

145,001,953.00 163,009,603.00 174,488,640.00 157,537,849.00 199,897,255.00 231,663,573.00 149,910,786.00 139,071,623.00

- 11.1 % - 6.5 % 10.8 % -21.2 % -13.7 % 54.5 % 7.79 %

2.23, 2.27 2.29 2.26 3.12 3.61 2.41 1.85

79 76 72

2012

SOURCE: ODEPA, March 23 of 2020.

68

2013

80

+79

2017

75

72

2014

N°

2015

2016

2017

2018

2019

SOURCE : Aduanas

2019 volume organic dry plums 156,517 kg. Net.

Exports per month in 2019 PRODUCT SACH Code Value Volume Value Volume

Volume (kg.)

FOB in USD

1

Country USA

11.403.741

20.144.522

2

México

9.703.029

20.064.619

3

Poland

6.699.979

14.757.749

4

UK

6.117.293

14.766.916

5

Russia

5.398.916

11.727.596

6

Germany

4.751.386

12.194.167

7

Italy

4.714.793

12.784.091

8

Brazil

3.825.693

5.047.583

9

Spain

3.659.222

11.074.386

10

China

2.047.166

3.191.756

79.597.183

173.622.076

Annual exports

DRY PLUMS 8132090 Value in thousands of US dollars (EE.UU.) and volumes in kilograms January February March April May June 11,082.02 9,514.45 5,733.55 6,033.57 12,632.29 9,302.02 4,829, 045.00 4,353,204.00 2,583,851.00 2,722,929.00 5,560,660.00 4,192,040.00 July August September October November December 13,829.95 17,042.77 15,200.74 17,442.14 12,859.29 14,747.06 6,265.990.00 7,544,952.00 7,126,125.00 7,851,666.00 5,813,553.00 6,405,035.00

Destinations Ranking

2018 N°

thousands kilos

Country

Volume (kg.)

FOB in USD

1

Mexico

9.353.551

18.110.418

2

USA

8.224.482

16.915.072

3

Poland

7.199.138

14.114.263

4

UK

6.707.996

15.181.722

5

Germany

5.262.787

12.233.600

6

Rusia

4.407.277

11.666.549

SOURCE: prepared by ODEPA with information from the National Customs Service.

7

Spain

3.901.311

10.282.892

Figures subject to revision by reports of value variation (IVV).

8

Italy

3.093.738

3.441.610

9

Australia

2.956.909

4.854.789

10

Venezuela

2.902.793

9.352.129

Worldwide plum consumption (TON) 80

Annual exports

79,597

78,074

N°

72,878

70

64,912

66,148

68,697

67,236

60 55 50

45

40

2012

2013

2014

2015

2016

2017

2018

162.853.274

2019

75,673

75

65

75.672.954

2019

SOURCE : Aduanas

10 , TOP the s US e M av d A le T an - US , 2 2 2 M 1 a ve 18 , with ly h ios. n 20 . the as i d Ita , 617 , s n 2 rat o a a c g xi ed /K ain - M e s ol id a t OB .

- Sp st F mer y n e o u b s c is ntl the c on e st ifica e in la r g a s ig n lum o n v i ts - Ch es i eas 018 . i nc r to 2 n o i t a l e r

Country

Volume (kg.)

FOB in USD

1

México

8.945.902

17.931.723

2

Poland

6.565.251

13.080.325

3

Russia

6.536.416

12.876.931

4

UK

6.068.480

13.231.308

5

China

5.370.724

9.554.857

6

Germany

4.363.822

11.384.768

7

Italy

3.287.665

8.802.568

8

Brazil

2.496.924

2.831.962

9

Spain

2.123.139

6.554.380

10

Netherlands

1.603.513

3.529.319

68.697.263

145.050.176

Annual exports

SOURCE : Aduanas

022

023

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