Hortifrut's strategy in Peru ...
The merger of the Chilean company Hortifrut and Tal SA, Peru's leading blueberry producer, is by far the largest commercial operation in the agro-industrial area of Chile and Peru. This transaction seeks to transform the Chilean company into a platform that supplies berries to the world during the 365 days of the year.
Hortifrut's growth strategy permanently seeks to become a global platform, bringing together the best blueberry producers in the world with the best customers from five continents and keeping them constantly supplied with fresh fruit during the 52 weeks of the year.
In this perspective, Peru is considered vital by the Chilean company, because in this country the season of agricultural crops is more extensive, it takes place between August and December, which allows filling the empty production windows and maintaining continuity in the supply, which is its main objective.
According to some analysts, Peru has outstanding competitive advantages to produce blueberries of high quality and low cost, this makes them predict that this country can become one of the major exporters of blueberries in the coming years.
Another benefit of the pact is that in Peru the best area for the production of blueberries is the province of Libertad, where Trujillo is located, an area where both companies have plantations. The town is desert, but it has good water quality, which comes at much more convenient prices than in other areas.
Long relationship
The merger of the Chilean company Hortifrut and Tal SA, Peru's leading blueberry producer, is by far the largest commercial operation in the agro-industrial area of Chile and Peru. This transaction seeks to transform the Chilean company into a platform that supplies berries to the world during the 365 days of the year.
In the case of this merger, the talks between the parties began a few months ago in Peru, but this relationship began in the middle of 2011, when Tal SA and VitalBerry began a commercial relationship to pre-mature and market avocados in the US. From that date they began to analyze possible scenarios in the blueberry business that began to develop the Rocío Group in Trujillo, in northern Peru. Then Hortifrut merged with VitalBerry in the 2013 year, and the following year Hortifrut and Tal SA created Hortifrut Tal SAC. With this operation Hortifrut definitively entered the Peruvian market.
Global platform
The strategic desire to become a platform for the permanent supply of berries to world markets has been the objective sought by the families Moller, Elberg, Swett, Novión and Del Río, owners of Hortifrut. This strategic objective would be ensured with the operation carried out with Grupo Rocío, the largest blueberry exporter in Peru. This Economic Group, founded by Rafael Quevedo, is also the main player in the poultry, livestock and dairy fields of Peru, with more than 50 years of experience.
The operation, in particular, is the signing of a document of agreement between the Chilean company Hortifrut and Peru's Tal SA and El Rocío, for the purchase and merger of its blueberry business. In the document, the Chilean company agrees to pay USD160 million in cash and, in addition, Peruvian companies would keep the 17% of Hortifrut. The agreement establishes other payments and commitments that would entitle a payment equivalent to the excess after taxes on USD281 million accumulated operational net flow in a period of five years, discounting the investment of capital and maintenance.
"This investment fills us with pride and consolidates us as a leading global platform and of enormous strength the 52 weeks of the year"Víctor Moller told La Tercera, when he announced to the press details of the agreement.
Against the announcement, the market immediately responded satisfactorily, as Hortifrut shares soared more than 7% on the Santiago Stock Exchange, with a daily rise of more than 4%, accumulating a rise that rises above 54% in the annual total.
Source: Martin Carrilo O. - Blueberries Consulting
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