José Antonio Weiffenbach F.Jucosa General ManagerChilealimentos Director

Chilean Juice Industry

AGENDA

1. Food Industry in Chile

2. Chilealimentos

3. Chilean Juice Industry

AGENDA

1. Food Industry in Chile

2. Chilealimentos

3. Chilean Juice Industry

Chile: FoodPower

Chile: FoodPower

Chilean General Food Industry

faces a historicmoment

Source: ODEPA, Central Bank and Chilealimentos. Projections based on Sofofa, January-July

2003 2004 2005Copper 7.720 14.344 16.571

Food 5.976 7.111 8.120Forestry 2.524 3.363 3.817

Others 4.826 6.642 10.838TOTAL 21.046 31.460 39.346

Today it isthe Second export

US$ Millions

leader of the country

7,720 7,11

1

Source: ODEPA, Central Bank, Business Associations and Chilealimentos (decimal values of approximate %)

Processed Foods

1.140

Fresh Fruit 2.098

Wine 1.000

Salmons 1.583Other sea products

977

Meats 641Others 981

MM US$

US$ 8.120 millions

We are all part of2005

26%

12%

8%

Processed Foods Sector: Exports for more than US$2.000 millions by 2010

Others

Meats

Other sea products

Salmons

Wines

Fresh Fruit

Processed Foods

a privileged country:Chile is

Factors that helpFood Offer

Geographic advantages...

1. Mediterranean Weather Between 30º and 45º of latitude. West of continents. Rains in winter and dry summers.

2. “Ecologic Island” Natural barriers for diseases

North: Desert

South: Antarctic

East: Mountains

West: Ocean

Acquired Advantages...

Free trade Agreements: Chile has signed free trade agreements with the 75% of the PIB of the world.

1.

Commitment of private sector:Market oriented.

2.

3.

Stability of our public and private institutions: Chile has the lowest risk of Latin

America.

AGENDA

1. Food Industry in Chile

2. Chilealimentos

3. Chilean Juice Production

Chilealimentos, Association of Food producers in Chile

• We are working since 1943• 50 members• Products: • Fruit and vegetable processing:

Canned fruit or vegetable, Dried Fruit, Frozen Fruit, Fruit and vegetable juice

• Cookies, Chocolates, Fish

Convert Chile in Food Power

Mission

AGENDA

1. Food Industry in Chile

2. Chilealimentos

3. Chilean Juice Production

• More than 30 years of experience. Exporting juice concentrates since 1975

• More than 630 temporary jobs per month

(peak at more than 1.000) and 700 permanent jobs.

• 166 thousands built square meters.

• Evaporation capacity: 310 ton/hour water. (70% used in AJC)

Chilean Juice Concentrate Industry

• Technological Improvements in all the

production stages = highly competitive quality.

• More than 98 manufacture products.

• The 95% of the production is destined to export

• Since 2000 consolidation in the industry

Chilean Juice Concentrate Industry

•Regional presence

Source: Fepach, Catastro Agroindustria 2001

Juice facilities per Region

Region IV V RM VI VII X

Nº 2 2 3 2 4 2

Chilean Juice Concentrate Industry

The industry processes more than 600.000 tons of raw material every year

01234567

Fac

ilit

ies

0 - 10 10 - 20 20-40 40-100 +100 Mton Processed

Chilean Juice Concentrate Industry

• The factories produce basically apple and grape juice concentrates. In the last period the processing of berries has grown.

• Crushing capacity:

200 ton/hr apple basis 430 ton/hr grapes basis 85 ton/hr berries basis

• The apple juice concentrate processing plants work generally from March until September and crush

350.000 to 430.000 tons of raw material.

• There are a potential to process 650.000 tons of fresh apples.

Chilean Juice Concentrate Industry

Años0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

'00

'01

'02

'03

'04

'05

0

20

40

60

80

100

120

140

TON MILLION US$ FOB

Source: Chilealimentos

Exports of Juice Concentrates 1981 - 2005

41%

21%

22%

5%

3%

2%

1%

5%

Apple

Grape (juice and must)

Berries

Plum

Pear

Red Bell Pepper

Peach

Others

Exports of Juice Concentrates

On 2005 concentrated juices of 24 species of fruits and vegetables were exported .

Source : Chilealimentos. Participation in terms of value

61%17%

7%

4%

3%

2%

1%

5%United States

Japan

Canada

European Union

Mexico

South America

Russian Federation

Others

Exports of Juice Concentrates

Chilean juices came to 45 countries during 2005

Source : Chilealimentos. Participation in terms of value

50.000

52.000

54.000

56.000

58.000

60.000

62.000

1999 2001 2003 2005

-10,0020,0030,0040,0050,0060,0070,00

Tons MM US$ (FOB)

Exports of Apple Juice Concentrates

Chilean AJC Destinations

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2001 2003 2005

Others

European Union

South America

Canada

Mexico

Japan

USA

• Total Apple Chilean Production

1.300.000 tons of Apple

• Uses of Apple• Fresh Market for Export 53%• Domestic Fresh Market 7%• For Processing 40%

– Pulp and Dehydrate 10%

– Juice Concentrate 30%

Apple Production

• Chilean Apple Juice Concentrate Production is base on Fresh Apple Production for Export

– No Phytosanitary issues

– The availability of raw material is guarantee

– Reasonable price of raw material (The growers do not depend on fruit for juice)

Apple Juice Concentrate Production

Final Considerations of Chilean Juice Concentrates

• Chilean juice concentrate industry found a niche in the market, due to its limited production (compare with other countries)

• Chilean juice concentrate industry is highly reliable supplier in quality and price

• Chilean apple juice concentrate producers have been able to compete with the heavy growth of China.

• How?• High quality standards• Flexibility of costs• Efficiency• Market defense and opening new markets (FTAs)• Consolidation• Creativity

THANK YOU