Simplot invests $ 20 million to increase frozen potato exports

There was something – among so many – that Fabio Calcaterra I learned from known to, Franco Macri: the importance, for any Argentinian company, of the neighborhood with Brazil.

“The country needs its businesses to be designed for export. The local market is small and, in recent years, it has not been on a path of expansion, precisely. When investing in the food industry, you need to think about exporting. And having Brazil as a strategic partner is a huge opportunity: it is one of the most important economies in the world ”, he explains, in his dialogue with The Commercial Columnist.

Calcaterra translates into figures what this proximity means for your own business today. “Brazil is an importer of frozen crisps. She buys 80% in Argentina and Europe. This is a total market of 600,000 tonnes per year, 600 million US dollars, with double-digit annual growth, ”he explains. The majority of Simplot Argentina’s production goes to this country, the company chaired by Calcaterra, which plans to almost double its production this year.

Brother of Angelo, cousin of Mauricio, Fabio has been tracing his own path in the food industry for a quarter of a century. In particular with the production of frozen potatoes, a company in which it entered into in 1995 with one of the main manufacturers in the country, Farm Frites. Its present is, quite simply, Simplot Argentina, joint venture with JR Simplot, an American giant with annual sales of US $ 8 billion, founded over 90 years ago in the state of Idaho.

Nowadays, society started a cold storage center in its factory in Lujn de Cuyo, Mendoza. It was a US $ 20 million investment, which incorporates the US $ 150 million budgeted plan for the plant, inaugurated two years ago, and which exports 75% of its production. With Brazil as the main market, it ships to Chile, Uruguay, Colombia, Bolivia and Peru.

“It is 24 meters high and is fully robotic,” describes Calcaterra during its recent inauguration. “Until now, what came out of the factory arrived in Buenos Aires. Some of it, in its own warehouse and another, in a rented space in a refrigerator. Now, With the storage center in the same factory, we will optimize logistics and do customs ah, for our exports. We will become more efficient. It greatly improves our functioning. This will also allow us to better plan production, ”he explains.

This year, Simplot will produce 90,000 tonnes of frozen potatoes. That’s almost double the 50,000 of 2020. While it was his target for last year, succeeded in achieving this goal through sales in Asia and other countries outside South America, which offset the region’s decline due to the pandemic.

“The idea is that, post-pandemic, everything is focused on South America. With Brazil as the main market, ”he emphasizes. Simplot is one of the leading suppliers in the region of fast food chains, such as McDonald’s, Burger King and KFC. “Todava, we have a 20% or 25% margin to grow“, he rocks.

This year, the company will have a turnover of 100 million dollars. “By increasing this 20%, 25%, in 2022, we will be able to reach 120 million US dollars, with 100 million US dollars in exports, which we had planned when the plant was inaugurated”, a- he declared.

Even if the engine of this increase will be foreign sales, the 25% of its production destined for the domestic market is also growing. Present in all the major supermarket chains, it mentions a 25 of market share and gndole. “The goal is to increase it. More and more,” he suggests.

However, The insurance to prevent this increase in local sales from being diluted in the balance sheet due to currency effects is export.

“It’s a long-term investment. Everything we did was planned four or five years ago. With this project we started seven years ago. Then, like any investor, we must adapt our plan to the economic variables of the moment. Without this adaptability, it is impossible“, to define.

“The fact that the structure of the income matrix is ​​that of exports compensates for the problems of lack of predictability,” he adds. It is competitive its export with the current exchange rate? “Today you are here. In recent months, inflation has exceeded devaluation. There was a little delay in the exchange“, answer.

The capacity to adapt is not the only thing that justifies the country in conversations with its American partners. “The climatic and qualitative conditions of potato production in Mendoza are decisive. Also, the human resource, which is extraordinary, ”Calcaterra explains.

At the Lujn de Cuyo factory there are 180 people, three teams. They are added to the over 270 who work in its administrative, logistic and commercial operations in Buenos Aires. As, a third of the potatoes she processes come from her own fields in Mendoza. The remainder, coming from producers in the same province and, as needed, from Crdobe and of San Luis.

The construction of the new storage center required the incorporation of technologies and machinery imported – mainly from the United States – via 150 containers, many of whom arrived via Chile, after crossing the Cordillera.

“Work began as soon as the plant was inaugurated. But he was delayed by the pandemic. Not just because of the teams. There were people who had to come from outside, for all the automation. It took a long time, ”Calcaterra explains.

The pandemic – or its evolution – will also determine the pace of the project’s next steps. “The first thing to see is when it ends and what’s left. That there are prospects for growth is a very positive thing. But we’ll have to go through next year, a year and a half, and see what the new normal is“He watches, cautiously.

“There will be more demand for basic products and the food. This may make it possible to consider new expansion projects. But, for now, we cannot determine“, this indicates.