PLOWING FORWARD

Costa Rica 2019 | AGRICULTURE | INTERVIEW

Grupo Pelon grows and manufacturers premium agricultural products for export, but faces challenges from competitors who can produce atlower costs.

Ricardo Castro
BIOGRAPHY
Ricardo Castro has been part of Grupo Pelon for almost 20 years and its General Manager since 2016.

Why are local value-added products on the shelves more expensive than imported ones?

We are losing competitiveness due to labor, energy, and logistics costs, adding to a lack of infrastructure. We have to find the markets where we can compete based on the premium position of our products such as pineapples, bananas, and coffee.

What initiatives is the private sector taking to position your products in order to make them competitive?

We make our products more competitive through niche targeting and value-added products. For example, our company Alimentos Kamuk Internacional specializes in exporting hot sauce. We take advantage of what we have here with tropical fruits nearby, a competitive glass industry, and a skilled labor force, as such a fruit sauce requires a certain level of manual labor. We have been able to market and sell a high-quality niche product to many countries around the world while our competitors still sell red hot sauce like everyone else. Five years ago, we started moving our own rice production to become pesticide free, which is an interesting case, as we are still in commodities but are differentiating our product to the rest of the world by being the first rice producer to obtain the carbon neutral certification. We also produce our own electricity with rice husk byproducts.

How have you managed to gain the trust of end consumers?

We have maintained our quality-based brand vision for our entire 70-year existence. Through varying challenges over time, we have invested in technology, such as electronic grain sorters, to remain at the top of market. We have also maximized the efficiency of our trade logistics with the other companies in the group and enhanced quality discipline, best practices, and certifications that are mandatory if we want to compete around the world.

What are your current expansion plans?

We want to get closer to our end customers and are investing in the diversification efforts of Disal, our food distribution arm. Our plan is to improve the positioning of our brands whilst reducing our economic risks by including a wider range of products from other local and international producers and commercializers. We recently built a new plant for Kamuk and are invested in making that grow, as we see a great opportunity to explore that niche.

What CSR projects are you involved in?

To support our carbon neutral project, we maintain a 3,000-ha forest with protection against fires or hunters. From our own 4.5-MW power plant, we send the excess to the national grid for local communities. We have a major aquaculture project within the same facility and a minority stakeholder position in that company, the main fish exporting company in Costa Rica. Since rice production is water intensive, we source our water from Lago Arena and use it first for our aquaculture activities. We then reuse this water and pass it down to sugarcane producers before diverting it down to rivers and oceans, which means we do not take water from the ground in the form of wells to irrigate our site. Socially, because our company started before there was national road access to our community, we provide housing for at least 50 families at low cost. Most of them are former workers who have a long history of working in the company. We have a unique combination of work and home atmosphere in our main production plant because many workers live in the community the founders built many years ago. The workers also enjoy a close relationship with the owners who have always led with a hands-on approach. Some of our neighbors are also rice producers who switch between rice and sugarcane when one business is doing better than the other. When they produce rice, we finance, buy, and provide technical assistance.