180 STORES THROUGHOUT ECUADOR

Ecuador 2019 | AGRICULTURE | VIP INTERVIEW

TBY talks to Gustavo Wray, General Manager of Agripac, on cross-sector expansion, social responsibility, and product development.

Agripac has significantly increased its presence in the country. Could you tell us more about the company's advancement in recent years?

Agripac's new strategy is to go directly to end customers—farmers, shrimp producers, growers, and so on. Most of our growth has come from our own store's retail chain. In 2018 we have opened five new stores reaching a total of 180 stores throughout the country at the end of the year. In middle-sized cities like Quevedo and Machala, we are building larger stores and warehouses to provide farmers with our whole range of products like seeds, fertilizers, herbicides, fungicides and insecticides. In addition to our traditional products like shrimp feeds, chicken feeds, and cattle feeds, we have our own brands of dog and cat food: Buen Can and NutraPro which is a Premium brand. Both are produced in Ecuador and compete against imported products of multinationals. Nowadays, we are expanding our capacity with state of the art machinery to assure the quality and growth of our pet food line. In our agricultural division, we have a strong supply line for the production of maize, potatoes, vegetables, and flowers in the Highlands. For maize, especially, we have a program called “Maize Plan," where we provide producers with all their supplies—seeds, fertilizers, and chemicals. They plant and grow their maize, and after five months, they repay us with their harvest. Their production comes back to us as raw material for chicken feed, which consists of 50-60% maize. This way, we encourage a full production cycle.

What other products do you produce locally, and which products are imported?

Local products make up around 30-40% of our total sales, while the rest is imported. All our animal feeds are produced locally. Our factory for agrochemicals is located in Ecuador, from which we export to Peru and Colombia. Agripac shifted from being an import company 47 years ago to an agro-industrial company with its own factories and distribution channels. Currently, we have stores in the jungle as far as Lago Agrio to support the local maize industry as well as in the Highlands and the Coast—all stocked via our own logistics operations. We have developed a domestic supply chain for farmers and shrimp growers. We are primarily focused on Ecuador, though we predict to export to neighboring countries to grow through natural expansion. Five years ago, we had total annual sales of USD200 million, which has grown to an expected USD300 million for 2018.

How have you incorporated sustainability and social responsibility in your company's philosophy?

We take different actions in Social Responsibility. One of our programs is “La Escuelita," where we recruit recent graduates in agriculture for on-the-job training. We also provide free technical training to farmers to maximize their harvests. Currently, we are working on a project to develop online training programs for our farmers. Furthermore, we support local governments when they want to develop small farming projects in their regions. In terms of environment sustainability, we have launched a product line of organic products for the banana sector. With AeroAgripac, we are perhaps the only certified company that offers aero fumigation with a certified organic plane for organic plantations. Five years ago, we launched a dedicated committee for CSR, which has evolved into a focus group for sustainability. In coordination with the Ministry of Agriculture, we participated in a program called “Plan Semilla," which supports small farmers to grow their maize, rice, and other crops, providing them with seeds, fertilizers, and training to improve their productivity. The local Association of Agriculture supplies (APCSA) is now approaching the new minister to propose something similar, as collaboration between the public, private sectors and academia is very important for the development of our society. These programs should be transparent and provide real support to farmers.

How do you approach product development and innovation?

Ecuadorian companies in general do not invest much in research and development. In our case we are increasing our investment on this area through the development of the first Research Center for shrimp supplies in Ecuador; we have scientists from Europe working with us as well as Ecuadorean PHD experts.

How do you envision the agro- and aquaculture sector developing, and what does that mean for Agripac?

In the agriculture sector, products like maize, rice, palm and cocoa will continue developing; one of our advantages is that we count with the highest international quality standards for these traditional crops. Moreover, I believe that we should continue developing closer relations with international markets in order to know their needs and provide other agriculture products like exotic and tropical fruits. For example the global market for chocolate is demanding higher percentages of cocoa so we should take that opportunity. The aquaculture sector is still growing although its demand slowed down slightly during 2017 after an aggressive growth for seven years. We are permanently innovating and creating solutions for this sector in order to take new opportunities to grow.