While a group of manufacturing companies decided to reduce their operations in Costa Rica, arguing that local production costs are high, another group of companies in the sector decided to increase their investments.
According to the most recent official data, during August 2019 the growth of economic activity in the manufacturing sector was 2.5%, explained by increased external demand for products from special regimes companies, particularly medical implements and steel products such as bars and sheets. This contrasts with the decline in manufacturing activities for the domestic market. See report of the Central Bank of Costa Rica.
In Costa Rica, the pig farmers' association has filed a complaint alleging that importers such as Walmart, Cargill and Sigma Alimentos are manipulating pork prices in the local market.
The Costa Rican Chamber of Porculturists (Caporc) filed a complaint with the Consumer Protection and Advocacy Commission (Coprocom), arguing that "...three multinational companies make up 65% of total pork imports, and that this concentration demonstrates significant market power that undermines free competition and market transparency."
In 2016, regional maize imports totaled $763 million, 26% of which was imported by six companies in Costa Rica, El Salvador and Panama.
Figures from the information system on the the Corn Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with the chart"]
The food producer plans to invest $30 million in the construction of a distribution center in Alajuela and $20 million on technology and computer systems.
The multinational and owner in Costa Rica of Cinta Azul and Pipasa Corporation, plans to start construction of distribution center in San Rafael de Alajuela in 2018, after finishing with the design process, procedures and permits this year.
The poultry industry in Nicaragua plans to initiate efforts to obtain certification so that its plants can start exporting chicken meat to the United States.
Since the certification process can take up to three years, the aim of the poultry industry is to start early in order to be ready to start exporting to the US market before the end of the period of tariff reduction set by the DR-CAFTA.
The Honduran firm Avinicsa has opened a chicken fattening farm in northern Mexico with an investment of $3.1 million and with capacity to produce 5.4 million kilos a year.
The company founded on Honduran Capital, Avinicsa, has announced the opening of a broiler farm in the municipality of Tipitapa (25 kilometers north of Managua) which will produce about 410,000 chickens a year. Roberto Suazo, president of the company, confirmed to Elnuevodiario.com.ni that the investment was $3.1 million.
Cargill has inaugurated a new cold storage and distribution plant southeast of Managua, with capacity to store up to 8 million pounds of chicken meat.
In addition to the new plant, in which $50 million were kkinvested, Cargill announced plans to invest $100 million over the next three years in three new projects, including a plant for shrimp food, in which it plans to invest $12 million.
This year the food producer plans to invest $50 million in its operations in Nicaragua, $20 million in Honduras and between $10 and $15 million in Costa Rica.
In Nicaragua the company will invest in building two plants and strengthening its distribution center, in Costa Rica it will be investing in improving logistics systems and in Honduras resources will be used for renewal of equipment. Additionally, in Costa Rica it plans to renew its distribution fleet, installing a water treatment plant and carry out improvement works in the cooling system of the plant in San Rafael de Alajuela.
Support is being given to sustainable agriculture programs to meet growing consumer concern about the origin of the raw materials of the products they consume.
From a statement issued by the Cosa Rican Foreign Trade Promotion Office (PROCOMER):
Cargill and Mondelēz International are promoting two programs to have a cocoa supply chain which is 100% sustainable by 2020. Cargill is doing the same through its initiative Cocoa Promesa and Mondelēz through its program Cocoa Vida.
Increased competition and rising production costs are causing firms in the sector to revive their production processes with new plants, equipment and electrical systems.
The three companies which dominate 92% of the market for chicken meat and its derivatives are making significant investments to modernize their production processes in an increasingly competitive world where consumption has maintained a steady upward trend.
In the past three years local consumption and exports have increased, however the number of companies selling abroad has been reduced.
According to figures from the Foreign Trade Promotion Office between 2010 and 2013 foreign sales of fresh and cultivated eggs increased 3.8 times, but were concentrated in the hands of a few.
The company announced that the center will operate in a free trade area and will provide support to subsidiaries operating in other regions.
The food producer with a presence in the region will install a center for support and services called "Cargill Business Services (CBS), from where it will attend to approximately 50 of its own companies operating in North, Central and South America in areas such as information technology, human resources, finance, transportation, logistics and strategic sourcing.
"Copersucar and Cargill announced an agreement to combine their global sugartrading activities into a new company which will have as its goal the generation, marketing and operation of crude and white sugar. The joint venture, in which both Cargill and Copersucar possess a 50% stake each, will have global presence. "
Loss of competitiveness in the region has been a constant factor in recent years due to problems in infrastructure, transportation and energy costs.
Although the sector's exports to Central America have maintained a relatively stable rate of growth, entrepreneurs say their products have lost competitiveness against the food industries in neighboring countries, due to the high costs of energy, transportation and infrastructure.
At least ten companies are competing in a market where the amount of tons sold between 2008 and 2013 grew by 24%.
In Costa Rica, the market for sausages is fought over by at least 10 companies, where Corporación Pipasa, a subsidiary of Cargill International, is the largest participant. Whereas in 2008 20.2 tonnes of sausages sold in, 2013, 25 tons were sold in the country.
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