The German Development and Investment Bank will grant a $19 million loan to Cooperativa de Productores de Leche Dos Pinos R.L., part of which will be invested in modernizing and expanding two production plants.
Other projects to be financed with the proceeds will include the renovation of the cold chain infrastructure and improving efficiency in the use of resources during the production process.
As a result of the blockade that has been in place since July 2020 on the entry of animal products from Costa Rica into the Panamanian market, Costa Rican exports to Panama are reported to have fallen and companies such as Dos Pinos are reporting losses in the millions.
The trade conflict began when Panama informed the National Animal Health Service (SENASA), an agency of Costa Rica's Ministry of Agriculture and Livestock (MAG), of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been trading in the Panamanian market for many years.
As a result of the pandemic, the consumer habits of Costa Ricans changed, a phenomenon that was evidenced in the forms of consumption of ice cream, which is now more frequently consumed in homes.
In the new commercial reality, the consumption of individual ice creams was considerably reduced and in the case of multipacks, sales increased. This change is due to the fact that nowadays people spend more time in their homes and prefer to consume this type of products at home.
As a result of the closure of Grupo Lala's factory in Costa Rica, the 37 thousand liters of milk that 70 local producers sold daily to the company of Mexican origin were left without a buyer, however, Dos Pinos promised to acquire the product.
On December 1st Grupo Lala informed that it will close the milk plant that operates in the province of Alajuela. According to the company, the factory will stop operating on December 11th.
After Grupo Lala decided to close the operations of its dairy production plant in Costa Rica, a debate began over whether Dos Pinos' dominance in the local market was due to protectionist policies or to the brand positioning, quality and price of its products.
Due to weak competition in the local market, the prices of goods and services in the basic basket are significantly higher in Costa Rica than in nearby countries.
A report by the Organization for Economic Cooperation and Development (OECD), called the "Economic Study on Costa Rica", concludes that consumers in the country pay higher prices for milk, rice, vehicles and Internet services.
In the context of the current health emergency, Costa Rican companies working in the production of food and cleaning supplies have had to considerably increase their operations to cover the growing demand.
The covid-19 outbreak caused consumers to increase spending on basic necessities such as food and cleaning supplies in recent weeks, forcing companies in these sectors to work overtime, invest in equipment and hire more workers on a temporary basis.
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.
The Ministry of Economy found that Costa Rican Dos Pinos had dumped, but ruled out sanctions, arguing that no damage was caused to sales or local production.
The investigation process was carried out by the Ministry of Economy of El Salvador, derived from the complaint filed in 2017 by the Salvadoran Cooperativa Ganadera de Sonsonate, de RL de CV against the Costa Rican Cooperativa de Productores de Leche Dos Pinos and the local distributor Comersal.
Dos Pinos and Distribuidora Corripio invested $30 million in the construction of a plant that has an area of 8,500 square meters and a packaging capacity of 250,000 liters per day.
The Costa Rican Cooperative of Milk Producers Dos Pinos and Distribuidora Corripio, founded the Caribbean Dairy Group, being their first joint investment the construction of the new industrial plant, which will produce 50 varieties of dairy products, juices, nectars and soft drinks of the Dos Pinos and La Granja brands.
Although exports have tripled in the last three years, mainly because of increased sales of medical equipment, sugar, ethyl alcohol and meat, the business sector's expectations are not as optimistic.
Data from the Foreign Trade Promoter (Procomer) specify that in 2016 Costa Rican exports to China totaled $46 million, in 2017 registered $111 million, and in 2018 rose to $200 million.
Alimentos y Bebidas Atlántida in Guatemala, Mayca in Costa Rica and Nestlé Panama, are part of the companies reporting the highest numbers of purchases of food preparations in Central America.
An analysis of CentralAmericaData's Trade Intelligence unit provides details on the companies according to sector, main activity, volume and value of their imports, exports and other relevant data.
In El Salvador, the Ministry of Economy has started an investigation into alleged dumping practices, after Cooperativa Ganadera de Sonsonate filed a complaint against the Costa Rican company Dos Pinos.
The Ministry of Economy ordered an investigation into alleged anti-competitive practices in the dairy products market, specifically related to sales of fluid milk, in the period between July 1, 2016 and June 30, 2017.
The Latin American Bank for Foreign Trade has granted Dos Pinos a syndicated loan of $100 million over five years, for three of the companies belonging to the cooperative.
The loan to Cooperativa de Leche Dos Pinos was structured as a "Club Deal" between Bladex, Banco General, S.A. and Banistmo, S.A., who acted as co-structurers.Bladex also serves as the Administrative Agent at the facility.
In Costa Rica, changes in consumer trends have led beverage companies to expand their product portfolios with juices and soft drinks with low calorie content.
Companies such as Florida Bebidas, Coca Cola and Dos Pinos have started to expand their range of carbonated and non-carbonated beverages to include low-calorie products, with the aim of meeting a demand that has been growing in recent years.
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