October 21, 2008
Chile Food and Drink Report Q4 2008 Highlights The Tremendous Opportunities Offered By The Country’s Dairy Sector
Research and Markets (http://www.researchandmarkets.com/research/244eba/chile_food_and_dri) has announced the addition of the "Chile Food and Drink Report Q4 2008" report to their offering.
Chile Food Drink Report provides independent forecasts and competitive intelligence on Chile's food and drink industry
The Chilean dairy sector has been growing strongly in recent years fuelled by growing international and domestic demand. The sector has recently been the subject of international investment and foreign firms are likely to continue to show an interest given the country's relatively inexpensive dairy land, cheap labour and numerous free trade agreements with countries where demand for dairy products is growing rapidly.
In April 2008, New Zealand-based dairy giant Fonterra paid US$201.9mn to increase its holdings in Chilean dairy firm Soprole. Fonterra purchased an additional 42.6% share of the Chilean firm, taking its stake in the company to over 99%. Fonterra is looking to take advantage of Chile's low dairy production costs. Dairy land can be acquired for around 40% of the cost in New Zealand and cheap labour remains abundant. With dairy production still fairly labour intensive, the availability of low-cost labour remains a key driver of investment in the sector.
Fonterra has been successfully promoting New Zealand-style farming systems which have helped boost the level of milk production. These intensive farming methods, combined with relatively low costs have made Fonterra's Chilean subsidiary one of the firm's most profitable overseas assets. Chile has now become an important part of Fonterra's export strategy with the Chilean subsidiary exporting dairy products to the rest of Latin America and beyond.
The success of Chile as a dairy exporter is highlighted by the country's trade statistics. Between January and May 2008 the country exported US$106mn worth of dairy products - an increase of nearly 40% on the same period a year ago. This success was driven by the greater industrialisation of the sector with powdered milk now accounting for 33% of total exports. Powdered milk is now close to overtaking Gouda cheese as the country's most valuable dairy export. Powdered milk offers many advantages to dairy exporters; it is easy to store and transport and has a large number of export destinations thanks to its ubiquitous use in many food products.
Other firms that are currently investing in Chile's dairy industry include Swiss-food giant Nestle and local firms Mulpulmo and Colun. All have recognised the tremendous opportunities offered by the country's dairy sector and with the country offering so many comparative advantages, we foresee this high level of investment to continue for a number of years to come.
Key Topics Covered:
Latin America Food & Drink Business Environment Ratings
Latin America Food & Drink Business Environment Ratings Q4 2008
Chile's Food & Drink Business Environment Rating
Global Food & Drink Business Environment Ratings
Food And Drink
Chile Food And Drink Industry SWOT
Mass Grocery Retail
Chile Mass Grocery Retail Industry SWOT
Concha y Toro
For more information visit http://www.researchandmarkets.com/research/244eba/chile_food_and_dri