Brief project description

The search

Chile is the greatest fruit exporter of the world since year 2005, Italy being the second. In Chile we have a friend who owns one of the most important companies of frozen fruit and other high value food goods for export. He recommended us to invest in Blueberries as it is safe and good investment with present and future perspective. He added that in the USA many people invest in blueberry farms for retirement. We researched for a year by travelling to Chile, Argentina, Uruguay and Spain to investigate everything related to the blueberry business . We visited about 70 blueberry producers, we got into contact with universities, professionals, plant nurseries, packing houses, exporters, forwarders, buyers, and so on.

Therefore, we have a viable business plan. In our case the IRR (Internal Revenue Rate) is over 70% at the least, and as regards current fruit price far over 100%.


Why Blueberries?


It is an off-season fruit for the fresh market. Its price is very good and the market demands have been increasing for the last years. The demand perspective is very positive and the price has stayed high for many years. We can say that there is a good price horizon for at least 10 years. Even if the price goes down because of the increasing fruit offer, the price floor is sufficiently good to take risk on such investment. That is why 10 years is time enough to payback the investment.

Blueberry cultivation maintenance does not give great problems. The plants live 40 or more years.

Blueberries are not affected easily by disease if handled correctly. We have seen failed projects because of poor preparatory preplantation work. For this, a good technician is crucial.

The care of the plants requires one worker every 1.5 hectare and during harvest time 20 or more.

As the fruit is affected by delayed frosts and possible hailstorms the location of he farm must be carefully chosen. We need to add that the quality and quantity of the water supply is a limiting factor for this plant.

Blueberries take from 5 to 7 years to grow, but the first small harvest occurs on the second or third season. In 2007 it is possible that the USA will allow our country to export blueberries there. Anyway, our country has already exported small fruit amounts to Europe at good price and quality success. Most of the harvest can be sold at the producers farm, bought in situ by forwarder companies.

What is much more interesting yet is getting a direct client. Forwarder companies get the same profit as producers, but without any investment risks. We are making contacts with Europe, mainly Germany, and they are interested in making deals with small fruit amounts and if all the conditions are granted establishing a regular commerce.

Why Uruguay?

The Uruguayan tax system is very advantageous for blueberry growers:

The fruit has no export taxes as in Argentina (10%).

The workers total costs are the lowest of the MERCOSUR countries.

In case the Uruguayan government changes the laws or/and taxes, investors have the possibility to export through the various TAX Free Zones of Uruguay. It is possible to invest thruough a so called Anonymous Society which is an anonymous share holder company .

Being Uruguayan tax system the lowest of the region it turns the country into the most competitive and ideal for this type of investment because if the fruit price goes down to a loss point and force our competitors to get out of market, we will still be gaining a respectable profit.Uruguay seems to be a very good and competitive market player.Uruguay has from good to very good conditions for growing blueberries.

What do blueberries need to grow?

1) Light and acid grounds.

2) If the ground is not the ideal it is possible to be improved with amendments and chemistries.

3) Very good water quality. This is an important project limitant.

4) Little wind conditions. This is a problem to be solved in most of the cases because Uruguay is a windy country.

5) Delayed frosts that affect the fruit. The plant requires cold temperatures below 7 Celsius degrees, according to the planted variety (in our case, 200 to 400 hours).

6) It needs full sun.

7)Fertilization is simple and inexpensive.

The blueberry business in numbers.

Investment for one hectare: between 25,000 and 35,000 US dollars. The investment falls if the planted area is greater than 5 ha.

Necessary infrastructure: it depends on the project, but in general about 40,000 to 70.000 US dollars. You need a barn, a house, a tractor and so on.

Cost of maintenance by hectare: 10.000 US dollars annually, all inclusive. The greater the project, the lower the costs. Investment scale seems to be a good idea, but it involves a big capital effort.

2006 season sale prices before taxes: 12 to 19 dollars for one kilo

The minimum economic unit we have studied is about 10 hectares. With 25 hectares or more you become an independent player.

The plants have to be bought one year before plantation, with a down payment of at least 30% as there are no plants in the market.The plants come from Argentina, Chile, the USA and now Uruguay.

The average of production by hectare in Argentina is of 6,000 kilos or more for early varieties.

The average production by hectare for technically well done projects is between 8,000 and 12,000 kilos. We have record of a production of 18,000 kilos in Chile, and 15.000 kilos in Tucuman/Argentina.

On our farm ee estimate that we will be having about 10,000 kilos of fruit per year, after 5 or 6 years as the plants are growing fast and strong.


The project

After making a deep analysis of all the Uruguayan territory, we reached to the conclusion of choosing the zone of Laguna del Sauce, the land strait between the lake and the ocean. Being between two water surfaces assures the optimal (mild) climate for the plantation. We have also 3 types of water, we reach here 60 meters above sea level and the land is a former farm of citrics. We are located along the so called ruta Interbalnearia We own a 6 hectare farm with 14,000 imported plants from Argentina that were planted in August 2004.

The verified growth of the plants is very good. Since we have had so many tourists visiting our farm and getting really interested in investing in blueberries , we got to the conclusion we should offer them good investment opportunities by offering planted lots, shares or plants in pots.

Our company plants the blueberries on a keyturn basis and offers to take care of the lots.

We are looking for joint-venture partners for this service business. The total investment will be about 200,000 US dollars. We are ready to sell up to 50% of our actual company for U$S 8.000 each share (1%) Each share will return between $2.500 and $ 4.500 dollars each year after two or three years.