'Organic palm oil is growing faster than conventional': Alcopalma CEO on opportunities for growth
Alcopalma started out in the 1960s as a palm oil plantation and built its first mill in 1972. With an annual output of around 50,000 tons of palm oil, it is now looking to diversify its portfolio by producing organic and sustainable oil.
Last year, Alcopalma built a new segregated mill on Ecuador’s south coast exclusively for palm oil that is organic and certified sustainable by the Roundtable on Sustainable Palm Oil (RSPO).
“The market for organic palm oil is growing at a faster rate than conventional. We see a market opportunity there to increase the share of organic palm oil [grown] in the region,” said the company’s CEO Alejandro Figari.
Currently, 100% of production from this mill is certified according to EU, USDA, and Ecuadorian organic standards, while it expects to have its RSPO certification by January 2020.
The company plans to have the first shipment of RSPO organic palm oil ready for the start of 2020 with an initial capacity to produce around 9,000 tons of certified oil.
“It’s around one-fifth of our total production, but we definitely have the capacity to grow and we want to grow,” said Figari, who is also vice president of Propalma, the trade group that represents the interests of the Ecuadorian palm sector.
“Next year, our big export project is organic production because that will be 100% sold to Europe and the US. We are also seeing some interest from customers in Asia,” he said, adding that organic palm oil was “too premium” for most Latin American markets.
Figari: Latin America has less 'palm oil prejudice’
Nevertheless, Figari sees promise for conventional palm oil in Latin America.
Around 80% of the palm oil Alcopalma produces is exported, mostly to Colombia and Mexico with smaller quantities going to Europe and the US.
“I think palm oil has a lot of potential to grow here," he told FoodNavigator-LATAM. "If you look at the consumption per capita, there are big opportunities to grow in Colombia, Peru, and Mexico.”
Part of the reason for this is palm oil’s versatility from food to fuel to cosmetics, he said, and its relatively neutral image among consumers.
“The main applications for palm oil in Latin America are food and biodiesel, and food is the biggest by far. The chemical industry is not very developed here so we don’t see a lot of applications in cosmetics.
In terms of perception, there is less prejudice here in Latin America than in the rest of the world. I’ve seen lots of bad press, especially in Europe, but we don’t see that here.”
Alcopalma has around 2,000 hectares of land that produces less than 10% of its total output. It sources the rest from around 700 smallholders and medium-sized growers.
Its total production is around 40,000 tons of crude palm oil although this year, output fell as palm yields were badly affected by dry summers and bud rot disease.