Growth from the South: The challenges and success of the Chilean swine industry

10/20/2016

In an interview performed by PIC, Rodrigo Castañón, General Manager of the Association of the Pork Producers of Chile (ASPROCER), shared with us his perspective on the opportunities and challenges within the Chilean industry.

Through an investigation of every element that shapes pork production in Chile, Rodrigo Castañón presented a full analysis of the market reality from this country in the southern hemisphere. He also explained how the Chilean producers have faced these challenges in the swine industry.

For the executive of ASPROCER Chile, the challenges and opportunities they have identified in the pork sector came from the field of health, safety, and sustainability to facilitate and increase foreign trade.

"Regarding Health and Safety are some of the main pillars of the competitiveness of the industry. The Association of Pork Producers of Chile (ASPROCER) has led, along with the Agriculture and Livestock Service of Chile (SAG), the process to implement a “Comprehensive system of Health and Safety Management in the industry”, which has to reach the production chain, and which considers more than 25 operating programs in a simultaneous and permanent way. The challenges, in this case, are found in line with the execution programs and in their permanent improvements, especially in a scenario where it shows a great deal of new requirements in the markets that are exporting. An example of this is China, the second largest destination (USD) of our exports this year; a country which has enforced a new law for the food safety”, said the executive.

In matter of Animal Health, says Castañón, “we should keep working along with the authorities to maintain our status of a country free from prominent diseases that affect the foreign trade. An element which has allowed the country to export more than 50% of our production to more than 50 destinations worldwide. Nowadays, we are in the process of eradicating PRRS along with SAG, from our country. This time, the strain that affects us had a more aggressive field presence than we observed in the last eradication process, during the 2000s. However, thanks to public and private efforts, we aim to contain the disease progression and reduce its presence by at least 5% of the total”.

In matter of sustainability, he continues “we need to advance with the authorities to achieve the release of the projects execution that counts with the Resolution of the Environmental Qualification, develop new regulations that allows us to provide certainty to investments and operation, and achieve a better coexistence with the neighbors in the locations where activity is”.

“It should be noted that our producers have an agronomic management plan, a way to guarantee a sustainable application of the purines, considering a water and nitrogen balance. In addition, companies have implemented advanced technologies, such as activated sludge plants, worm filters and biodigesters that top environmental benefits respect to emissions of greenhouse gasses, and in the case of biodigesters the generation of additional no conventional renewable energy”.

“Finally, in the ambit of Foreign Trade, we should keep going forward in projects that aim to facilitate commerce. An example of this is the Animal Health electronic certification, the project that we had developed with the SAG which allow us to reduce substantially the time entrance of shipments in the ports of China, a country which we are operating with this system since 2014. Today, we have expanded the use of this system to Russia, the fourth destination of pork exports from Chile, and we are working with SAG for the purpose of covering, in a medium term, with other important markets such as Japan and Korea”.


STRATEGIC DECISIONS

Rodrigo Castanon

The executive of the Chilean trade association explains that it has been the transformation of productive focus on one of the major strategic decisions taken by this sector.

“Maybe the major “strategic decision” from the sector has been the change of the productive focus, which has gone from being just pig producers to pork producers and exporters with a recognition of quality and safety at an international level. Another change observed in the past years has been keeping a relationship with a greater number of parties that have decided to further integrate in the production chain, taking charge of the entire production process, slaughter, commercialization, distribution and export of pork”.

"The above," adds Castañón, "has been accompanied by an intense promotion campaign in the international market associated with the sector Brand, Chilepork, an initiative that already has 10 years of existence and has as purpose positioning pork in China, South Korea and Japan, countries that concentrate around the 70% of the sector value exports sector. This is an initiative that counts with contributions from the State for the financing through ProChile."


SUCCESSFUL CASES

The Chilean pork chain, explained Rodrigo Castañón, is a successful example, mainly because the challenges it faces and the way it projects positively. The sustained growth and its determined participation as an exporter endorse this sector.

“More than talking about individual cases of companies in particular, I think the entire Chilean swine industry is a case of success, especially if we consider that we don’t count with the comparative advantages that possess other relevant actors in the global pork production have, such as a large internal market (Chile is under 16 million people) and full grain availability (the industry should import 50% of the corn and the 100% of soybean consumed annually)”.

“This is the result of the public-private effort, allowing to increase the pork production in 800% in the last 30 years and achieve today’s position as the 6th exporter worldwide for 6 consecutive years. Therefore, in ASPROCER, in our 30th Anniversary, we are proud to be able to contribute to the success of the national swine industry”.

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