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Major Brazil OJ exporter eyes bigger market share
24 de outubro | 2006
By Roberto Samora ARARAQUARA, Brazil, Oct 19 (Reuters) – With the rise in world orange juice concentrate prices, one of Brazil`s largest juice processors Sucocitrico Cutrale said on Thursday it expected to see a 50 percent rise in 2006/07 revenues and to expand market share. The company based in Araraquara, the center for orange juice production in Brazil`s Sao Paulo state that accounts for 95 percent of the country`s juice exports, had revenues of $500 million in 2005/06 (July/June). Cutrale`s Director of Finances and Administration Jose Cervato told Reuters revenues should region $750 million this year because 80 percent of the company`s earnings come from sales of frozen concentrated orange juice (FCOJ), which is trading at its highest level in 16 years. Brazil dominates the international FCOJ market, accounting for one in every two glasses of orange juice drunk in the world. Brazil`s juice industry brought in $1.2 billion in trade revenues last season, exporting 1.34 million tonnes of juice. “This year, we can already say that there is likely to be an increase of 50 percent,” Cervato said. He said that if prices were not so high, the industry would be suffering due to the strong real against the dollar. Other farm export industries such as soybean are suffering. This season, the company expects to export slightly more than last season due to the larger crop that is seen up 10 percent on the previous one. At present, the company is interested in expanding its processing capacity of 550,000 tonnes a year to move into the market share left by Florida producers, who have suffered from a series of hurricanes in recent years that have reduced output. Cutrale`s two processing plants in Florida have excess capacity because there simply aren`t enough orange fruit around to press into juice now. “We believe we have been expanding our participation in the market a bit, and as a result, it would be best if we improved productivity in logistics,” Cervato said. Cutrale controls about 35 percent of Brazil`s juice processing capacity and is a family run company that began 39 years ago. Brazil`s juice industry is highly consolidated with only four major crushers that account for nearly all processing. The company has been investing in the not-from-concentrate (NFC) sector as well, which has grown in recent years. It inaugurated a storage system of 40 million liters in Araraquara in 2005, which is the same capacity it has for FCOJ there. NFC is six times less concentrated than FCOJ, so it occupies more space in storage but it garners a premium on the international market. NFC is totally for export. “Florida has difficulty meeting demand all year… So we make investments here to meet that. Everybody produces in Florida. And Europe wants the product, so a system was developed to produce here and ship it there,” he said. Reuters 20/10/2006