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WALNUT PROJECT - CHILE / LATAM

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Produce and export Walnuts in the Southern Hemisphere

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WALNUT PROJECT - CHILE / LATAM

  1. 1. WALNUT PROJECT - LATAM EXECUTIVE SUMMARY
  2. 2. We are searching for a Partner/Investor willing to Finance in a JV figure an outstanding and profitable project in Agricultural sector to supply the strong demand from Asia. Considering the previous points, we want to share what we believe to be a very exciting opportunity in Agribusiness sector in LATAM. This project is framed into geographic ideal conditions, climate, economic policy in the region. Executive Summary and preliminary Cash Flow, where investor may change Variables in the box as of Sale Px, Cost, Kg by Has, Number of Has and TAX. We introduce a P& L to illustrate financial INDEX as of ROI, Pay-Back and Yield per Ha. Chile is currently one of the world’s top dried fruit and nut exporters, and is the largest producer and exporter in the Southern Hemisphere. The country trades 95% of its production abroad
  3. 3. Chilean walnut industry growing rapidly As the leading producer and exporter of walnuts in the Southern Hemisphere, Chile is also one of the largest exporters of walnuts in the world. Additionally, their crops consistently fetch good prices, and growers anticipate a vigorous growth in the production of the next few years. “We have increasing production every year,” Chile currently produces about 40,000 MT of walnuts per year, but that figure will likely rise to 60,000 MT in the next three years. New plantings as the major reason for the increase, and those plantings have been driven by the good conditions to grow walnuts and the profitability that Chilean walnuts can garner.
  4. 4. We have the case where some growers have moved from dried fruit and other nuts to walnuts due to they're looking for a profitable crop,”. “And today, walnuts are one of the most profitable crops in Chile.” One of the reasons is the quality coming from Chile is so high, due to taste and quality are valued highly, there is willingness to buy Chilean walnuts. Chilean product has also a better colour. The walnuts here have a lighter and brighter colour, and that makes for a very attractive product.” The flavour profile also has very little bitterness, and that, along with good oil content, which enhances flavour and shelf life, makes for a premium product.
  5. 5. WALNUT FIGURES The growth in this area have been soaring every year. There are already about 25,000 hectares planted, this year, will lead to a greater than 44,000 tons, 95% of which are for export production. Projections indicate that in the course of the next five years will reach 80,000 tons, which presents a tremendous challenge for the export sector. Such measures are becoming increasingly important as new alternatives are opened to diversify the destinations that are locally produced. This 2011 Korean market opened, and on the horizon the possible opening of China, a fact that would be a great news is observed, since the country is both the largest producer in the world and one of the largest consumers, still largely part supplied by California walnut (which buys about 50,000 tons, ie, more than the entire Chilean production).
  6. 6. Also there are great opportunities in the Middle East, such as the Arab-Emirates and North Africa, areas where the nut is deeply rooted in the culinary culture. However, this depends on the quality and variety of nut and price range in the market place. While there is currently indicated values ​​of US$ 4.60 per kilo to net producer, earlier this year the figure was US$ 3.80. These values ​​form a very good deal: Based on the observations of an agricultural advisor, producers usually get around 5 tonnes of nuts per hectare, which means that an average of $ 4 per kilo, obtaining about US$ 20,000 for this production. Discounting costs, the final profit is US$ 15.000. This shows that, overall, the nut farmer receives a fairly high return, unlike other fruits. Ten companies in Turkey which are supplied by Chile, virtually the only country in the region that offers alternative to source the product, except for Argentina, where production, however, is still less relevant. California is the other big market on this side of the world.
  7. 7. The market of walnuts is moving around US$ 200 million per year (from the total of US$ 275 million exports totaling nuts in 2011), a figure dwarfed soon, since projects shipments in 2015 to double the current levels Although there are variations in the prices paid to producers, depending on the quality or type of buyer is usually accepted in the season just past returns to producers were around US$ 4.5 per kilo. For a point of comparison, it is assumed that starting from the US$ 2 per kilo the farmer begins to get blue figures . In recent seasons the income of the producers have reached no less than US$ 14,000 per Ha with an orchard that produces four tons per hectare, considering obtaining an average price in the last five years of US$ 3.5 per kilo . The walnut orchards which can be harvested mechanically require more than 40 hectares to justify the investment
  8. 8. Tripling shipments By now the nuts have a promising future. Chile is still a minor player in the world, despite its growth. It is estimated that last season produced 46 thousand tons, China reached 700 thousand tons and USA to 440 thousand. "Experts say prices will stay four to six years," The explanation is that demand has grown stronger than supply. In addition, the Chilean nut and was positioned as a premium segment where there are few competitors. Estimates are for a seven-year horizon, given the current rate of plantations, Chilean exports will be about 100 thousand tons.
  9. 9. INDUSTRY GROWTH STATS Chile is currently one of the world’s top dried fruit and nut exporters, and is the largest producer and exporter in the Southern Hemisphere. The country trades 95% of its production abroad. Looking forward the industry will continue to experience sustained growth, with 2015 sales estimated at a total of US$1 billion FOB, considering the entire dried fruit and nut industry (walnuts, prunes, almonds, hazelnut and raisins),according to numbers from the Chilean Walnut Commission (ChWC). In the case of walnuts, the Latin American country occupies the second spot in the global export ranking. With the increase in production that the industry has experienced in the last few years, exports rose from 20,000 MT (in-shell basis) in 2007 to 37,000 MT in 2011. For 2012 projections put exports at 40,000 and in 2014 that number should rise to 60,000 MT.
  10. 10. With an estimated total of 25,000 hectares of planted walnut orchards, Chile’s production is concentrated in the central regions from the IV Region north of the capital to the VIII Region some 700KM to the south. This spread of land accounts for 87% of national production. Due to this growth, which comes hand in hand with the opening of new markets and an active marketing strategy, the industry has opted for greater mechanization. From the harvest through to processing plants, the percentage of the industry using machinery has increased to complement manual labor. The 2008/09 season saw exports of more than 20,000 metric tons (MT) of in-shell walnuts, a number than in 2011/12 grew to 34,700 MT, marking a new record for international shipments. Expordata-ASOEX.
  11. 11. Considering a season from week 14 until week 13 of the following year SEASON EXPORT VOLUMES (figures in metric tons for in-shell walnuts) STATISTICS SHIPMENTS ABROAD PRODUCTION REGIONS Turkey, Italy and Brazil are the principal markets for the Chilean walnut, whose participation has been increasing year after year. In regional terms, Europe (including Turkey) concentrates the highest quantity of imports, which up to week 35 of season 2012/13 (April-March) were 14,434 MT (in-shell basis) as of a total 23,218 MT. Following is Latin America with 4,004 MT (in-shell basis) and the Middle East with 3,868 MT (in-shell basis). During the 2011/12 season Europe accounted for a total of 22,797 MT, followed by Latin America (8,544 MT) and the Middle East (3,269 MT).
  12. 12. During the last four seasons these three markets have experienced continual growth, while North America has remained an insignificant market for Chile’s walnut exports. This year the difference has been marketed by a presence in the Far East, whose shipments have grown from 25 MT in 2011/12 to 3,868 MT in the 2012/13 season so far. This is explained mainly by the opening of the South Korean market for shelled walnuts, which was confirmed in the beginning of the year. Best Regards, Luis O. Benavente CEO CORPORATE ITC Phone/WhatsAPP: +56 9 71572892 www.corporateitc.com

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