Written by Mateo Rafael Tablado
Produced by Taybele Piven
Interviewee Camilo Colmenares, CEO of Hacienda la Cabaña
Hacienda La Cabaña’s core market is Bogota, capital of Colombia; and within their projected growth overseas their main markets are in Central America, Mexico and the United States, given their proximity to the ocean and to the Panama Canal. Additionally, they seek to offer their products to European markets.
While the rise of "commodities" (raw materials markets) is over and its prices continue to decline, the company is searching for international markets given that domestic consumption of edible oils and biodiesel is adequately supplied with the current national production. Hacienda La Cabaña is also asking for the government’s help to promote the cultivation of palm oil through an increase in the mix of biodiesel levels greater than 10 percent.
In recent years, the company developed a "hybrid" palm variety, known as high oleic palm oil. This species offers a number of competitive advantages in the cultivation process, from its extraction and product commercialization, to taking advantage of the weather conditions such as:
• Its resistance to certain pests and diseases such as bud rot, a disease that destroyed more than 50,000 hectares of palm oil in Colombia.
• High oleic palm oil is naturally fluid, contrary to normal palm oils in cold regions that are mixed with soybean oil (imported to Colombia in high volumes) to be consumed as a liquid; therefore, this new product can replace soybeans imports.
• It has a lower content of saturated fatty acids, a trait valued by the global market.
Strategic and Beneficial Location
As part of their strategic planning, Hacienda La Cabaña studies weather conditions in other areas such as Uraba Antioqueño, near the border with Panama, where the climate, soil and location make it a key point for the company to expand operations. This is traditionally a farming and banana-growing region, with businesses affected by recent issues such as currency exchange. As a result of their next entry in this new market, palm plantations could reactivate the economy and open new jobs.
"Another advantage is that this area is next to the ocean, making it easier to export to United States and Central America, as well as import inputs at lower costs," said the CEO.
Automation and Research as Differentiators
Oil palm exploitation always requires labor, since pollination of high oleic palms must be manual. This benefits the creation of jobs in rural areas; however, it also means a high and constant demand and cost.
La Cabaña systematically incorporates technology in some processes so that the dependence on labor becomes only essential in processes where this is critical.
In conjunction with research institutions such as CIRAD and PalmElit (both located in France), they have developed new materials that allow higher production at lower costs, further comprising constant experimentation with genetic engineering.
"The country needs to invest more in research and development to establish an industry from palm oil," says Colmenares.
Human Resource Management
More than 30 percent of the field work done in palm oil cultivation is produced by women. This change began between 1998-2000, thanks to an inner boost in human management and the promotion of new openings in La Cabaña.
Care for the Environment
The company follows environmental regulations not only on their plantations, but also in the vicinity. One example is their ecological conservation areas nearby, such as the banks of rivers, mountains and natural corridors, which are protected to maintain the natural ecosystem of species in each region. In case of epidemics and plagues, the use of chemicals is restricted or is the last resort.
"Business is different from 25 years ago, when environmental issues were not important and mountains and forests were replaced by palms. Today, we are some of the main promoters of environmental practices in the regions where we operate, and these techniques can be adapted to other businesses in the field," the executive said.
Commercial Allies
Hacienda La Cabaña shares their growth and national success with small farmers who posses a land size under 50 acres. The company buys crops from these small businesses at a competitive price and provides them with technical advice and additional agricultural services.
Future Developments
As a pioneering company in its field, it is their job to succeed against new challenges in the entire palm industry in Colombia. For this, Hacienda La Cabaña has very clear and precise objectives for the next five years:
- To develop and increase High Oleic Palm Oil plantations that are resistant to pests and diseases.
- To rehabilitate and replant in recently devastated areas such as Tumaco, where bud rot destroyed entire plantations. This infestation is considered a nemesis in the palm oil industry.
- To develop the local market for the displacement of soybean oil imports by processing more high oleic oil.
- Leveraging surplus production for exports to Central America, United States and Europe.
National conditions for obtaining these achievements are not entirely balanced favorably: "We have environmental regulations, labor laws, trade and safety regulations, all according to first world standards, but the country does not offer first world conditions," he adds.
"The most important thing is that Colombia appreciates palm oil as a national product and gives it the value it deserves. This matters a lot, and it is also a global trend to consume local goods," says Camilo Colmenares, CEO of Hacienda La Cabaña.
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