Page 110 - STRATEGY Magazine (G)

INTERVIEW: AGROAMERICA
FERNANDO BOLAÑOS VALLE
CEO AGROAMERICA
Fernando Bolaños, the CEO of industrial conglom- erate AgroAmerica, waxes enthusiastic when he speaks of the agriculture industry in his home country. “I would say Guatemala offers ideal cir-
cumstances from the climatic, logistical, and human resourc- es points of view.”
IDEALLY SITUATED
One of only 19 biologically megadiverse countries in the world, according to the U.N. Convention on Biological Di- versity, Guatemala is home to a rich variety of species and endemism, as well as surprising cultural diversity. The na- tion comprises a variety of microclimates—cool highlands, hot lowlands, rainy regions, and dry areas—all underscored by the country’s rich, volcanic soil. Coupled with moder- ate temperatures year round, these conditions enable cul- tivation and prolific production of a wide-ranging array of crops—many, like coffee and bananas, with enormous global demand. Given Guatemala’s logistically strategic position, its agricultural products can reach a variety of destinations rapidly, creating a meaningful cost advantage.
But it is Guatemala’s work force that ultimately inspires Bolaños. “We have a tremendous population that really wants to work.” Many countries in the region find it nec- essary to import labor, but not Guatemala, which enjoys an abundance of young, energetic workers who are hungry for opportunities to earn a living wage and work in good condi- tions.
PROMOTING RURAL PROGRESS
This hunger for better prospects is particularly acute in rural areas, where residents do not enjoy the same quality of life as those who live in the cities. Consequently, Bolaños believes, companies must become fierce advocates for helping rural, isolated, and disadvantaged communities achieve a better
“Guatemala is rich in natural resources and human capital. It’s a transformative time. People here have a very strong work ethic and are emerging from poverty and moving up the economic ladder.”
standard of living, with adequate resources for workers and their families. He freely admits that the equation is complex, factoring in not only income levels, but also infrastructure, security, healthcare, and, most critically, education.
Help must come from a variety of sources, and the industry is served by a collaborative approach that embraces many efforts. Bolaños elaborates, saying, “I think the best strate- gy is to engage all the stakeholders—growers, retailers, gov- ernment institutions, research organizations, union leaders, wholesalers—through world-class practices and community relationships.”
ANSWERING TO NEW DEMANDS
Alignment with stakeholders is critical for one of Gua- temala’s most important crops, bananas. Over a cen- tury old, this mature industry segment employs more than 450,000 workers in Latin America and supports some 10 to 12 million people indirectly. Yet in order to respond to shift- ing market dynamics and competition and continue to grow, this behemoth must remain flexible and agile.
Market penetration in the United States is almost com- plete; bananas are the number-one produce item sold in U.S. supermarkets. Yet markets in Eastern Europe are still grow- ing, and demand in China, Japan, and Indonesia is skyrock- eting. The Philippines, the traditional supplier of bananas to Asia, can no longer keep up, so Latin America is stepping in to fill the gap.
A CHANGING ENVIRONMENT
In today’s environment—in terms of both weather and busi- ness—changing dynamics require flexibility. Resources are scarcer than ever, and consumers demand transparency for the food they eat and the products they use. “People want to know where their bananas are being grown or what kind of oil base is in the shampoo they use. Where does it come from? What policies and procedures went into its production?”
Another issue that producers face is climate change. “Ten year” storms now occur every five years or so. Again, adapt- ability is the crucial element for the industry. Whether it means practicing better soil management, spreading planta- tions out across a broader geography, or exercising better use of the available water, the industry must change in order to maintain its dominant position in the region.
A nation rich in natural resources and people, Guatema- la has achieved a large measure of stability and is building forward momentum. Bolaños points out that “being respon- sible to the environment should be transversal throughout the production chain. Coming from a smaller country is not always easy. You have to be better and you have to prove that you’re better.” Today’s Guatemala, he contends, is “just fantastic. The opportunity is here.”
Planting Seeds of Growth
The leader of one of Latin America’s largest agro-conglomerates ex- plains why his nation is uniquely well suited to agricultural production and how this industry is advancing Guatemala’s competitiveness on the global stage while promoting progress at home.
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