Chiquita to grow bananas in Angola, Mozambique for EU market

Chiquita Brands International, Inc. has announced long-term strategic associations in Africa for the export of bananas to the company's core European markets from Angola with ESCOM, a member of Grupo Espirito Santo, and from Mozambique with Matanuska Africa Limited. With commercial exports expected to start in 2010, each project is expected to create approximately 3,000 direct jobs.

These projects in Angola and Mozambique allow the company to further strengthen the diversity of its geographic sourcing portfolio, and to provide, upon project completion, an expected 20 to 30 percent of the company's premium quality fruit volume for European markets, on a tariff free basis. The decision to expand Chiquita's African presence was based on the company's assessment that sourcing from Africa would continue to be cost-competitive, even if there are future significant reductions in the import tariff rate applied on Latin American bananas imported into the European Union.

"We believe that starting banana production in Angola and Mozambique is an important strategic step that will be very cost-competitive regardless of the eventual outcome of the challenges to the EU tariff import regime," said Fernando Aguirre, chairman and chief executive officer. "These projects will significantly increase our sourcing from tariff-free ACP countries, reaching an estimated 20 to 30 percent of our European volume of premium bananas. "

The agreement signed in Benguela, Angola, marks the debut of Chiquita in Angola and of ESCOM in the agricultural sector. Contingent upon necessary governmental approvals, the Agricultural Development Company of Angola, a subsidiary of ESCOM group and the Angolan company Hipergesta, will establish banana production in the province of Benguela, with an investment of more than $60 million (euro 40 million) provided by the Agricultural Development Company of Angola. In addition, Chiquita recently entered into an agreement with Matanuska Africa Limited for a similar project that is already underway to develop banana production in Mozambique.

While Chiquita will not provide capital for either project, the company will support the projects with its expertise in farm development, good agricultural practices, training of local workers, logistics, marketing and distribution to European markets of Chiquita branded product. The first commercial exports to Europe are expected in 2010, after planting anticipated to begin later this year.

Earth Times