Economic Benefits of Standards Peru: The Green Fresh Asparagus · Economic Benefits of Standards – Peru: The Green Fresh Asparagus -Final Report- May 2011 [2] CONTENT ... Asparagus

Economic Benefits of Standards – Peru: The

Green Fresh Asparagus -Final Report-

May 2011

[2]

CONTENT

INTRODUCTION 3

1. OBJECTIVES AND ORGANIZATION 4

2. INTRODUCTION OF THE SELECTED COMPANIES 5

3. ATTITUDE OF THE COMPANIES TOWARDS STANDARDIZATION 7

3.1. Standards context 8

3.2. Standards capability 9

3.3. Role of standards in company strategy 10

4. ANALYSIS OF THE VALUE CHAIN 11

4.1. Industry value chain 11 4.1.1. Producers 13

4.1.2. Exporters 15

4.1.3. Producer – buyer linkages 16

4.1.3.1. Vertical coordination 16

4.1.3.2. Vertical integration 16

4.1.4. Logistics costs 17

4.2. Company value chain 18

4.3. Key value drivers 20

5. SCOPE OF THE ASSESSMENT 22

6. USE OF STANDARDS BY THE COMPANIES: STANDARDS USED IN THE COMPANY VALUE CHAIN 23

6.1. The impact map of standards used by firms 25

7. SELECTION OF OPERATIONAL INDICATORS TO MEASURE THE IMPACTS OF STANDARDS 28

8. CALCULATION OF THE ECONOMIC BENEFITS OF STANDARDS 33

9. QUALITATIVE AND SEMI-QUANTITATIVE CONSIDERATIONS 38

10. EVALUATION OF THE RESULTS 40

REFERENCES 42

ANNEXES 44

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Annex 1: International market 44

Annex 2: National standards in fresh asparagus 47

Annex 3: Main certifications in fresh asparagus 48

Annex 4: Main regulations in fresh asparagus 51

Annex 5: Peru’s asparagus industry 52

Annex 6: Functions and associated activities of DanPer Trujillo 56

Annex 7: Functions and associated activities of FríoAéreo 57

Annex 8: Structure of the standards impact map of DanPer Trujillo 59

Annex 9: Structure of the standards impact map of FríoAéreo 62

Annex 10: The impact map of standards of DanPer Trujillo 62

Annex 11: The impact map of standards of FríoAéreo 64

INTRODUCTION

Asparagus is the star product among non-traditional agricultural exports (NTAX’s) in Peru. Indeed,

Peru is one of the leading exporters of asparagus and recognized worldwide for the quality of its

products (see annex 1).

The Peruvian privileged position in international markets is the result ofprivate and public efforts

to develop competitive advantages in a context characterized by strong international competition,

strict sanitary and phytosanitary market access requirements, growing private demands for high-

quality and safe products and traceability requirements.

How has this industry managed to achieve such a level of success in a global market increasingly

demanding and competitive? And, what are the reasons and change factors that allowed to

develop a sustainable industry with significant impact on the Peruvian economy?

The success of the sector can be explained by a combination of factors among which, we believe,

the implementation of standards has played an important role: by facilitating the adoption and

transfer of knowledge and technology at intra-companyas well as inter-company levels.To analyze

the contribution of standards, it was decided to apply a recent methodology developed by the

International Organization for Standardization (ISO) to assess the economic impact of standards.

The methodology focuses on microeconomic analysis of the activities of businesses or industries

and provides a very useful insight on how to consider the multiple ways in which the adoption of

standards can promote the development and growth of companies or sectors. In essence, the

approach focuses on the value chain analysis, on the identification of key value drivers that

characterize a company or an industry,and on the relation between the application of standards

and the creation of value. The impact of standards is determined by measuring how they affect

relevant operational indicators for the various business functions and then translated in monetary

terms.

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The present report is structured as follows. In section one are outlined the objectives and the

organization of the study. Sections two and three provide a short description of the companies

analyzed and of their attitude towards standardization. In section four the analysis of the value

chain is developed and in section five the scope of the assessment is defined. Sections six and

seven cover the analysis of the use of standards by the companies and the operational indicators

to select to measure the impact of standards. Sections eight and nine focus on the calculation of

the economic benefits of standards and on qualitative and semi-quantitative considerations.

Finally, sections ten provides a summary of the findings of the study.

1. OBJECTIVES AND ORGANIZATION

The main objectiveof INDECOPI1 and the Standardization and Non-tariff Barriers Surveillance

Commission2 was to apply the methodology developed by ISO3 in 20104 to measure the economic

impact of standards, with a view to demonstrate the importance of using standards and to

sensitize Peruvian firms on this matter.

Therefore, the Standardization and Non-tariff Barriers Surveillance Commission (CNB5) and the

Economic ResearchDivision (ERD) of INDECOPI decided to carry out a pilot project applied to the

asparagus sector, one of the main non-traditional agricultural exports (NTAX’s) of Peru that,since

the 1990’s, has experienced an explosive growth allowing Peru to become one of the most

important producers and exporters in the world (see annex 1).

In October 2010, two majorcompanies were selected to take part in this pilot project: DanPer

Trujillo and FríoAéreo, the former an agro-exporter company and the latter a logistic company.

Both companies play a key role inthe asparagus value chain and have an important track record of

dealing with the implementation of standards and certifications.

1Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI). The main

national institution in charge of standardization, accreditation and metrology in Peru. 2 The Commission is responsible for developing regulatory activities nationwide in its capacity of National Regulatory

Agency. It supervises the subsequent control and elimination of non-tariff trade barriers, according to commitments made in the framework of the World Trade Organization, free trade agreements and the corresponding supranational and national regulations. It is also in charge of managing the official electronic signature infrastructure. 3 The International Organization for Standardization (ISO), is an international-standard-setting body composed of

representatives of national standards organizations from over 160 countries. 4GERUNDINO, D. & HILB, M (2010).The ISO Methodology.Assessing the benefits of standards. ISO Focus+, June 2010, pp.

10 – 16. The ISO Methodology’s main objectives are to provide: (1) A set of methods to measure the impact of standards on organizational value creation (with an emphasis on businesses); (2) Decision-makers with clear and manageable criteria to assess the value associated with using standards; and, (3) Guidance on developing studies to assess the benefits of standards within a particular industry sector. 5According to its initials in Spanish (Comisión de Normalización y Fiscalización de Barreras Comerciales no Arancelarias -

CNB).

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The pilot project started in November 2010 with the participation of DanPer Trujillo and FríoAéreo

representing the private sector, and the CNB and the ERD representing INDECOPI. The study was

finalized in March2011.

2. INTRODUCTION OF THE SELECTED COMPANIES

Asparagus has a prominent role inthe Peruvian agro-export sector: it has indeed been an engine

for economic growth, clearly reflected in its contribution to the generation of export revenues and

employment.

The asparagus industry has made significant progress in the implementation of good

manufacturing practices and management systems for safety and quality. Obviously, the HACCP

(Hazard Analysis Critical Control Point) system has served as a starting point for the

implementation of other management systems, oriented towards integrated quality assurance.

Standardization has played an important role in supporting the development of business

competitiveness and increasing the efficiency and transparency of the asparagus market. The

Peruvian Asparagus Standards are set by the Technical Committee of Standardization of

Asparagus, with the participation of all actors in the value chain, in a transparent and consensus-

based framework. The importance of standards and their broad application in the market was one

of the main reasons for developing an assessment of the economic impact of standards for this

industry. Priority has been given to the manufacturing and logistics components of the industry,

and in minor proportion to the agricultural segment.

Within the asparagus value chain, it was therefore decided to select an agro-exporter firm and a

key logistic consortium – DanPerTrujillo 6 (agro-exporter) located in Trujillo, in the north of Peru

and Civil Association FríoAéreo (logistics consortium, located in Lima)

DanPer began its operations as an international joint venture with Danish and Peruvian capital in

February 1994 with great success (see Table 1). The company holds agricultural operations in

5 000 hectares where are cultivated asparagus (green and white), artichokes, pepper (jalapeño

and piquillo), string beans, mango and papaya7.

Around two-thirds of the cultivated hectares are DanPer’s own and the remaining one third is

from external suppliers. It is worth noting that DanPer started production from owned fields only

in 2003 and since then this has expanded substantially. However, the quantities from external

6For further information, please consult: <http://www.danper.com/Web/en/Default.aspx>. Address: Carretera Industrial

s/n Sector Barrio Nuevo Moche – Trujillo, Peru. 7 Roughly speaking, asparagus explain 44% of the cultivated hectares, 47% are dedicated to artichokes, 8% are dedicated

to peppers, and the remaining area for fruits.

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suppliers are also growing, due to the development of the market and the expansion of DanPer’s

sales.

Table 1

MAIN FIGURES AND FACTS OF DANPER

Name DanPer

Location Trujillo and Arequipa, Peru

Established February, 1994

Production lines

Preserved, fresh and frozen

Products Asparagus (white and green), artichokes, peppers (jalapeño and piquillo), beans, mango and papaya

Turnover sales USD 88 million (2010)

Asparagus exports (all presentations)

USD 36,5 million (2010)

Main markets North America (USA) and Europe (France and Spain)

Source: DanPer

DanPer is one of the largest agro-exporter companies in Peru, with total revenue of USD

88millionin 2010, based almost entirely on export. Around 45% of its export is directed to the

USA, 30% to Europe and 25% to other regions (Asia, Oceania, Africa and Latin America).

DanPer has three preserved process plants, one packaging line for fresh asparagus, and one frozen

process plant (IQF tunnel). Recently, it has extended his operations to the south of Peru –Arequipa

– where it set up a plant for preserved goods.The company business comprises three major

business lines: preserved goods (about 77% of sales), fresh products (21% of sales) and frozen

products (2% of sales).

Normally, the frozen and preserved products are delivered by maritime transport, whilst the fresh

products are delivered by air (two-third of the total) and maritime transport.

DanPermaintains a work force of about 6 thousand people,in two locations (Arequipa and Trujillo).

The company has a portfolio of approximately 350 customers and 150 suppliers.

FríoAéreo8, established in 1998 with the support of the Peruvian Export Promotion Agency

(PROMPEX), is an association formed by exporters of perishable products (fruits, vegetables and

8For further information, please consult: <http://www.frioaereo.com.pe/>. Address: Av. Avenida Elmer FaucettCdra. 30

#s/n, Callao - Peru.

http://www.frioaereo.com.pe/

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flowers), serving primarily those companies needing to ensure adequate post-harvest

management of their products, up to pre-shipment stage.

Thanks to the establishment and growth of FríoAéreo, the airport Jorge Chavez in Lima has today

the largest perishable-goods centre in Latin America, with modern equipment and an adequate

logistics system that provides optimal conditions to handle and storage products. The cold

terminal has filled a gap in the exporters’ supply chain, since, prior to its establishment, perishable

products faced serious risks of deterioration due to breaking the cold chain.

FríoAéreowas established by nine member companies, which represented 40 percent of the

Peruvian agro-export industry. Today, 33 companies are members of FríoAéreo, representing 80-

90 percent of the industry. Around 80 percent of the total Peruvian exports of perishable products

dispatched by air, pass through its cold chain management facilities.

Since its inception, FríoAéreo has greatly contributed to reducing inefficiency in the logistic chain

of perishable products associated with quality losses and long loading times (from 4 hours in 1998

to 1.5 hours in 2005). The company also provides reliable information to the industry, enabling

export companies to improve strategic planning.

The major contributions of FríoAéreo to the asparagus industry concern:

- improved control of the cold chain (at all stages),

- improved control of product quality,

- information support and,

- joint purchasing programmes.

FríoAéreo has also strengthened the exporters’ bargaining power vs. the airlines, allowing them to

obtain better facilities and more space available on flights, at competitive rates.

FríoAéreo plays an important role in the standardization of asparagus, given their active

participation in the development of Peruvian Technical Standards for Asparagus (harmonized with

the Codex Alimentarius), in supporting the application by industry of the Peruvian technical

standards for sampling and fresh asparagus, and in providing daily information re: quality checks

at the export terminals.

3. ATTITUDE OF THE COMPANIES TOWARDS STANDARDIZATION

The success achieved by the Peruvian asparagus industry in international markets was explained

by its ability tosupplying a trustworthy safe product of high quality.

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In 1998, the private and public sector, with the support of INDECOPI, promoted the creation of the

Asparagus National Technical Committee of Standardization (ANTCS) as a way to develop

standards that would strengthen the safety and other product and process quality attributes,

responding effectively to the requirements of importers and of national regulatory authorities of

importing countries. To achieve this, national standards for asparagus published (see annex 2) by

the ANTCS were harmonized with Codex Alimentarius9 standards.

Private certification schemas have also become increasingly important requirements demanded by

international markets (see annexes3 and 4), to which Peruvian exporters have responded

proactively.

The implementation of standards and certifications have contributed considerably to the positive

transformation of the Peruvian agro-export sector in terms of product quality, environmental

sustainability of the production systems and better social welfare conditions.

3.1. Standards context

This subsection describes the context in which these companies operate and their role in the

market as users of standards. Position in the industry value chain, power within the industry,

theme relevance and market novelty are the four dimensions considered in this analysis10.

In tables 2 and 3 are presented the results of the analysis for DanPer Trujillo and FríoAéreo. The

role of these companies within the industry value chain is important and has an influence on the

use of standards by suppliers and logistics operators.

Table 2

STANDARDS CONTEXT OF DANPER TRUJILLO

Context Description

Position in the industry

value chain

Inputs and services provided by suppliers (farmers) and logistic

operators, respectively, are keys to meet requirements of foreign

markets. In this sense, the use of quality and safety standards by

DanPer Trujillo influences the improvement of suppliers’ operations

and deliverables (upstream firm).

9 The Codex Alimentarius Commission was created in 1963 by FAO (Food and Agriculture Organization of the United

Nations) and WHO (World Health Organization) to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Program. The main purposes of this program are protecting health of the consumers and ensuring fair trade practices in the food trade, and promoting coordination of all food standards work undertaken by international governmental and non-governmental organizations. More information on:

<http://www.codexalimentarius.net/web/index_en.jsp#> 10

For additional information about the four dimensions, consult ISO (2010b). Economic benefits of standards, Methodology Guide (chapters 1-3).

http://www.codexalimentarius.net/web/index_en.jsp

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Context Description

Power within industry

As an export-focused company, DanPer is very strongly influenced by

international market requirements (including notably standards and

certifications)

As a large buyer of supplies, it can push the use of certain standards

by its suppliers.

Theme relevance Safety and quality are the main critical issues facing the industry and

impacts from standards are high.

Market novelty Supplier tends to improve their services significantly because of the

standards and new suppliers can be integrated in DanPer’svalue chain.

Table 3

STANDARDS CONTEXT OF FRÍO AÉREO

Context Description

Position in the industry

value chain

As a downstream firm that provide service of storage (cold chain

management facilities), the use of standards is critical to reduce risk

for an inadequate handling of the product.

Power within industry It can influence the implementation of process, safety and quality

standards to optimize the quality of exported products

Theme relevance Standards concerning handling, quality and control have stronger

impact.

Market novelty Other agro-exporters can benefit from industry-wide use of quality

and safety standards.

3.2. Standards capability

According to ISO (2010b), the second factor influencing standards impacts is the ability of a

company to deal with standards. The level of competence, the ability in implementing standards

and the company’s attitude towards standards are aspects considered in this assessment.

DanPer Trujillo is a firm with an important history in dealing with standards and, since its

establishment, its attitude toward standards has been strategic and very proactive11. It is worth

noting that in Danper’svision, adapting to new standards is seen as an opportunity to improve

production processes and to open new markets, in spite of the cost (in time and in money)

incurred.

11

DanPer Trujillo is part of the ANTCS as well as part of the consortium of firms that have created the IPEH and FríoAéreo.

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The importance of meeting customers’needs and of satisfying regulatory requirements has been

the main driver that boosted the adoption and implementation of several standards and

certifications by DanPer12. In order to implement these standards and certifications, DanPer has

created supporting business functions in charge to develop technical and control measures to

facilitate adaptation to standards.

FríoAéreo, in a decade, has successfully adopted standards for all its processes, and promoted the

implementation of standards such as NTP 011.109:2008 ASPARAGUS: Fresh asparagus

requirements, which have played a key role in promoting the use of standards through the

industry. Its experience with the implementation of standards has allowed FríoAéreo to develop

indicators and control systems for quality attributes that allow companies to monitor their quality

performance and introduce corrective measures as required.

In general, the importance of standards and certifications is well-known by the industry, whose

companies know that in the past decade standards have supported the industry effort toimprove

its competitiveness.

3.3. Role of standards in company strategy

In tables 4 and 5 the role of standards in DanPer’s and FrioAereo’s strategies are highlighted – with

reference to the three basic company profiles described in the ISO methodology13.

Table 4

ROLE OF STANDARDS IN DANPER STRATEGY

Context Description

Strategic standards shaping Promotes the useof standards by suppliers in order to match his

needs.

Strategic standards adoption

Adoption of specific standards or certifications (process, safety

and quality) is key to access to new markets and to meet

customer needs.

Operational standards adoption Thorough implementation of standards supports the continual

improvement of operations in several areas.

Table 5

ROLE OF STANDARDS IN FRÍO AÉREO STRATEGY 12

To have a look of the main standards and certifications obtained by DanPer Trujillo see the following link: http://www.danper.com/Web/en/paginas/AseguramientoSistemasCalidad.aspx 13

For further information about the categories considered in this analysis, consult ISO (2010b). Economic benefits of standards, Methodology Guide (chapters 1-3).

http://www.danper.com/Web/en/paginas/AseguramientoSistemasCalidad.aspx

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Context Description

Strategic standards shaping Promotion of external process standards to harmonize

processes across the industry.

Strategic standards adoption Adoption of security standards for cooling and assured customs

handling.

Operational standards adoption Common use of basic and specific process standards as well as

certifications, like BASC.

4. ANALYSIS OF THE VALUE CHAIN

According to ISO (2010b), the value chain means “products (or services14) that move through all

the activities in a prescribed order, gaining value in some way at each stage of the chain” (p.27).

4.1. Industry value chain

In this section, two chains have been sketched. The first (see Figure 1) is the asparagus production

chain, and the second (see Figure 2) is the main stages for fresh green asparagus15export. These

chains are useful in understanding the value chain of the Peruvian asparagus16 industry.

According to FAO (2007), the fresh asparagus supply chain involves several steps from production

to export.

The process begins with selection of varieties, nursery, planting, application of chemical inputs

and irrigation, disease control, and harvesting. Timing is fundamental to maintaining quality

product, for example, harvesting is a very coordinated activity, no more than 30 minutes are

allowed from harvest to arrival in the packing house in order to avoid deterioration of quality.

In the logistics/post-harvest component, fresh asparagus are loaded, weighed, cut, washed,

and then sorted, graded, and bunched. Next, the asparagus are packed in specialized cartons

(5-12 kg), pre-cooled and loaded onto refrigerated trucks. They then pass through customs

clearance, cold storage and airport handling, and are finally shipped by air; more recently, they

are also shipped by sea.

The marketing component consists of identification of and negotiation with buyers, market

research information, and ensuring completion of sale, etc. (FAO, 2007: p. 27)

14

Considering both the way services are developed and delivered. 15

Ositran (2009), this document analysed the logistic chain of green asparagus with main attention in the use of transport infrastructure for exportation. The goal was to identify the main bottlenecks that could affect business sustainability within this sector 16

Green asparagus is the main variety produced in Peru, represent more than 80% of total production.

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In general, processing plants are close to cultivation areas17, except when transportation and

processing costs are larger in comparison to field costs.

Figure 1

ASPARAGUS PRODUCTION CHAIN

Source: ACORDE

The processing plant has different processes (see Figure 2), which include cutting, weighing,

sorting, wrapping, hydro-cooling18 and packing pallets for shipping by air (fresh asparagus) or in

containers for shipping by sea (asparagus, canned, bottled, etc.).

For the fresh asparagus’s case, once selected the products, , the export logistics (see Figure 2)

implies the transportation to the Lima Airport for export through FríoAéreo which coversalmost

99% of export traffic . (Talma and Swissport also have a very smallshare of the market.)

FríoAéreo, Swissport or Talma are in charge of the processes of storage, refrigeration, palletization

and containerizationof the pallets, which are in termokings containing bundles of asparagus. The

containers are then moved to the aircrafts (cargo or passengers) ready to take off.

17

The main cultivation areas are located in Junín, Trujillo, Lima and Ica. 18

Depending on the type of product, use cooled, chilled or frozen.

Harvest(Turión)

Green Asparagus

Frozen

Export (99%)

Market intelligence and brand promotion

Irrigationtechniques

Genetic

Agricultural Technology

Support

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White Asparagus

FreshCanned

Preparation of liquid medium

Filling, exhausting, sealed and sterilized

Selection

Calibration

Packaging

Cleaning

Cooling

Calibration and bleaching

Selection and cleaning Selection and cleaning

Calibration and bleaching

Packaging

Reefer Container (-18 C)

DispatchCooling and storage

Domestic market (1%)

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The storage company requires a ramp operator like Talma, Swissport or Globeground19 to ship the

asparagus to their destination. After landing, the asparagus container arrives at the destination

where it is stored in the warehouses of the airlines for onward transfer to the hold of the trader.

4.1.1. Producers

According to the Asparagus Census (1998), the Peruvian asparagus industry is characterized by the

presence of large firms at the production level. Approximately 40% of the producers are

considered small-scale producers (with less than 4,9 ha under cultivation) and accounted for

almost 8,4% of the total asparagus supply20. Yet, concentration in asparagus production is an

increasing trend, according to the Peruvian Institute of Asparagus and Vegetables (IPEH).

The main reason for the concentration in this stage of the chain, according to FAO is due to:

The highly capital-intensive nature of the asparagus production and processing activities, and

the strong coordination needed in the production, post-harvest and distribution stages to

produce and maintain quality products and prevent its contamination. (FAO, 2007: p. 27)

In terms of cost, the irrigation process is a main concern for Peruvian producers due to differences

in the irrigation systems used in the valleys. According to the Universidad Tecnológica del Peru, in

the Ica Region the irrigation infrastructure represents 75% of total set-up costs of a hectare of

green asparagus with modern production technology21.

There are also significant differences in the average cost of irrigation water employed between

fundos (farms) in Ica22 and La Libertad: in the former, water comes from wells with a cost of USD

0,25 per cubic metre23; whilst in the latter water comes from the Chavimochic aqueduct with a

cost of approximately USD 0,018 per cubic metre24.

Since the liberalization of agriculture in the 1990s, large agricultural corporations have entered the

market with the introduction of new technology and the integration of all production processes25.

19

These companies provide services of loading ramp to airlines. 20

For further details about the Peruvian market see annex 5. 21

In FAO (2007), this percentage was determined in February 2006. 22

In Ica, the water irrigation comes mainly through the exploration of wells which is highly expensive. 23

In Ica, when wells are used, the irrigation cost accounts for around 18,8% of the total operative costs per year. FAO.Op. cit. p. 28. 24

FAO.Op. cit. p. 28. 25

This process has involved an upstream integration.

[14]

Figure 2

MAIN STAGES FOR EXPORT FRESH GREEN ASPARAGUS

Source: OSITRAN (2009)

Harvest

Packing

Plant

Frío

Aéreo

Ramp

Attendant

Airline

Company

Warehouse in

destination

Trader

Warehouse

Retailer

Warehouse

Final Customer

Packing

Plant

Cut

Weighed

Selection

Assembly

Hidro

Cooling

Packaging

/ Pallet

Processing

In FríoAéreo

Pre-Chamber:

Inspection

Register

Sampling

Weighed

Entry report

Quality report

Cold Storage

Room

Load

Cargo

Dispatch

Transportation

Refrigeration

Transportation

Fumigation

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In these years, the development of the production chain of asparagus has demanded large volume

of investment26 that has been sustained mainly by large companies. Small and medium enterprises

(SME), that have lowest level of leverage27, have not been able to invest comparably to large

companies, and therefore have experienced reduced possibilities to take part in high-value export

chains, participating only as complementary suppliers of large farmers.

4.1.2. Exporters

Although there are more than 130 companies exporting asparagus in 2010, the top five exporting

companies account for 39% of the total product shipped, and the remaining companies (more

than 100) share the remaining percentage of the asparagus export value.

The concentration seems to be higher in the processed asparagus exports. The top three

companies have exported more than 70% of the total in 2010 and Camposol, the market leader,

had a share of 30,8%.

In the fresh asparagus export industry, Agroindustrial Beta, the largest exporting company, had a

share of 11,2% of total exports, followed by J&P Agroexportaciones with 6,0%28.

Most agro-export companies are specialized in processed product or fresh products and only a few

of them - like Camposol, TAL S.A., DanPer Trujillo and Green Peru - have delved into both types of

products..

Since the 1990s, exporting companies have been more involved in production activities, reflecting

a process of vertical integration in the industry, where large (and some medium-sized) companies

have played a main role, whereas smaller companies participate as suppliers of the larger ones,

generally through long-term relations.

Finally, there is certain level of concentration of exporters per areas of production, for example

the main fresh asparagus exporters are located in the southern coastal region whereas preserved

asparagus exporting corporations are located in the northern coastal region.

26

According to Campbell (2006), the asparagus industry has invested more than 1 million USD in product quality improvement programs. From 2000 to 2004, more than 100 millions USD have been invested in total in this sector, 75% in the field and 25% in the process plants, according to Diaz (2010). 27

They still face significant financial constraints in spite of the significant improved in the access of financial resources in recent years. 28

See annex 5.

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4.1.3. Producer – buyer linkages

Companies’ supply needs for asparagus are satisfied through formal or informal relations with

producers or market intermediaries, and/or through vertical coordination, according to FAO

(2007). Export companies prefer reliable suppliers and tend to enter into medium and long-term

verbal or written relationships with their suppliers. However, it is possible to find agro-export

companies that buy asparagus from informal assemblers, who have previously bought asparagus

from farmers, mainly small-scale farmers.

4.1.3.1. Vertical coordination

Although most agro-exporters have their own areas dedicated to production, some of them need

other sources of supplying29. Generally, the buyer and the supplier sign a contract which defines

quality, volume, duration, inputs, technical assistance and pricing mechanisms30.

In this sense, exporters prefer to enter into long-term relationship with large-and-medium scale

producers instead of dealing with small scale producers, because the former may be able to supply

broader volumes of asparagus with a quality consistent with Good Agricultural Practice (GAP). It is

noteworthy that once a supplier fails to comply with the terms established, it likely ends-up

excluded from the future list of suppliers of the producer31.

In the Chincha Region, an intermediary company has arisen (Comercializadora de Productos

Agrícolas, COPRA) with the goal to act as an intermediary broker between producers and

exporters. This intermediary tends to represent the interest of the producers (or other farmers) in

negotiating with the exporters, but at the same time assumes the responsibility to guarantee a

good and steady supply of asparagus to exporters.

4.1.3.2. Vertical integration

Due to the intense level of competition in the international market of asparagus, Peruvian

exporters are obliged to maintain high levels of standards over all their production process32 in

order to preserve their reputation and open new markets. The quality of the asparagus is critical in

this industry, and most of the exporters’ efforts are concentrated on this issue33.

29

Normally, when the cropland of the exporter is small, he might require the provision of asparagus from producers in order to reach his critical mass for export. 30

Indirectly, we can infer that there is not a standard contract employed by the parties. 31

According to FAO (2007) several exporters highlighted that relationships are based on trust. 32

It means from the fields to the port of dispatch or when the product is put in the shelf of the purchaser. 33

FAO (2007) points out asparagus exporters have understood this issue very well, due to the years that take build a name (as a reliable supplier) in the international market and just a few minutes to ruin it.

[17]

Since mid-1990s, it has been clearly seen a trend toward a vertical integration in the asparagus

industry in Peru. Exporters need to control the upstream operations (from production to

distribution) with the aim of ensuring a consistent quality supply34

Upstream vertical integration involves the exploitation of economies of scale and during the past

few years this has allowed exporters to reduce transactional costs within the whole chain.

Nevertheless, the decision on whether to vertically integrate or vertically coordinate would

depend on the possibilities to diminish transactional costs and the uncertainties associated with

the purchase of quality product from external suppliers.

Some exporters’ corporations have also entered into direct contact with large-scale retailers, like

supermarkets chains in the U.S. market, with the purpose of improving their sales margins, but

also for identifying the client, specifications, volumes and prices for the produce in advance. There

is a trend towards the establishment of distribution centres and sales centres in the destinations

markets35.

4.1.4. Logistics costs

Although in recent years the sector has been implemented important improvements in the logistic

chain, the lack for transportation, storage, packing, and inefficient handling and administrative

procedure in ports remains a main concern of the industry36, because any deficiencies in this area

implies significant additional costs and product loss.

In terms of means employed for export, the transportation by air is the best option for fresh

products (91% in 2004)37 since is relatively efficient in reducing quality deterioration, though is

also costly38. Air transportation represents nearly 45% of the total cost of the final exporting price.

El Callao (maritime) port, according to prior studies, is the second most inefficient port in the

Andean Region: inappropriate access roads to the port and the poor quality of the stock and

service of the freight transport providers, have all been factors that have increased the logistic

cost of the industry.

Despite exporters’ efforts to overcome this issue, the large presence of small firms in the industry

represents the main constraint for improving competitiveness and reducing logistics costs.

34

For example; negative experiences with the quality or volume of the asparagus provided by producers or farms. In addition, farmers have been had few incentives to implement innovations or to increase the competitiveness of the Peruvian industry. 35

In U.S., importers of fresh asparagus have organized the Peruvian Asparagus Importers’ Association (PAIA) that jointly with the Peruvian exporters promotes the Peruvian asparagus in that market. 36

These factors tend to affect the level of competiveness of the industry as well as undermine the chain. 37

While the maritime transportation accounted for the 6% of the total transportation of fresh asparagus in 2004. 38

These years it has been highly influenced by fuel prices.

[18]

According to FAO (2007), with larger horizontal coordination, export activities would achieve

further economies of scale, reduce transactional costs, and improve their negotiation power with

buyers.

4.2. Company value chain

In this subsection, the value chains of DanPer Trujillo and FríoAéreo are sketched, on the basis of

the information provided by the two companies, (see figures 3 and 4). The aim is to position each

company within the industry value chain.

The two companies operate at different stages of the industry value chain, though their

operations are complementary, in the particular in the fresh asparagus’s case. DanPer is involved

at every stage of the chain from field production to export, while FríoAéreo is positioned in the

final stage of the chain, providing logistical support to export.

According to Figure 3 (value chain of DanPer), Production planning is the business function in

charge of planning the crop for the year on the basis of information provided by Customers

requirement and Marketing and Sales functions. This function also identifies all the inputs required

by the company to achieve the production goals.

The Harvesting/collecting function implements in the field the requirements set forth by the

Production planning function. This stage is critical because Harvesting/collecting is the function

that provides the supply for the production process, including supply provided bythird parties. In

the Production/packing function, the asparagus is then processed and packed according to the

requirements of customers. It is important to mention that within this stage DanPer develop three

lines of asparagus production: fresh, frozen and preserved39.

The outbound logistics is another stage critical for the export process, mainly for the fresh

asparagus: in this stage proper handling of the (fresh) product from the factory up to the port or

FríoAéreo warehouse must be ensured, along with the control of temperature.

The support process as well as the strategic process complement the activities developed in the

execution process. Within these secondary activities, the key functions are Research and

development (R&D), Process control, Systems and quality assurance and Human resources. R&D is

responsible for developing new products or upgrading the existing ones, as well as for improving

the production process. Process control and Systems and quality assurance are in charge of

product sampling and of testing products’ compliance to specified requirements.

39

Roughly speaking, fresh asparagus represents around the 20% of his sales, whilst preserved asparagus explain 70% and frozen 10%.

[19]

Figure 3

THE VALUE CHAIN OF DANPER TRUJILLO40

Notes: 1/. Involve the strategic planning and direction revision. 2/. Customer (satisfaction) includes some activities of

sales (post-sales).

Source: DanPer Trujillo

Finally, Human resources has become a very important function for DanPer. This business is highly

labour intensive and the implementation of programs to improve the labour conditions is

essential: the personnel’s engagement and the individual contribution to the company continual

improvement philosophy, have been key factors contributing to the rapid growth of DanPer.

In Figure 4 is sketched the Value Chain of FríoAéreo. Satisfying customers’ requirements by

providing storage and cold services,is the corebusiness. In the Execution Stage storage and cold

services are provided, supplemented by quality control and product control. Quality control

concerns product sampling and analysis of the asparagus characteristics, whereas product control

is applied to trace temperature and humidity of products until they are loaded onto the aircraft.

The information gathered through this process is used to develop reports describing product

quality and rankings that are then distributed to FríoAéreo’s associates.

40

For more details of the functions and associated activities of DanPer Trujillo please refer to the annex 8.

Harvesting/

Collecting

Production/

Packing

Outbound

logistic

Marketing

& sales2/.

Production

planning

Human resources

Research & development

Board of Directors

Integrated Management System1/.

Strategic

process

Management & administration

Support

process

Execution

process

Process control

Customer

requirement

C

U

S

T

O

M

E

R2/.

Maintenance & Warehousing

Systems and Quality Assurance

[20]

Figure 4

THE VALUE CHAIN OF FRIO AEREO41

Source: FríoAéreo

The functions belonging to the Support Process provide services to the ExecutionProcess, including

maintenance of facilities and equipment.

4.3. Key value drivers

According to the Methodology Guide of ISO (2010b) the value drivers are crucial organizational

capabilities that give a firm a competitive advantage.

The key functions within the execution process of DanPer are Production Planning,

Production/packing and Outbound logistic, whilst quality assurance, human resources and

research and development are the most important support functions.

FríoAéreo acts as an“Outbound logistics” service provider and its execution process, as a whole, is

critical. In addition, FríoAéreo provides procurement services for selected goods (e.g. pallets), with

a view to offer cost reductions for its associates.

For the asparagus industry, efficient control methods of pests and diseases, quality of production

process and service and client centricity were identified as key value drivers. The highly

competitive and demanding international market requires strict and efficient control systems for

hygiene, handling and product quality. This implies significant investment in R&D for innovation

and continual improvement of production processes.

41

For more details of the functions and associated activities of FríoAéreo please refer to the annex 9.

Management

of assistants

Maintenance of plant

and equipment

Sanitation

Buying office

Legal staff

Information

Quality control

Handling, palletizing and cooling of perishable

Security management

Administration

& finance

Strategic management &

commercial

Institutional

relations

Project

management

Management

system

Support

process

Execution

process

Strategic

process

C

U

S

T

O

M

E

R

[21]

In DanPer’s case, efficient control methods of pests and diseases, vertical integration,

standardization, client centricity, personal recruitment were identified as key value drivers. Many

of them are related with the ability to ensure reliable asparagus supply, a key success factor for

this industry. DanPer is keen to establish relationships with farmers and suppliers in orders to

standardize process and quality, and to assure a fast, reliable and flexible service to customers.

In FríoAéreo’s case, quality service and service efficiency were identified as key value drivers.

Performing cold chain management is essential for agro-exporters of fresh products, and the

company efforts focus on keepingoutstanding service and process control. To support the

continual improvement of quality, quality reports are regularly delivered to associates and awards

assigned.

The listof value drivers for the fresh asparagus industry developed on the basis of information

provided by DanPer and FríoAéreo,and complemented by information derived from existing

literature,is presented in Table 6.

Table 6

VALUE DRIVERS OF THE FRESH ASPARAGUS INDUSTRY

Value drivers Description Source

Client centricity Ability to adapt processes and service offering to

accommodate varying customer needs

FAO, O’Brien &

Diaz, DanPer

Commercial effectiveness Ability to implement strategies based on prices,

quality and enforce contracts DanPer

Innovation effectiveness

Ability to innovate and improve the product trough

the implementation of new technologies and

process

FAO, O’Brien &

Diaz, DanPer

Efficient control methods

of pests and diseases

Ability to control and eliminate any kind of pest or

disease FAO

Global footprint Broad, international coverage in terms of

operations and sales

FAO, O’Brien &

Diaz, Shimizu

Market knowledge Ability to identify target markets and/or countries DanPer

Partnerships Ability to initiate partnerships with other

companies to exploit scale effects

FAO, O’Brien &

Diaz

Personal recruitment

Ability of recruiting and

retainingqualifiedpersonnelforeach function, and

ofimplementing apositivelabour climate

DanPer

Quality of production

processes

Ability to minimize failure rate in production and

increase asparagus quality

FAO, O’Brien

&Diaz

Quality of service Ability to maintain safe conditions in terminal, FríoAéreo

[22]

Value drivers Description Source

constant customer feedback and standard of

quality inspectors to categorize fresh green

asparagus

Service efficiency Ability to keep operating the cold chambers with

the lowest replacement refrigerants FríoAéreo

Standardization

effectiveness

Ability to implement, adopt and integrate

standards to improve the product and

commercialization process with customers

DanPer

Transparency Ability to maintain the handling process under

control FríoAéreo

Vertical integration

Ability to develop relationship and network with

agents at downstream and upstream level to

improve process

DanPer

Source: FAO, O’Brien & Diaz, FríoAéreo and DanPer Trujillo, ISO Methodology

5. SCOPE OF THE ASSESSMENT

DanPer Trujillo takes part in almost all stages of the industry value chain, which involve the

processes from harvestingto export (product placed on port), whereas FríoAéreo42operates as a

service provider in the delivery of the product to his final destination, when the product is loaded

on the aircrafts (see Figure 5).

Figure 5

INDUSTRY VALUE CHAIN OF FRESH ASPARAGUS

Therefore, the assessment can focus on the functions related with Inbound and Outbound logistic,

Productions/operations and Marketing and Sales, which can be identified as the main functions of

42

The goal of the service provided by FríoAéreo is to maintain the quality of the product ensuring the handling and cold chain during the transit of the product through the airport.

Harvesting

Production/

Packing

Storage

Outbound

logistic

Shipped

FríoAéreo Farmers

Customer

IN SCOPE

Agro-exporters

[23]

the industry. However, Human resources and Research and Development can be included as

complementary functions in the development of the industry.

The main reason why they were selected only certain business functions are explained by the

leading role of standards seems to have in the development of the production process.

6. USE OF STANDARDS BY THE COMPANIES: STANDARDS USED IN THE COMPANY VALUE CHAIN

In figures 6 and 7 are listed the most important standards and regulations usedby DanPer Trujillo

and FríoAéreo. Both figures list the standards classified by Product43, Process44 and Compliance

(for Health, Safety and Environmental Protection – HSE)45. The relation between these standards

and the business functions is highlighted in the annexes 8 and 9.

In DanPer’s case, most of the standards, regulations or certifications listed in the column of

compliance standards are applied by each operational business functions (see Table7). It is

important to note that governments and traders are highly demanding in terms of compliance to

health, safety and environmental protection requirements for agricultural products entering their

countries, therefore any new supplier must have a series of certifications demonstrating to

customs and health authorities that the product being imported is fit for human consumption.

Inbound logistic and Productions/Operations make a significant use of standards and regulations,

concerning primarily good manufacturing practices, control of pesticides, maximum levels of

contaminants or phytosanitary aspects.

Figure 6

LIST OF STANDARDS, CERTIFICATIONS AND REGULATIONS ACCOMPLISHED BY DANPER TRUJILLO

Product Process Compliance (HSE)

43

Standards that provide specifications for products and materials in terms of physical and chemical properties, interfaces and underlying test methods, terminology or categorization. 44

Standards that provide specifications for processes in terms of activities and process flows, process performance requirements and indicators, and process management practices 45

Standards that define restrictions on products and services or require specific performance level to match HSE requirements. Standards within this category are often mixed with product standards, e.g. certain product or material properties can be prescribed by safety requirements. However, it is useful to consider this as a separate type and to include in it all standards whose main purpose is to define HSE requirements.

Standards

[24]

NTP 011.109 (2008): ASPARAGUS: Asparagus fresh. Requirements.

NTP 011.116 (1991) ASPARAGUS. Refrigerated Transportation Guide

The Control of Pesticides Regulation 1986

NTP 209.401(2001) ASPARAGUS. Hygienic practices for processing of fresh asparagus

CAC / Vol. III Second Edition 1993. Maximum Limits for Pesticide Residues

21 CFR 110: UK Statutory MRLs

NTP 209.402(2003) ASPARAGUS. Good Agricultural Practices

Regulation EU Nº 765/2010

Certification ISO 9001 version 2008

European Biocides Scheme – Biocidal Product Directive 98/8/EC

Certification ISO 14001 version 2004

Directive 79/117/EEC: Active substances prohibited

Certification OHSAS 18001 version 2007

The Japan Food Chemical Research Foundation.

SA8000 (Social Accountability International)

Certification Globalgap version 03

Certification USGAP Version 08.06

Certification HACCP according to Codex Alimentarius annex to CAP/ RCP 1-1969 (Rev 04 - 2003)

Certification BASC version 03-2008

Canadian Environmental Protection Act 1999

Protocol Albert Heijn

ETI (Ethical Trading Initiative)

The Food & Environment Protection Act 1985

The Food Safety Act 1990


In FríoAéreo’s case (see Figure 7), quality and environmental management (ISO 9 000 and ISO

14 000) are the main international standards used by the Management & Administration and

Production/Operations business functions. TheProduction/Operations and Post-Service business

functions also use national standards re: fresh asparagus requirements and sampling procedures,

which are very important for their activities.

[25]

Figure 7

LIST OF STANDARDS, CERTIFICATIONS AND REGULATIONS ACCOMPLISHED BY FRÍO AÉREO


NTP 011.109:2008, ASPARAGUS: Asparagus fresh. Requirements.

NTP-ISO 2859-1 1999: Sampling procedures for inspection by attributes

Business Alliance for Secure Commerce (BASC)

NTP 011.109:2008, ASPARAGUS: Asparagus fresh. Requirements.

NTP ISO 9000:2007, Systems Quality Management. Fundamentals and Vocabulary

Directorate General of Civil Aviation (DGAC)

ISO 9001: 2008, Systems Quality Management. Requirements.

GS1: Global Traceability Conformance

ISO 14001:2004, Environmental Management Systems: Requirements with guidance for users

ISO 14004:2004, Environmental Management Systems. General guidelines on principles, systems and support techniques

Source: FríoAéreo

Finally, the certification BASC 46 which addressesthe problem of concealing contraband in

commercial trade is employed in the operations of Procurement, Production/Operations and Post-

Service.

6.1. The impact map of standards used by firms

The main impacts of the standards on the activities carried by each business function are

presented in tables 7 and 8, but a more comprehensive list of the standards impact map is

presented in annexes 10 and 11.

In DanPer’s case, the implementation of national and international standards such as NTP 011.109,

NTP 209.401, ISO 9 001 and 14 001, has had a substantial impact in the development of its

operations. For example, at the production level, the implementation of standards has helped to

organize processes in compliance with regulations. Asparagus is an agro-product that is subject to

certain healthcare regulations in the U.S. and the European Union, and the application of

46

BASC’s security standards are designed to significantly improve security practices and in the process deter contraband

smugglers and terrorists from using their companies to introduce contraband and implements of terror in legitimate

shipments.

Standards

[26]

standards such as the NTP 011.109 and NTP 209.401, which set minimum requirements in

production and hygienic practices for processing asparagus, has greatly helped to match

regulatory requirements. As a matter of fact, the NTP 011.109 was revisedin 2008 in order to align

its provisions to new, stricter regulatory requirements.

But the most important impact of standards wasidentified in the Marketing and Sales department.

Conformity to standards and certification against major standards (such as ISO 9001, HACCP,

Global GAP, and others) is considered critical by DanPer because it supports customers’ perception

of the company’s commitment to quality, safety and good practices, it helps to build confidence

and to access new markets.

Table 7

THE IMPACT MAP OF STANDARDS OF DANPER

Function Activities Impacts Description

Production /

Operations

HSE (health, safety and

environment)

Easier compliance with

regulatory requirements

Influence in standard-setting process and

proactive application of standards helps to

reduce potential disadvantages from

regulations

Better

health/safety/environmental

compliance

HSE management based on standards can be

implemented more effectively

Marketing and

sales

Marketing activities,

client development Better customer information

Communicating product and service

specifications and requirements to potential

customers is more effective when referring to

standards

Sales Higher sales Sales are higher due to customer confidence in

standardized products and services

Source: DanPer Trujillo, ISO Methodology

In FríoAéreo’s case, the application of standards like NTP 011.109, NTP-ISO 2859-1 and ISO 14001

has had a significant impact in the operations process: the procedures to achieve compliance with

customers requirements regarding appropriate level of humidity and temperature for the

products stored and handled prior to shipment to their final destination, are now implemented in

a more effective way.

The adoption of those standards has also allowed FríoAéreo to exploit the information generated

at the production process, to develop better communication with its clients. Continual flow of

information provided to its clients has contributed to boost the competitiveness of the industry.

Table 8

[27]

THE IMPACT MAP OF STANDARDS OF FRÍO AÉREO


Production /

Operations

Environmental

conditions assurance

Better environmental

management

Environmental management based on

standards can be implemented more

effectively in order to maintain a right measure

of temperature and humidity

Service Customer care and

technical support Better customer communication

You can communicate information about

products and services to customers more

effectively by using standardized specifications

Source: FríoAéreo, ISO Methodology

[28]

7. SELECTION OF OPERATIONAL INDICATORS TO MEASURE THE IMPACTS OF STANDARDS

To quantify the impact of standardsit is necessary to identify operational indicators associated to the activities performed by the business

functions for which standards have a significant role – these indicators are linked to the value drivers described in the previous section.

In tables 9 and 10, it is presented a list of operational indicators that were obtained from interviews with each company. The quantification of

the standards impact on them (actually on the subset of them for which it was possible to gather relevant data) leads to the assessment of the

standards value for the company.

Table 9

OPERATIONAL INDICATORS OF DANPER

Selected business functions (BF)

Related activities Value drivers Standards and regulations used

Operational indicators Definition of the indicators

Field Operations

i. Planning ii. Irrigation

iii. Pest control iv. Operations (from

planting to harvesting)

v. Personnel management

Quality and safety of products

Optimal crops yield

Personnelengagement

HACCP (Codex) Codex Stan 193-1995 ISO 9001

1) Quality of harvested crops

2) Field productivity 3) Waste 4) Personnel qualification,

motivation and

satisfaction

1) % of products by category of quality

2) Volume of harvested product/cost

3) % of waste 4) Based on personnel

surveys and other (e.g. training)

Procurement (crops)

i. Planning

ii. Quality control iii. Procurement of

crops

Quality control

Cost effectiveness

NTP 209.401: 2001 NTP 209.402: 2003 Regulation (EC) No

2073/2005 Regulation (EC) No

178/2002 The Control of

1) The actual kilogram of admitted to the total kilogram forecasted;

2) The actual kilogram of

admitted from own fundos over the total

1) Assess the compliance of raw material supply against plan;

2) Assess the percentage of inputs from the enterprise’s fields in relation to third-party

[29]




Pesticides Regulation 1986

HACCP ISO 9001 ISO 14001 OHSAS 18001 SA 8000 Codex Stan 192-1995

kilogram admitted;

3) Number of orders that do not meet the specifications over the total number of orders

fields; 3) Measures the level of non

conformity of suppliers

Logistics/procurement

i. Procurement (all goods except crops)

ii. Handling incoming materials and products

iii. Transportation

Quality of supply/suppliers

Cost effectiveness

Efficiency of transport

ISO 9001 CAC/RCP 60-2005 Regulation (EC) No

2023/2006

1) Selection of suppliers 2) Cost

1) Ratio of suppliers in top quality ranking (cat A and B)

2) Cost of purchased goods

Production / Operations

i. All activities ii. Processing – fresh

iii. Processing – canned

iv. Processing – frozen

v. Quality assurance vi. HSE (health, safety

and environment)

Quality and safety

of products Efficiency of

processes

Standardization

NTP 011.109: 2008 NTP 209.401: 2001 NTP 209.402: 2003 21 CFR 110 Regulation (EC) No

2073/2005 The Food &

Environment Protection Act 1985


HACCP ISO 9001 ISO 14001 OHSAS 18001 SA 8000 y ETI Codex STAN 1-1985

1) The actual production costs over the planned production cost (labour force, input material);

2) The ratio of the top quality (Category I) to the total production;

3) Leftover or discarded rate;

4) Profitability of each product category;

5) Production efficiency on asparagus(Volume of production per worker);

6) Production volume over labour cost or capital cost

1) Measures the efficiency of

production (deviation from plan);

2) % of high-quality products over the total;

3) Self-explanatory; 4) Self-explanatory; 5) Assesses the productivity

of workers; 6) Assesses the

overallproductivity

[30]




Research&Development

i. Investigation on harvest

ii. Production process improvement

iii. Product development

Customer orientation

Efficiency of production processes

Standardization

NTP 209.401: 2001 NTP 209.402: 2003 21 CFR 110 The Food Safety Act

1990 HACCP ISO 9001 ISO 14001 OHSAS 18001

1) Number of new products accepted by customers over the number of products proposedby DanPer

2) Complains on new products

3) Number of projects initiated per month

4) % of projects completed on time

5) Number of new processesdeployed divided by the number ofnew processes developed

a) The first two indicators seek to assess the effectiveness of new product development;

b) Indicators 3 and 4 concern the efficiency of R&D work

c) The fifth indicator assesses the effectivenessofR&D’s process improvementactivities

Marketing & sales

i. All activities ii. Marketing

activities, client development

iii. Market analysis, research

iv. Contracting v. Sales

Customer focus, customer service

Sales effectiveness

Social responsibility

Innovation effectiveness

Market knowledge

NTP 011.109: 2008 NTP 209.401: 2001 Regulation (EC) No

2377/1999 HACCP ISO 9001 ISO 14001 OHSAS 18001 The Food Safety Act

1990

1) Volume of sales per person;

2) Average growth of profits;

3) The actual sales over the forecasted sales;

4) The total DanPer’s exports over total industry’s export;

5) Number of customer complaints (fresh or preserved products)

a) The first and third indicator assess the productivity of the sales function;

b) The third indicator assesses the company’s profitability;

c) The fourth indicator assesses Danper’s market share;

d) The fifth indicatorassesses the degree of customer dissatisfaction

Human Resources

i. Recruitment ii. Salaries

Transparency Personnel

SA 8000 OHSAS 18001

1) Personnel enquiries: working environment

1) Measures personnel satisfaction;

[31]




iii. Personnel management

iv. Training v. Employees and

social programmes

engagement and development

ISO 9001 2) Number of employees or contract workers to the total number of personnel required on time

3) Salary increase 4) Personnel improvement

(training) 5) Retention of employees

2) Measures the efficiency of sourcing;

3) Self-explanatory 4) Measures investment in

personnel improvement 5) Indirect measure of

personnel satisfaction

Source: DanPer, ISO Methodology

Table 10

OPERATIONAL INDICATORS OF FRÍO AÉREO




Production / Operations

i. All activities

ii. Quality assurance

iii. Environmental


iv. HSE (health, safety and environment)

Client centricity

Quality of production processes

Quality of service

Service efficiency

NTP 011.109:2008 NTP-ISO 2859-1 1999 NTP ISO 9000:2007 ISO 9001: 2008 ISO 14001:2004 ISO 14004:2004 GS1: Global

Traceability Conformance

BASC DGAC

1) Average rating of quality Inspectors;

2) Microbiological contamination control in a controlled environment;

3) Consumption of refrigerant;

4) Percentage of deviations* from cargo handling;

5) Percentage of damaged products receipted;

1) Assesses fresh green asparagus products according to the categorization of NTP 011.109:2008;

2) Monitors the refrigeration chambers to ensure that they remain within the set limits of microbiological contamination;

3) Self-explanatory; 4) Monitors the handling of

cargos at

[32]




FrioAereo’sfacilities; 5) Monitorsthe %of products

arrived in unsuitable conditions

Post-service

i. All activities ii. Processing

iii. Quality assurance iv. HSE (health, safety

and environment)

Quality of production processes

Standardization

NTP 011.109:2008

NTP-ISO 2859-1 1999 BASC

DGAC

1) Percentage of cargo with temperature monitoring in platform or ramp;

2) The Percentage of complaints addressed;

1) % of cargo with plotted (temperature) – when the cargo has leftFrioAéreo’s warehouse, until it is uploaded onto the aircraft;

2) Assessescustomer satisfaction.

Note: (*) Anything that harms the customer's property caused by improper handling of the product in the storehouse.

Source: FríoAéreo, FAO, O’Brien & Diaz, ISO Methodology

[33]

8. CALCULATION OF THE ECONOMIC BENEFITS OF STANDARDS

The quantitative analysis is performed only for DanPer Trujillo. Considering the focus of this study,

the analysis was restricted to the asparagus business.

FríoAéreo is an important service provider but a rather small company and the available data did

not allow to quantify the impact of standards on its operational indicators. In its case, it is also

important to note that the standards adopted and promoted by the company have a significant

impact at the overall industry level – but this analysis was beyond the scope of the study.

Seven business functions of DanPer were analyzed, and the quantitative assessment was

performed on those for which the impact of standards is most significant: Field Operations,

Production/Operations, Marketing &Sales and Research & Development.

In Table 10 are presented the main results for the four business functions analyzed.

Table 10

ECONOMIC BENEFITS OF STANDARDS OFDANPER TRUJILLO, ON THE AVERAGE ANNUAL GROSS

PROFITS OF 2007-2010

Selected business

functions (BF) Operational indicators

Financial impact for the

operational indicator

Field Operations I. Field productivity I. USD 321,9 thousand (*)

Production/Operations

I. The actual production costs over the

planned production cost

II. Production efficiency on asparagus

I. USD 71,4 thousand (**)

II. USD 16,6 thousand (*)

Marketing & Sales I. Average growth of profits I. USD 536,8 thousand

Research &Development

I. Number of new products accepted by

customers over the number of products

offered by DanPer

I. USD 39,9 thousand (**)

Note:(*)to avoid double counting, this contribution is considered embedded in the average growth of profits considered

for the Marketing and Sales function. (**) These have been considered as specific “correcting factors” to the average

growth of profits and summed-up.


To support the quantitative analysis, and in particular the translation of the operational indicators

in financial metrics, the following assumptions were made:

[34]

1) Sales and gross profit figures are always referred to the total business of the firm47. As a

consequence, when the analysis focuses on indicators referring to specific product

categories (e.g. fresh or preserved asparagus), the estimated economic values presented

in Table 10, calculated on the basis of the % of the total business derived from the

selected categories, should be considered as a close approximation of the actual economic

benefits of standards.

2) The annual average gross profit considered for the period 2007-2010, 23,6%, was

estimatedon the basis of the average gross profits of competitors comparable in size to

DanPer48 (such as Agroindustrias AIB49 and Camposol50). It was also assumed that the total

gross profits was on average constant over the three years, corresponding to USD 2 147,3

thousand per year.

The details of the assessment for the four selected business functions are given below.

Field Operations

Four key operational indicators (KOI) are considered forthis business function, but only one of

them, field productivity could be assessed (information re: others KOI was unavailable or not

relevant).

The quantitative assessment of field productivity was conducted as described below:

(1) The volume of asparagus coming from fields and ranked as top quality (this is the only

crop used for fresh products) increased from 1,2 MT in 2007 to 4,4 MT in 2010. A

difference of 3,2 MT.

(2) Taking into account that the utilization rate of raw material in fresh products is about 70%,

the volume of products exported amounted to 816,4 thousand kilograms in 2007 and

3 099,3 thousand kilograms in 2010.

(3) Approximately, the sale price and product cost51 for fresh asparagus (exported) were USD

2,36 and USD 1,25 per kilogram in 2007 and USD 2,72 and USD 1,25 per kilogram in 2010.

47

The total turnover includes figures of sales data of asparagus, artichokes, peppers, and the other products elaborated by DanPer. 48

DanPer could not provide on time his average gross profits over the period. 49

The information was gathered of the financial accounts published on Conasev (Business and Securities National Supervisory Commission of Peru). <http://www.conasev.gob.pe/eeff/eeff_x_empresa.asp> 50

Camposol Holding Plc (2011) Fourth Quarter and preliminary Full Year 2010 Results.<http://hugin.info/138464/R/1492669/428469.pdf> 51

The price used was the average price of fresh asparagus exported, obtained from the statistics of asparagus exported by the firm, while he cost was the average price provided by the firm.

[35]

(4) Therefore, the income generated by the exports of those quantities in 2007 and 2010

were USD 1 929 thousand (USD 2,36 X 816,4 thousand kg.) and USD 8 420 thousand (USD

2,72 X 3 099,3 thousand kg.), respectively. At the same time, the cost were USD 1 458

thousand (USD 1,25 X 1,2 MT) in 2007 and USD 5 534 thousand in 2010 (USD 1,25 X 4,4

MT).

(5) This means a gross profit increase of USD 2 415 thousand for the 2007-2010 period or,

assuming for simplicity a linear growth over the three years, anannual gross profit of USD

805 thousand.

(6) According to the managers of DanPer, the use of standards in field operations (notably

NTP 209.402, NTP 011.109, HACCP, OHSAS 18001, SA 8000, and others) has been an

important catalyser to improve the ranked products obtained in fields. Through the

assessment process, it was estimated that the use of standards contributed for about

40%to the results indicated under step 5: i.e. an average contribution of USD 321,9

thousand to the company annual gross profits.


Six KOIs were considered for this business function, but the quantitative assessment was limited to

two: the actual production costs over the planned production cost and production efficiency on

asparagus (data re: others KOI were unavailable or not relevant).

The quantitative assessment of actual production costs versus planned production cost was

conducted as follows:

(1) The assessment concerns the labour cost incurred to produce white preserved asparagus

exported. Planned and actual labour cost for 2007 and 2010 are compared and reduced

deltas (planned vs. actual) are accounted as cost savings.

(2) In 2007, the planned labour cost per worker was USD 0,32 per kilogram with a resulting

actual cost of USD 0,40 per kilogram. Instead, in 2010, the planned and actual labour costs

were, respectively, USD 0,46 and USD 0,53 per kilogram.

(3) The amount of preserved asparagus exported in the period of analysis (2007 and 2010)

were 21,5 MT and 17,1 MT, correspondingly.

(4) Therefore, the actual labour cost exceeded the planned cost by 1 720 thousand USD in

2007 and by 1 197 thousand USD in 2010 (respectively, 25% and 15,2% of the planned

costs). This means improved cost planning, with a decrease of the labour cost delta of 523

thousand USD (2010 vs. 2007), or 174,3 thousand USD per year. This figure is assumed as

labour cost savings.

[36]

(5) The use of standards (in particular ISO 9001 supporting a thoroughimplementation of

continual improvement philosophy) has significantly contributed to improve process

efficiency. DanPer’s management estimated that the implementation of standards

contributedby 40% to the results indicated under item 4 – i.e.anaverage annual cost

savings of USD 71,4 thousand (40% of 178,4 thousand USD).

The assessment of the KOI production efficiency on asparagus was conducted as follows:

(1) The average production per worker is determined by dividing the volume of products

exported (400,9 thousand kilograms in 2007 and 1 389,5 thousand kilograms in 2010) by

the number of workers in the production of preserved asparagus (2 500 in 2007 and 3 500

in 2010). This gives 160 kilograms per worker in 2007 and 397 in 2010.

(2) Considering the average price of export in 2007 and 2010, (USD 0,38 and USD 0,49 per

kilogram), improvements in asparagus production efficiency allowed to grow from USD

150 843 per capita in 2007 to USD 677 945 per capita in 201052.

(3) This means a difference of USD 527 101, or, assuming a linear growth for the three years,

an average annual increase of USD 175 700. Assuming the average percentage of gross

profits (23,6%), this results in an annual contribution to the company gross profit of USD

41 465.

(4) The use of standards (and notably the implementation of ISO 9001) has significantly

contributed to improve process efficiency – helping notably to improve raw materials

handling, reduce failure rates and related correcting actions. DanPer’s management

estimated that the implementation of standards contributed by 40% to these results – i.e.

an average annual contribution to the company gross profit of USD 16 600 (40% of USD

41 465).

Marketing & Sales

DanPer exports nearly the totality of its products (75% of total production is exported to USA and

Europe). These target markets, and the buyers serving them, are extremely demanding in terms of

safety, traceability and quality requirements.

Many customers (notably large department store chains) demand certifications against several

standards – in these cases, certification is “mandatory” to achieve contracts. However, even for

those customers for which certifications are not directly requested, commitment to standards and

52

The figures were obtaining by multiplying the average production per worker with the average price of export and with the number of workers in each of the years subject to analysis. E.g. in 2007 the operation was 160 (kilograms per worker) by USD 0,38 per kilogram and by 2 500 (total number of workers) giving us a figure of USD 150 843.

[37]

certifications strongly support the image of and confidence in the company, making easier to

reach contractual agreements.

Five KOIs are considered for this business function,but the quantitative assessment was limited to

one: average growth of profits (data re: others KOIs were unavailable or not relevant).

The assessment for the KOI Average growth of profits was conducted as follows:

(1) The total company sales increased from USD 62 340 thousand in 2007 to USD 89 610

thousand in 2010. This represents a USD 27 270 thousand difference.

(2) Assuming for simplicity a linear growth over the three years, this means an average annual

sales increase of USD 9 090. Considering the average gross profits for the period (23,6%),

this gives an annual gross profit average of USD 2 147,3 thousand per year. Asparagus

export accounts for approximately 50% of that amount, i.e. USD 1 073,7 thousand.

(3) As noted above, compliance with regulations (relevant to the export markets), and

certifications and extensive useof standards(e.g. ISO 9001, OHSAS 18001, HACCP, Global

GAP, Regulation (EC) No 2377/1999, ETI, etc.) are considered a critical factor for DanPer’s

sales growth. DanPer’s management estimated that certifications and implementation of

standards gave a determinant contribution to increasing sales in about 50% of the cases.

This translates in a contribution to the average annual gross profit of USD 536,8 thousand

(50% of USD 1 073,7 thousand).

Research&Development

The use of standards by this business function has had a seminal impact, supporting the

conception of new ways to improve production processes or to create new product lines. What’s

more, using standards has made easier to design new products according to international

requirements and/or to adapt products to customer’s requirements in shortertime.

Of the five KOI identified for this business function, only one could be assessed, number of new

products accepted by customers over the number of products offered by DanPer.

The assessment was conducted as indicated below:

(1) The overall sales value of new products in 2007 was only USD 17 035, whilst in 2010

reached USD 1 031,5 thousand. An increase of USD 1 014,5 thousand or, assuming for

simplicity a linear growth, an annual increase ofUSD 338,2 thousand.

(2) Considering the average gross profits margin (23,6%) this represents an annual

contribution of USD 79,9 thousand to the total company gross-profit.

[38]

(3) The asparagus business represent 50% of the total, therefore the annual contribution on

gross profits derived from asparagus can be estimated in USD 39,9 thousand.

The summary of the financial impacts of the use of standards for the selected business functions is

presented in Table 11. The total economic impact of standards was estimated in a contribution of

648 158 USD to the company annual gross profit.

This value representsabout 30% of the company gross profit or about 1,7% of the total company

turnover derived from asparagus in 2010.

Table 11

SUMMARY OF THE ECONOMIC BENEFITS OF STANDARDS OF DANPER TRUJILLO, ON THE AVERAGE

ANNUAL GROSS PROFITS OF 2007-2010

Note:(*) to avoid double counting, this contribution is considered embedded in the average growth of profits

considered for the Marketing and Sales function. (**)This amount does not account the estimated value for

the KOI: Production efficiency on asparagus (USD 16,6 thousand), in order to avoid double counting.


9. QUALITATIVE AND SEMI-QUANTITATIVE CONSIDERATIONS

As previously noted, the quantitative assessment was completed for four business functions from

the seven identified. Human Resources, however, deserve further consideration in order to

complement the analysis conducted so far.

DanPer’s awareness and commitment on social responsibility matters is an important factor

contributing to its success. This is for its influence on employees’ performances and because this

attitude is considered very positively by buyers (in support of their own accountability in terms of

supply chain, and as a further credential of the company’s seriousness and qualification).

Selected business functions (BF) Financial impact of standards on the

whole BF

Field Operations Total sum = USD 321,9 thousand(*)

Production/Operations Total sum = USD 71,4 thousand (**)

Marketing & Sales Total sum = USD 536,8 thousand

Research & Development Total sum = USD 39,9 thousand

Total impact of standards Total sum = USD 648,2 thousand

[39]

Considering DanPer’s attitude on standards, and its use of standards also in this area (e.g. OHSAS

18001), an attempt was made to assess the impact of standards on the activities of Human

Resources, as well.

Five KOIs were identified (as reported in table 9); however, the lack of specific data did not allow

to perform the assessment.

For example, in the case of the “personnel enquiries” (concerning the working environment),

DanPer has recently implemented a survey for its employees, butthere is no reference to historical

data to evaluate changes.

In the case of “personnel improvement” (training) the use of standards may have a direct impact

as a mean to facilitate transfer of information and knowledge, but no relevant data were found.

No direct correlation between the application of standards and KOIs such as “salary increase” or

“retention of employees53” was identified.

However, the company management is well aware of the importance of fair personnel practices

and consideration of social matters. This attitude seems to have contributed significantly to the

engagement and motivation of personnel, supporting the effective and rapid implementation of

standards, whose benefits are reflected in the rapid growth experienced in these years.

Another business function critical in the production process is procurement and logistic. Although

this business function does not base directly its activities on standards, it does it indirectly through

the specifications provided by other departments that extensively apply standards in their

processes. A more extensive application of standards by this business function could improve, for

example, its purchase program to achieve further cost savings and to strengthen its partnership

with suppliers.

Some of the KOI’s defined in section seven could not be presented in section eight because it was

not possible to quantify directly their contributions on the company’s value creation. However, in

this section, a qualitative or semi-quantitative assessment is described below.

Within the Field Operation business function, the KOI quality of the harvested crops was not

assessed, because we were not able to find a way to quantify the extra value derived from top

quality products and to avoid a double counting derived from others KOI in Marketing & Sales

function. However, DanPer’s management indicated that the implementation of standards has

also given an important contribution to achieve a significant increase of the proportion of

asparagus ranked as “top quality products", from 31,5% of the total in 2007 to 45,4% in 2010.

53

The outstanding agricultural growth in the north of Peru is demanding more workers, therefore the hiring process has become very complex to firms in a job market without enough qualified labour force, especially during the high seasonality season (mid-year).

[40]

Finally, it is also important to underline that DanPer’s has been able to grow faster than the sector:

its market share of Peruvian’sasparagus exports increased from 8.5 % in 2007 to 9.5% in 2010.

DanPer’s management believes that standards, and the company’s attitude to standards, have

significantly contributed to its success.

As a result of this short analysis, it seems reasonable to infer that the value of standards for

DanPer exceeds the figures presented in Table 11.

However, it is also important to consider that, whilst the implementation of standards has

contributed to DanPer’sperformances and supported its impressive growth, the latter has

primarily been led by the expansion of global demand and the existence of Free Trade

Agreements: factors that cannot be isolated from the pure impact of the use of standards.

10. EVALUATION OF THE RESULTS

DanPer has been active in the market for nearly 17 years and since 2004 has been implementing

key standards and certifications such as NTP 011.109, NTP 011.116, NTP 209.401, ISO 9001,

GlobalGAP, USGAP, OHSAS 18001, HACCP, and others. Not all its business functions apply

standards in their activities, but the company intends to further expand their application in the

future.

The economic value of standards presented table 11 provides an estimate for the company’s

asparagus business. Extending the analysis to the full range of agricultural products produced by

DanPer (including artichokes, pepper, beans and fruits), would certainly increase the figures of

Table 11.

It is also likely that standards have an impact on some of the operational indicators that could not

be quantified during the assessment.

According to DanPer’s managers, standards have an essential role. They have helped and continue

to facilitate the opening of markets and getting access to new customers. As analyzed in this

study, this contribution generates substantial economic value.

In addition, standards have been valuable tools assisting DanPer in improving its production

processes and activities in a variety of areas.

Albeit the methodology was applied to one company, it would be worth to consider its application

to cover the whole (asparagus) sector or even to the Peruvian agro-export industry.

In these sectors operate a significant number of medium and small firms that are following the

step undertaken by larger companies. In a broad sense, the implementation of standards is

[41]

contributing to change the sector’s landscape and this is reflected in the improved

competitiveness, technological transfer, high demand of employment, process improvements,

access to markets and attraction of new investors and customers.

11. CONCLUSIONS

DanPer has been active in the market for nearly 17 years, and has implemented key standards

such as NTP 011.109, NTP 011.116, NTP 209.401, ISO 9001, GlobalGAP, USGAP, OHSAS 18001, and

HACCP since 2004. Not all its business functions apply standards, but the company intends to

further expand their application in future.

The economic value of standards shown in Table 11 provides an estimate of the company’s

asparagus business. Extending the analysis to the full range of DanPer’s agricultural products

(including artichokes, pepper, beans and fruits) would certainly increase the figures in the table. It

is also likely that standards have an impact on some of the operational indicators that could not be

quantified during the assessment.

According to DanPer’s managers, standards play an essential role. They continue to facilitate

access to markets and new customers. As analyzed in this study, this contribution generates

substantial economic value. In addition, standards have been valuable tools in helping DanPer to

improve its production processes and activities in several areas.

Although the methodology was fully applied to only one (leading) company, and in qualitative

terms to another key player of the sector, the results enable us to consider the reality that

standards create value.

In the future it would be worthwhile to consider the application of the methodology to the whole

asparagus sector or even to the total Peruvian agro-export industry.

Many small to medium enterprises operate in these industries and follow the steps undertaken by

larger companies. In a broad sense, the implementation of standards is contributing to a change in

the landscape of the sector, and this is reflected in improved competitiveness, technology

transfer, high employment, process improvements, access to markets and the growing interest of

new investors and customers.

[42]

REFERENCES

(A) AGROBANCO (2007). Cultivo del Espárrago. Área de Desarrollo – Banco Agropecuario.

Available in: <www.agrobanco.com.pe/cultivo_del_esparrago.pdf>

(B) BWS (2003). IndustryReport – Espárragos: Busca consolidarse como el primer exportador

mundial. Department of Economic Studies – Wiese Sudameris Bank. Available in:

<www.scotiabank.com.pe/i_financiera/pdf/sectorial/20030922_sec_es_esparragos.pdf>

(C) DÍAZ, A. (2010). Mejora de la competitividad y acceso a mercados por medio del desarrollo y

aplicación de normas de inocuidad y calidad. The Inter-American Institute for Cooperation on

Agriculture (IICA). Available in:

<www.iica.int/Esp/regiones/sur/argentina/Documents/Sanidad/BPA/Presentaciones/Mejora_

competitividad_ADiaz.pdf>

(D) FAO (2007). Agro-industries characterization and appraisal: Asparagus in Peru. Luz Díaz, Food

and Agriculture Organizations of the United Nations (FAO). Available in:

<www.fao.org/ag/ags/publications/docs/AGSF_WorkingDocuments/agsfwd23.pdf>

(E) GALLINO, J. (2009). Canned Asparagus World Industry: Past, Present and Future. XIIth

International Asparagus Symposium – IAS 2009. Available in:

<www.ias2009peru.com/presentations.html>

(F) GERUNDINO, D. & HILB, M (2010). The ISO Methodology. Assessing the benefits of standards.

ISO Focus+, June 2010, pp. 10 – 16.

(G) ISO (2010a). Economic benefits of standards, Implementation Guide. International

Organization for Standardization (ISO).

(H) ISO (2010b). Economic benefits of standards, Methodology Guide (chapters 1-3). International

Organization for Standardization (ISO).

(I) O’BRIEN, T. & DÍAZ, A. (2004). El ejemplo del esparrago peruano. The Inter-American Institute

for Cooperation on Agriculture (IICA).Available in:

<www.iica.int/Esp/regiones/central/honduras/Publicaciones%20IICA/Competitividad%20y%20

Agronegocios/MEJORA,1.PDF>

(J) OSITRAN (2009). La cadena logística del espárrago verde. Journal of Transport Infrastructure

Regulation, 2, (4), 81-115. Available in: <www.ositran.gob.pe/RepositorioAPS/0/0/par/R-N4--

2010-

OSITRAN/regulacion%20en%20la%20infraestructura%20del%20transporte%20ene%202010.p

df>

http://www.agrobanco.com.pe/cultivo_del_esparrago.pdf

http://www.scotiabank.com.pe/i_financiera/pdf/sectorial/20030922_sec_es_esparragos.pdf

http://www.iica.int/Esp/regiones/sur/argentina/Documents/Sanidad/BPA/Presentaciones/Mejora_competitividad_ADiaz.pdf

http://www.iica.int/Esp/regiones/sur/argentina/Documents/Sanidad/BPA/Presentaciones/Mejora_competitividad_ADiaz.pdf

http://www.fao.org/ag/ags/publications/docs/AGSF_WorkingDocuments/agsfwd23.pdf

http://www.ias2009peru.com/presentations.html

http://www.iica.int/Esp/regiones/central/honduras/Publicaciones%20IICA/Competitividad%20y%20Agronegocios/MEJORA,1.PDF

http://www.iica.int/Esp/regiones/central/honduras/Publicaciones%20IICA/Competitividad%20y%20Agronegocios/MEJORA,1.PDF

http://www.ositran.gob.pe/RepositorioAPS/0/0/par/R-N4--2010-OSITRAN/regulacion%20en%20la%20infraestructura%20del%20transporte%20ene%202010.pdf




[43]

(K) SHIMIZU, T. (2009). Structural Changes in Asparagus Production and Exports from Peru.

Institute of Developing Economies (IDE) – Discussion Paper No. 201. Available in:

<www.ide.go.jp/English/Publish/Download/Dp/pdf/201.pdf>

(L) TECHNOSERVE (2005). Visión del Espárrago Peruano. Small and Medium-Sized Exporters -

PYMEX. Available in: <www.pymex.pe/descargas/.../9-esparrago.html?...esparrago-peruano>

(M) VAN OORDT, G. (2004). La Industria del Espárrago - Visión de Futuro. Peruvian Institute of

Asparagus and Vegetables (IPEH) – III Technique Congress of Asparagus. Available in:

<www.ipeh.org/eventos_2006_jul.asp>

WEBSITES

FAO (2010).World Statistics of Asparagus (Production, Yield and Harvested). Statistics Division –

Food and Agriculture Organization of the United Nations (FAO).Available in:

<http://faostat.fao.org/site/567/default.aspx#ancor>

MINAG (2010).Crops of National Importance - Asparagus.Agricultural Division – Ministry of

Agriculture. Available in: <www.minag.gob.pe/esparragos/generalidades-del-producto.html>

SIICEX (2010).Asparagus National Technical Committee of Standardizations.Peruvian Technical

Standards – Integrated Information System for Foreign Trade (SIICEX).Available

in:<www.siicex.gob.pe/siicex/resources/calidad/ntp_esparrago.pdf>

SUNAT (2010).Export-Import of asparagus.National Superintendence of Tax

Administration.Available in: <www.aduanet.gob.pe/aduanas/informae/aepartmen.htm>

TRADEMAP (2010).Data of asparagus trade - International Trade Centre UNCTAD/WTO (ITC) –

Trade Statistics for International Business Development (TradeMap). Available in:

<www.trademap.org>

USDA (2010).U.S. Asparagus Statistics (World Asparagus). Economic Research Service –

USDA.Availablein:<http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentI

D=1771>

http://www.ide.go.jp/English/Publish/Download/Dp/pdf/201.pdf

http://www.pymex.pe/descargas/.../9-esparrago.html?...esparrago-peruano

http://www.ipeh.org/eventos_2006_jul.asp

http://faostat.fao.org/site/567/default.aspx#ancor

http://www.minag.gob.pe/esparragos/generalidades-del-producto.html

http://www.siicex.gob.pe/siicex/resources/calidad/ntp_esparrago.pdf

http://www.aduanet.gob.pe/aduanas/informae/aepartmen.htm

http://www.trademap.org/

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1771

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1771

[44]

ANNEXES

Annex 1: International market

Because of the increase in European demand, the world production of this crop presented an

average annual growth of 6,4% between the years 2000 and 2009.

The world’s largest producer is China with almost 90% of the total production, followed far away

by Peru (4,0%) and Germany (1,3%). In 2008,the countries with higher yield were Iran (14,3 Metric

TonnesMT/ha), Peru (10,6 MT/ha), Philippines (10,1 MT/ha) and Poland (8 MT/ha).

International consumption is led by Europe, highlighting Germany, followed by Asia with Japan,

then North America with the U.S. The world market of asparagus is divided into two main

segments: fresh asparagus (35,0%) and processed asparagus– canned and frozen – (63,0%)54.

At 200955, Peru was the world's leading exporter of fresh asparagus (41,8%), followed by Mexico

(23,4%), the U.S. (9,7%) and Netherlands (4,2%) (see Figure 9). The world's leading exporters of

canned asparagus were: China (48,3%), Peru (39,8%), Netherlands (4,9%) and Spain (2,8%) (see

Figure 11).

In 2008-2009,the main importers of fresh asparagus were: the U.S. (53,0%), followed by Germany

(7,7%), Canada (6,6%), France (5,1%) and Japan (3,7%) (see Figure 8), whilst the major importers of

canned asparagus were: Spain (37,5%), Germany (17,0%), France (12,9%), the U.S. (10,0%) and

Netherlands (3,8%) (see Figure 10).

About the world distribution of the asparagus consumption, fresh asparagus green is mainly

consumed in the U.S., while Europe demands canned white asparagus.

In addition, since the 1990s the trade of fresh asparagus has been growing continuously, while

canned asparagus, has presented a certain level of stagnated in his tradesince the 2000s.

54

Nearly 2% of the world production is explained by wastage. 55

The percentages presented in the text are quantities terms of trade.

[45]

Figure 8

WORLD’S LARGEST IMPORTERS OF FRESH OR CHILLED ASPARAGUS, 2008 - 2009

(Thousand MT)

Source: International Trade Centre UNCTAD/WTO (ITC) – TradeMap, 2010

Figure 9

WORLD’S LARGEST EXPORTERS OF FRESH OR CHILLED ASPARAGUS, 2008 - 2009

(Thousand MT)


35,8

6,8

9,6

9,9

10,9

10,0

10,4

15,3

19,7

27,0

84,6

26,8

5,7

8,9

9,3

9,8

10,2

10,8

14,9

19,6

22,6

156,0

050100150200

2009 2008

3rd Supplier2nd Supplier1st Supplier

Canada: 0,9%

Spain: 15,7%

USA: 16,2%

Peru: 7,6%

Thailand: 16,4%

Netherlands: 1,3%

Germany: 3,0%

Peru: 13,5%

Peru: 0,7%

Mexico: 43,1%

Peru: 17,5%

Mexico: 37,5%

Germany: 11,0%

Australia: 21,3%

Morocco: 16,4%

Mexico: 3,3%

France: 13,8%

Australia: 0,9%

Peru: 55,5%

Greece: 43,9%

Peru: 45,8%

Spain: 59,8%

Mexico: 33,1%

Peru: 78,5%

Peru: 82,2%

USA: 20,5%

Thailand: 34,9%

Major's Suppliers, 2009 (Share in %)

World imports , 2009: 294,7 Thousand MT

USA

Germany

Canada

France

Japan

Spain

United Kingdom

Switzerland

ChineseTaipei

Netherlands

Rest

Thailand: 2,8%Mexico: 11,9%Peru: 73,4%

3rd Customer2nd Customer1st Customer

Spain: 6,5%

Italy: 0,2%

Switzerland: 4,7%

Italy: 9,7%

Norway: 10,7%

Switzerland: 3,7%

Australia: 2,4%

Netherlands: 10,9%

Japan: 0,3%

Japan: 18,1%

Germany: 30,1%

Belgium: 14,6%

France: 5,1%

Japan: 21,4%

USA: 71,8%

USA: 99,1%

Canada: 66,9%

France: 44,6%

Germany: 48,2%

Germany: 81,5%

Chinese T.: 73,0%

Major's Customers, 2009 (Share in %)

Peru

Mexico

USA

Spain

Netherlands

Greece

Thailand

Austria: 17,4%Germany: 21,3%Slovakia: 36,0% Hungary

17,8

3,3

3,3

3,1

13,3

14,7

12,0

13,7

23,3

63,5

109,8

16,5

2,8

3,8

3,8

9,5

11,0

12,3

13,4

28,3

68,4

122,1

050100150

2009 2008


Spain: 6,5%

Italy: 0,2%

Switzerland: 4,7%

Italy: 9,7%

Norway: 10,7%

Switzerland: 3,7%

Australia: 2,4%

Germany: 10,6%

Hong Kong: 2,9%

Netherlands: 10,9%

Japan: 0,3%

Japan: 18,1%

Germany: 30,1%

Belgium: 14,6%

France: 5,1%

Japan: 21,4%

Italy: 20,8%

Singapore: 5,7%

USA: 71,8%

USA: 99,1%

Canada: 66,9%

France: 44,6%

Germany: 48,2%

Germany: 81,5%

Chinese T.: 73,0%

Switzerland: 49,5%

Japan: 87,6%


World exports, 2009: 291,9 Thousand MT

Peru

Mexico

USA

Spain

Netherlands

Greece

France

Australia

Thailand

Rest

Austria: 17,4%Germany: 21,3%Slovakia: 36,0% Hungary

[46]

Figure 10

WORLD’S LARGEST IMPORTERS OF PREPARED OR PRESERVED (NOT FROZEN) ASPARAGUS, 2008 –

2009 (Thousand MT)


Figure 11

WORLD’S LARGEST EXPORTERS OF PREPARED OR PRESERVED (NOT FROZEN) ASPARAGUS, 2008 -

2009 (Thousand MT)


17,1

1,4

1,3

3,5

3,1

5,7

6,3

18,5

25,4

27,6

58,1

13,5

1,2

1,4

2,8

3,1

4,4

5,4

14,3

18,3

24,2

53,2

020406080

2009 2008

3rd Supplier2nd Supplier1st Supplier

Germany: 1,8%

Netherlands: 11,7%

Spain: 5,3%

New Zealand: 0,4%

Peru: 10,8%

Germany: 6,5%

New Zealand: 4,1%

China: 3,8%

Spain: 0,7%

Peru: 46,0%

Peru: 14,7%

Peru: 38,9%

China: 3,5%

Germany: 13,4%

Peru: 36,0%

Peru: 46,8%

Germany: 4,9%

Peru: 5,8%

China: 51,4%

China: 71,4%

China: 49,8%

Peru: 95,9%

China: 74,5%

China: 57,1%

China: 48,7%

Spain: 88,3%

China: 93,5%

Major's Suppliers, 2009 (Share in %)

World imports , 2009: 141,9 Thousand MT

Spain

Germany

France

USA

Netherlands

Denmark

Portugal

Australia

Rest

France: 11,2%Belgium: 18,8%China: 47,0%


Spain: 6,5%

Italy: 0,2%

Switzerland: 4,7%

Italy: 9,7%

Norway: 10,7%

Switzerland: 3,7%

Australia: 2,4%

Netherlands: 10,9%

Japan: 0,3%

Japan: 18,1%

Germany: 30,1%

Belgium: 14,6%

France: 5,1%

Japan: 21,4%

USA: 71,8%

USA: 99,1%

Canada: 66,9%

France: 44,6%

Germany: 48,2%

Germany: 81,5%

Chinese T.: 73,0%


Peru

Mexico

USA

Spain

Netherlands

Greece

Thailand

Austria: 17,4%Germany: 21,3%Slovakia: 36,0%

Japan

Belgium

Hungary

0,8

0,0

0,2

0,3

1,8

0,8

6,3

4,5

2,9

66,0

76,2

0,5

0,2

0,4

0,4

0,4

0,8

3,2

3,9

6,7

54,7

66,5

020406080100

2009 2008


Netherlands: 16,4%

France: 12,7%

Belgium: 11,8%

Portugal: 9,7%

Belgium: 12,2%

Belgium: 15,7%

Luxembourg: 15,6%

Germany: 0,6%

Germany: 18,1%

USA: 22,6%

France: 30,8%

Belgium: 16,0%

Netherlands: 13,7%

United Kingdom: 18,0%

Netherlands: 22,3%

Hungary: 0,9%

Indonesia: 5,5%

Spain: 37,2%

Spain: 45,2%

Germany: 45,8%

France: 58,1%

France: 38,3%

Spain: 41,4%

France: 59,4%

Austria: 98,3%

Singapore: 94,5%


World exports, 2009: 137,7 Thousand MT

China

Peru

Netherlands

Spain

Germany

France

Slovenia

Malaysia

Belgium

Rest

Canada: 18,2%Iceland: 22,4%Switzerland: 24,7% USA

[47]

Annex 2: National standards in fresh asparagus

Year Code Name Summary

1991 NTP 011.116 ASPARAGUS: Guide to

refrigerated transport

Describes the optimal requirements for

refrigerated transport for long distance of

the asparagus spears “Asparagus officinalis

Linnaeus”, intended for direct consumption

or industrial processing

1999 NTP-ISO

2859.10

Sampling procedures for

inspection by attributes

Part 10: Introduction to the ISO 2859 series

of standards for sampling for inspection by

attributes

2001 NTP 209.401

ASPARAGUS: Hygiene

practices for fresh

asparagus handling

To set the application of hygiene practices in

the handling (including cultivation and

harvesting, washing, cutting, classification,

packing, cooling, storage, transport,

distribution and sales) of fresh asparagus for

human consumption in order to guarantee a

safe and healthy product. In short, the

standard is about the processing of

asparagus for sale as fresh product

2003 NTP 209.402 ASPARAGUS: Good

agricultural practices

To establish the good agricultural practices in

the asparagus production with the aim to

ensure a safe and healthy, free of

contaminants that could harm consumer’s

health and medical problems by the

presence and/or damage caused by pests.

Good agricultural practices combine a

number of technologies and techniques that

emphasize integrated pest management,

conservation of natural resources and

environment, and minimizing risks to human

health

2007 NTP ISO

9000:2007

Quality management

systems

To establish requirements for a system of

quality management, where an organization

needs to demonstrate its ability to

consistently provide product that meets

customer and applicable statutory and

regulatory

2008 NTP 011.109 ASPARAGUS: Fresh

asparagus requirements

To set minimums requirements, tolerances,

presentation, classification per calibre,

[48]

Year Code Name Summary

marking and labelling, contaminants and

hygiene to be met for fresh asparagus

marketing

Source: Asparagus National Technical Committee of Standardization (ANTCS) – INDECOPI/Peruvian

Technical Standards

Annex 3: Main certifications in fresh asparagus

Certification Description

Albert Heijn protocol

To control the residue levels at the source of the farm sites and the packing

house of the suppliers. The protocol is based on Risk Analysis study and

defines specific control measures and number of samples according the

identified risks

BASC

The Business Anti-Smuggling Coalition (BASC) is a business-led alliance,

supported by the U.S. Customs Service, created to combat narcotics

smuggling via commercial trade. BASC is a voluntary program where

corporate participants set self-imposed business standards to eliminate the

use of legitimate business shipments by narcotics traffickers to smuggle

illicit drugs

BRC Global

The British Retail Consortium (BRC) Global Standards are requirements to

be met by an organisation to enable the production, packaging, storage

and distribution of safe food and consumer products

GAP

Good Agricultural Practices (GAP) are "practices that address

environmental, economic and social sustainability for on-farm processes,

and result in safe and quality food and non-food agricultural products"

(FAO)

GLOBALGAP

The GLOBALG.A.P standard is primarily designed to reassure consumers

about how food is produced on the farm by minimising detrimental

environmental impacts of farming operations, reducing the use of chemical

inputs and ensuring a responsible approach to worker health and safety as

well as animal welfare

GMP

Good manufacturing practice (GMP) is part of a quality system covering the

manufacture and testing of active pharmaceutical ingredients, diagnostics,

foods, pharmaceutical products, and medical devices. GMPs are guidelines

that outline the aspects of production and testing that can impact the

quality of a product

HACCP

The Hazard Analysis Critical Control Point (HACCP) system is “applied for

food safety management and uses the approach of controlling critical

points in food handling to prevent food safety problems. It is a system for

[49]


identifying specific hazards and preventive measures for their control”

(FAO)

ISO 9000 ISO 9000 describes fundamentals of quality management systems, which

form the subject of the ISO 9000 family, and defines related terms

ISO 14001

The ISO 14000 environmental management standards exist to help

organizations (a) minimize how their operations (processes, etc.)

negatively affect the environment (i.e. cause adverse changes to air, water,

or land); (b) comply with applicable laws, regulations, and other

environmentally oriented requirements, and (c) continually improve in the

above

ISO 22000

ISO 22000 specifies requirements for a food safety management system

where an organization in the food chain needs to demonstrate its ability to

control food safety hazards in order to ensure that food is safe at the time

of human consumption

OHSAS 18001

OHSAS 18001 is an Occupation Health and Safety Assessment Series for

health and safety management systems. It is intended to help an

organization to control occupational health and safety risks. It was

developed in response to widespread demand for a recognized standard

against which to be certified and assessed

SA8000

Social Accountability 8000 (SA8000) has been developed by Social

Accountability International (SAI). SA8000 is promoted as a voluntary,

universal standard for companies interested in auditing and certifying

labour practices in their facilities and those of their suppliers and vendors.

It is designed for independent third party certification

SQF

The SQF (Safe Quality Food) Program is a leading, global food safety and

quality certification program and management system designed to meet

the needs of buyers and suppliers worldwide. It provides independent

certification that a supplier's food safety and quality management system

complies with international and domestic food safety regulations. The

“SQF 1000” Code for primary producers and growers and the “SQF 2000”

Code for the manufacturing, processing and distribution sectors

TESCO Natures

Choice

Tesco Nature’s Choice is a standard, which all fresh produce growers

around the world must achieve in order to supply fresh fruit, vegetables or

salads. The standard was developed to ensure that top quality fresh

produce comes from growers who use good agricultural practices, operate

in an environmentally responsible way and with proper regard for the

health and well being of their staff

Source: Control Union World Group, FAO, US Embassy (Costa Rica), Mallenbaker, Global GAP, BRC,

TESCO, SQF, ISO, OHSAS 18001, Wikipedia

[50]

[51]

Annex 4: Main regulations in fresh asparagus


21 CFR 110 (US) Current good manufacturing practice in manufacturing, packing or holding

Human Food

CAC / Vol. III Second

Edition 1993 (Codex

alimentarius)

Maximum Residue Limits (MRLs) for Pesticides

DGAC (Peru) Institution responsible for the harmonization of aeronautical regulations in

Latin America

Directive

79/117/EEC

To prohibit the placing on the market and use of plant protection products

containing certain active substances

Directive 98/8/EC Concerning the placing of biocidal products on the market

Directive

2000/29/EC

On protective measures against the introduction into the European

Community of organisms harmful to plants or plant products and against

their spread within the Community

Regulation (EC) No

2377/1999 Laying down the marketing standard for asparagus

Regulation (EC) No

466/2001 To set maximum levels for certain contaminants in foodstuffs

Regulation

396/2005/ EEC

On maximum residue levels of pesticides in or on food and feed of plant

and animal origin

Regulation (EC) No

2073/2005 On microbiological criteria for foodstuffs

Regulation (EC) No

1881/2006 To set maximum levels for certain contaminants in foodstuffs

Regulation (EU) Nº

765/2010

To set maximum residue levels for chlorothalonilclothianidin,

difenoconazole, fenhexamid, flubendiamide, nicotine, spirotetramat,

thiacloprid and thiamethoxam in or on certain products

The Control of

Pesticides

Regulation (COPR)

1986 (United

Kingdom)

Under COPR all pesticides must gain approval before their advertisement,

sale, supply, storage or use is permitted in Great Britain. Anyone who

advertises, sells, supplies, stores or uses a pesticide is affected by the

Regulations, including people who use them in their own home

The Food &

Environment

Protection Act 1985

(United Kingdom)

An Act to authorise the making in an emergency of orders specifying

activities which are to be prohibited as a precaution against the

consumption of food rendered unsuitable for human consumption in

consequence of an escape of substances

The Food Safety Act

1990 (United

It is an Act of United Kingdom ‘sParliament . It regulates the statutory to

treat food intended for human consumption in a controlled and managed

[52]


Kingdom) way. The key requirements of the Act are that food must comply with food

safety requirements, must be "of the nature, substance and quality

demanded", and must be correctly described (labelled)

The Japan Food

Chemical Research

Foundation

Positive list system for agricultural chemical residues in foods

UK Statutory MRLs

Maximum Residue limits (MRLs) are defined as the maximum

concentration of pesticide residue (expressed as milligrams of residue per

kilogram of food/animal feeding stuff) likely to occur in or on food and

feeding stuffs after the use of pesticides according to Good Agricultural

Practice (GAP), i.e. when the pesticide has been applied in line with the

product label recommendations and in keeping with local environmental

and other conditions). MRLs are primarily trading standards, but they also

help ensure that residue levels do not pose unacceptable risks for

consumers

Source: DanPer Trujillo, Codex Alimentarius, the Japan Food Chemical Research Foundation,

Pesticide Residues Committee (UK), Official Journal of the European Communities, Health and

Safety Executive (UK), Wikipedia

Annex 5: Peru’s asparagus industry

In the last 10 years, production grew at an annual rate similarly to the global market (7,5% per

year) boosted by the increase in the number of hectares cultivated and yields per hectare56. This

grew was explained by the technological improvement applied to the crop that enhanced the

increase of productivity.

The main advantage of Peru is his ideal soil and climatic conditions for asparagus production

(mainly in the valleys of the Coast) which allows a steady supply all year round with one of the

highest yields worldwide.

However, there are certain limitations that could cause a decrease in the competitiveness of the

crop if not solved, especially for medium and small enterprise. Among the most important, it can

be mentioned the scarcity of water resources and soil quality, the limited technical and

management assistance, limited access to financing and high investment and production costs.

56

In 2006, the asparagus production represented 21,8% of total non-traditional agricultural exports, 1,7% of gross value of agricultural production and 1,5% annual employment and generated 2,5 million wages (Ministry of Agriculture - MINAG).

[53]

Production

Asparagus production all year round57 has allowed Peru becomes the second largest producer in

the world, exceeded only by China58. In Peru, three varieties of asparagus are produced: green,

white and purple. The first is marketed fresh, unlike the other two, which are traded processed

(canned, frozen, dried, pickled, etc.).

Domestic production of asparagus is centralized on the coast, especially in the regions of Ica and

La Libertad (see Figure 12). In La Libertad, due to the stable temperature throughout the year,

harvest is obtained twice a year59;60 whilst in Ica is three times per year with the main harvest from

September to December. Because of wider seasonal difference, asparagus cultivation is more

seasonal in the south than in the north.

The main harvest season occurs from August/September to December/January, period in which

Peru take advantage of the off-season time in the U.S.61 and Europe62 for export fresh asparagus

and processed asparagus to those destinations, respectively.

In La Libertad Region, white variety is mainly produced, processed and packed for export to

European markets. In Ica Region, green variety is produced and exported fresh, mainly to the U.S.

In recent years, the production of green asparagus has increased enormously and his level is

almost similarly to white asparagus now. Small and medium-scale asparagus producers have

switched their production from white to green asparagus due to the growing demand for green

asparagus for export.

Respect to the distribution of land, 60% of producers has agricultural units of over 5 hectares and

only 1,5% maintained units smaller than one hectare.

57

Peru also has one of the highest worldwide asparagus yield. In 2009, the cultivated area was 29,5thousand hectares with an average yield of 10,6 tons per hectare. 58

China focuses most of its production to supply domestic demand. 59

From January to April, high productivity is presented with low crop quality (the discard number of asparagus tends to increase within this season). From May to September, productivity is less and crop quality is higher. The best season for harvest is from October to December in La Libertad 60

The sandy loam of the region is suited for the production of white asparagus. 61

Period in which there is not sufficient supply of fresh asparagus, because neither U.S. nor Mexico have enough production to supply the U.S. market. 62

European countries do not produce in the second half of the year.

[54]

Figure 12

GEOGRAPHICAL DISTRIBUTION OF CULTIVATED LAND DEVOTED TO ASPARAGUS – 2004

(18 400 has; 190,1 thousand MT)

Source: Technoserve - 2005, Food and Agriculture Organization of the United Nations (FAO) - 2009

Exports

The Peruvian asparagus production is basically (99%) for export where fresh and canned (including

bottle) asparagus are the main types of products shipped (frozen is also shipped but in small

quantity).

Since 1997, asparagus exports have grown at an average annual rate of nearly 20%63 due to high

international prices and increased in the international consumption level.

Peru shipped fresh asparagus64 in large quantities to the U.S., Netherlands, Spain, United Kingdom

and Japan (see Table 12), while processed asparagus have been shipped to Spain, the U.S., France,

Germany and Denmark (see Table 13).

63

The export value has passed from 37 million USD in 1997 to 236 million USD in 2007

[55]

Table 12

EXPORTS OF FRESH OR CHILLED ASPARAGUS BY MAJOR EXPORTERS AND DESTINATION

COUNTRIES, 2009 - 2010

(Thousand MT)

Source: National Superintendence of Tax Administration (SUNAT)

Table 13

EXPORTS OF PREPARED OR PRESERVED (NOT FROZEN) ASPARAGUS BY MAJOR EXPORTERS AND

DESTINATION COUNTRIES, 2009 - 2010

(Thousand MT)

Source: National Superintendence of Tax Administration (SUNAT)

64

Peru ranks first in exporting fresh asparagus (mainly green) and second in exporting processed asparagus.

2009 2010 2009 2010

Complejo Agroindustrial Beta 11,0 13,8 25,1% 11,2% USA 87,7 84,9 -3,2% 69,3%

J&P Agroexportaciones 5,3 7,3 39,0% 6,0% Netherlands 13,4 13,2 -1,1% 10,8%

Sociedad Agrícola Drokasa 6,4 6,5 0,5% 5,3% Spain 8,0 9,0 13,3% 7,3%

Camposol 7,0 6,3 -10,8% 5,1% United Kingdom 6,1 6,3 3,9% 5,2%

DanPer Trujillo 6,8 6,2 -9,0% 5,1% Japan 0,9 1,5 74,9% 1,2%

Santa Sofía del Sur 5,7 5,7 0,1% 4,7% Australia 1,2 1,3 5,3% 1,0%

Peak Quality del Perú 4,7 5,7 21,3% 4,6% France 0,7 0,8 10,1% 0,6%

Agro Paracas 5,1 5,3 3,8% 4,3% Others 4,3 5,6 28,7% 4,5%

Agrícola Chapi 5,2 4,1 -21,2% 3,3% Total 122,2 122,6 0,3% 100,0%

Agroinper 3,6 3,7 2,5% 3,0%

Agricola La Venta 1,5 3,6 139,5% 2,9%

Others 59,9 54,5 -9,0% 44,5%

Total 122,2 122,6 0,3% 100,0%

Var. % Share in %Annual

Exporters Var. % Share in % CountriesAnnual

2009 2010 2009 2010

Camposol 20,7 15,7 -24,5% 30,8% Spain 24,8 18,5 -25,4% 36,4%

Sociedad Agrícola Viru 13,8 12,4 -9,9% 24,5% USA 12,4 10,5 -15,1% 20,7%

DanPer Trujillo 6,5 8,6 31,3% 16,8% France 7,0 9,3 32,9% 18,3%

TalSA 2,9 4,6 55,6% 9,0% Germany 3,1 4,4 44,2% 8,7%

Green Perú 3,3 3,4 0,9% 6,6% Denmark 1,4 1,9 37,6% 3,8%

Agroindustrias AIB 1,9 1,9 3,2% 3,8% Australia 1,4 1,4 5,4% 2,8%

Agroindustrias Josymar 1,1 1,1 -2,6% 2,1% Netherlands 1,4 1,0 -29,9% 1,9%

Agro Industria San Antonio 0,3 0,5 78,3% 1,0% Others 3,4 3,7 11,4% 7,4%

Sociedad Agropecuaria San Gabriel 0,6 0,4 -24,0% 0,9% Total 54,7 50,8 -7,2% 100,0%

Export Valle Verde 0,1 0,4 437,1% 0,8%

Procesadora Perú 0,4 0,4 6,9% 0,8%

Others 3,1 1,4 -53,8% 2,8%

Total 54,7 50,8 -7,2% 100,0%

ExportersAnnual

Var. % Share in % CountriesAnnual

Var. % Share in %

[56]

Annex 6: Functions and associated activities of DanPer Trujillo

Functions Activities

Execution processes

Sales Responsible for promoting products that are placed in different markets based on customer

requirements and expectations

Production planning Responsible for defining the volume and the time of manufacture of products to meet the

requirements and customer expectations

Fields and farms Responsible for providing the necessary raw materials to meet schedule

Hoard Manages the proper post-harvest treatment, ranging from the picking of raw materials to

the reception on the ground

Production Process responsible for packing the products according to contracts with the customer

based on customer requirements

Warehouse and finish

product Responsible for storing the product, labelled and packed for shipment

Logistics Responsible for managing procurement and contracting of third-party services required for

processing and shipping of products

Support process

Administration

department Responsible of administration and economics control of resources of the organization

Human resources Responsible for recruitment, selection, training, staff appraisal and staff development

Maintenance

department

Responsible for maintaining and improving the operation of machinery, critical equipment,

as well as providing an adequate supply of energy resources: water and electricity, the best

possible cost

Quality assurance Responsible for ensuring production quality and safe products and consistent quality to

maintain and increase profitability and market share

Warehouse of supply and

packing Responsible for maintaining and controlling the minimum safety stock of inputs

Statistic control of

process

Responsible for promoting, implementing and monitoring management tools, indicators,

statistical process control, cost control and budgets

R&D Responsible for the design and development of new products and research of process

deviations

Accounting department Responsible for managing and monitoring accounting business financial indicators

Finance department Responsible financial management requires the company to meet its objectives

General service and

sanitation Services responsible for production support and sanitation and hygiene plant

Systems (IT)

Responsible for developing support tools for the execution of operational tasks and

information management to improve the efficiency of the areas. It also provides

maintenance and operation of hardware and software company

Occupational Safety and

Health

Responsible for managing and promoting a culture of occupational safety and health

working maintaining optimal conditions to prevent the occurrence of events that endanger

the integrity and health of employees

Control and security To manage and promote a safety culture to prevent the smuggling of goods, narcotics,

terrorism, bioterrorism and sabotage through the production and marketing of products


[57]

Annex 7: Functions and associated activities of FríoAéreo


Execution process

Quality control

- Temperature monitoring of products that into and out of FríoAéreo

- Categorization of fresh green asparagus

- Monitoring the temperatures of the cameras

- Follow up temperature until the load gets on the plane

- Monitoring of cleaning, microbiological and sanitation process

- Preparing reports for submission to clients

Handling, palletizing and

cooling of perishable

- Front loading (weighing, counting and recording package dimensions)

- Storage in a refrigerated environment

- Armed (palletizing) as requested by each airline

- Support for multiple service requests

Security management

- Inspection with specialized anti-drug dogs at the reception

- Inspection with X-ray machine

- Constant monitoring of the atmosphere with a CCTV, 24h – the whole year

- Maintain the organization within the BASC guidelines

Information

- Registration data (temperature, ph codes, weight, dimensions, etc.) during reception

- Registration data (temperature, weight, etc) during exit

- Record of incidents with the product received and reports submissions to clients

Support processes

Management of staff

- Contract management

- To keep up the payment of salaries

- To keep up the payment of social benefits

- Manage personal loans

- Recruit and select personnel

- Propose and manage training plans and their implementation to ensure that staff have the

skills necessary to perform its function

- Manage the performance appraisal system to identify gaps between actual and expected

performance

Maintenance of plant

and equipment

- Preventive and corrective maintenance of facilities

- Constant monitoring of parameters and control panels and electrical systems

- Constant monitoring of refrigeration equipment and systems

Sanitation -Pest, desratization and spraying of all facilities.

Buying office

- Negotiate, quote and evaluate suppliers

- Follow up on local purchases and imports

- Creation and placement of purchase order

- Receipt and entry of goods to the Kardex (Flex)

- Inventory Management

Legal staff

- Legal advice and guidance in all those preventive actions that have legal connotations

- Legal advice and guidance on labour issues

- Assistance in the drafting of minutes generated from general meetings of members and

committees

- Advice on the conclusion of contracts with third parties

- Collection of management debts to the institution by judicial or extrajudicial means

- Drafting legal reports on consultations on specific topics required by the Administration

[58]


Strategic processes

Strategic management &

commercial

- Develop and disseminate Policy of Quality and Safety of FríoAéreo

- Represent the organization

- Develop strategies to improve the competitiveness of agricultural exports

- Conduct strategic planning

- Observe and enforce rules and procedures of the organization

- Evaluate the performance of the Management of Quality

- Ensure that customer expectations are identified and overcome

- Ensure a fluent operational attention to exporters, airlines and charge agents

- Provide the necessary resources to implement management activities to ensure quality

and compliance of the service

- Ensuring that customer needs and expectations should being determined and become

requirements tomet later on, establish mechanisms to determine the degree of customer

satisfaction

- Communicating to the organization the importance of meeting customer requirements,

ISO 9001:2008, statutory and regulatory requirements associated with the service and the

responsibilities for the System of Quality Management

- Appoint the Management Representative (Representative Director)

Administration & finance

- Ensure compliance with procedures and rules of the organization

- Represent the organization at the administrative level

- Perform the planning of the administrative area

- Direct and supervise the management team of FríoAéreo towards the achievement of the

objectives of the institution

- Report to senior management the progress of the office areas: Accounting, Credit and

Collections, Treasury, Billing and Human Resources

- Coordinate changes at general level that occurring in the company.

- Preparation of annual budget of the area

- Make the budget as a central control systems of development and control of the company

- Adoption of administrative resources to the establish limits

Project management

- Represent the organization in front of the exporters, agencies, unions and state and

private entities.

- Support for the dissemination of Quality Policy of FríoAéreo

- Ensure and monitor the proper implementation and development of Quality Management

System

- Identify, secure and monitor the implementation of other management systems required

by the organization.

- Define the responsibilities and activities to develop by the personnel in charge

- Gather information on exports of the industry and provide information on industry

projections for exporters fresh asparagus

- Gather information and requirements for exporters to develop new services and

development of information useful to the industry

- Develop services projects and the needs expressed by the exporters and assigned by the

Board of Directors of FríoAéreo

- Report to senior management the progress of the office areas: Quality Management and

Projects

- Incorporate to the Association, new exporters who meet the requirements for

membership

- Coordinate and participate in other activities outside of their specific tasks already

assigned

[59]


Management system

- Maintenance Management System and Environmental Quality

- To keep informed the General Manager informed on progress in implementing the

Environmental Management System

- Develop and disseminate relevant materials management systems

- Monitoring compliance with the Program Management

- Control documents management system

- Coordination of the implementation of internal and external audits

- Support and coordination of awareness activities related to management systems

- Preparation of reports relating to the performance management system

- Promote continuous improvement activities inherent Management Systems

- Assist in the identification of aspects and environmental impact assessment

- Monitor the implementation of the action taken to control the significant environmental

aspects

- Coordinate or assist in conducting the drills required by the nature of actual or potential

emergencies identified in plants of FríoAéreo

- Coordinate the implementation of environmental monitoring and other necessary

Source: FríoAéreo

Annex 8: Structure of the standards impact map of DanPer Trujillo

Functions Standards


Management &

administration

ISO 9001

ISO 14001

OHSAS 18001

SA 8000

GLOBALGAP

USGAP

HACCP

BASC

ETI

Canadian Environmental

Protection Act 1999


Engineering 21 CFR 110

NTP 209.401: 2001

ISO 9001

ISO 14001

OHSAS 18001

SA 8000

GLOBALGAP

USGAP

HACCP

BASC

ETI


Protection Act 1999


I&D 21 CFR 110

NTP 209.401

NTP 209.402

ISO 9001

ISO14001

OHSAS 18001

GLOBALGAP

USGAP

HACCP

BASC

[60]

Functions Standards



Protection Act 1999


Procurement 21 CFR 110

ISO9001

ISO14001

OHSAS 18001

SA 8000

GLOBALGAP

USGAP

HACCP

BASC

ETI


Protection Act 1999


Inbound logistics

21 CFR 110

Regulation (EC) No

466/2001

Regulation (EC) No

1881/2006

Directive 79/117/EEC

The Control of Pesticides

Regulation 1986


Edition 1993

NTP 209.401: 2001

NTP 209.402

ISO9001

ISO 14001

OHSAS 18001

SA 8000

ETI

GLOBALGAP

USGAP

HACCP

BASC


Protection Act 1999

The Food & Environment

Protection Act 1985



NTP 011.109: 2008

The Japan Food Chemical

Research Foundation

Regulation (EC) No

2073/2005

The Control of Pesticides

Regulation 1986


Edition 1993

UK Statutory MRLs

Regulation EU Nº

765/2010

Biocidal Product Directive

98/8/EC

Regulation 396/2005/ EEC

Directive 2000/29/EC

NTP 209.401:

NTP 209.402

Resolution Nº 4657/2006

(MINAGRI CHILE)

ISO9001

ISO 14001

21 CFR 110

OHSAS 18001

SA 8000

NTP ISO 2859

GLOBALGAP

USGAP

HACCP

BASC


Protection Act 1999

The Food & Environment

Protection Act 1985

ETI


Albert Heijn Protocol

Outbound logistics

NTP 011.116: 1991

Resolution Nº 4657/2006

Regulation (EC) No

2377/1999

ISO 9001

GLOBALGAP

USGAP

HACCP

BASC

[61]

Functions Standards


ISO 14001

OHSAS 18001


Protection Act 1999


Marketing & sales NTP 011.109: 2008

NTP 209.401: 2001

Regulation (EC) No

2377/1999

ISO9001

ISO14001

OHSAS 18001

GLOBALGAP

HACCP

BASC


Protection Act 1999


Post-service

21 CFR 110

Biocidal Product Directive

98/8/EC

NTP 209.401: 2001

ISO9001

ISO14001

OHSAS 18001

SA 8000

GLOBALGAP

USGAP

HACCP

BASC

ETI


Protection Act 1999



[62]

Annex 9: Structure of the standards impact map of FríoAéreo

Functions Standards


Management &

administration

ISO 9001: 2008

NTP ISO 9000:2007

ISO 14001:2004

ISO 14004:2004

Procurement BASC BASC BASC


NTP 011.109:2008

NTP-ISO 2859-1 1999

ISO 9001: 2008

NTP ISO 9000:2007

ISO 14001:2004

ISO 14004:2004

BASC

DGAC

GS1: Global Traceability

Conformance

ISO 9001: 2008

NTP-ISO 2859-1 1999

NTP ISO 9000:2007

ISO 14001:2004

ISO 14004:2004

BASC

DGAC

Post-service NTP 011.109:2008

NTP-ISO 2859-1 1999

NTP 011.109:2008

NTP-ISO 2859-1 1999

BASC

DGAC

Source: FríoAéreo

Annex 10: The impact map of standards of DanPer Trujillo


Inbound logistics

All activities

Better internal information

transfer

Using standardized documents and

specifications makes passing on internal

information about products more efficient

Better training of personnel

Inbound Logistics staff can be trained better

because relevant specifications for products is

standardized

More efficient logistics

Inbound Logistics can be conducted more

efficiently due to the reduced number of types

of supplies

In-house logistics More efficient dispatching of

supplies

Standardized documentation, packaging, labels

or tags of supplies makes dispatching more

efficient

Planning Better planning of production

and times

Using standardized systems to forecast

production and times to fulfil requirements of

customers

Production /

Operations All activities


transfer



information about products and services more

efficient

Better training of personnel Production/Operations staff can be trained

[63]


better because relevant specifications are

standardized, for both products and services

More efficient processing

Due to the reduced number of types of non-

standardized products, Production/ Operations

can become more efficient

Better quality of equipment and

supplies

Higher quality of equipment and supplies based

on standards reduces the failure rate and

related correction costs

Quality assurance Better quality management Quality management based on standards can

be implemented more effectively

Processing Better quality of equipment and

supplies





environment)

Reduced disadvantages from

regulations

Influence in standard-setting process helps to

reduce disadvantages from regulations

Better


compliance



Outbound

logistics

All activities


transfer




efficient


Outbound logistics staff can be trained better

because relevant specifications for both

products and services are standardized


Reducing the number of product types means

that Outbound Logistics can be conducted

more efficiently

Packing/shipping More efficient packing and

shipping

Standardized documentation, packaging and

labels make packing and shipping goods more

efficient

Marketing and

sales

All activities


transfer




efficient


Marketing & Sales staff can be trained better



More efficient marketing

activities

Marketing & Sales activities can be conducted

more efficiently if there are fewer product

types

Market analysis,

research Better competitor information

Since competitor's products have standardized

specifications, market research can be

conducted more efficiently

Marketing activities,

client development Better customer information

Communicating product and service

specifications and requirements to potential

customers is more effective when referring to

standards

[64]


Contracting More efficient contractual

agreements

Defined specifications of the company’s

products and customer requirements make

concluding contractual agreements easier

Sales

Higher sales Sales are higher due to customer confidence in

standardized products and services

Increased competition

The market share is lower due to more

competitors on a market for standardized

products and services

Reduced time-to-market

For products and services based on

standardized components, the time-to-market

and market share are higher due to earlier

access to technical information

Benefits from participating in

standard-setting process

A larger market share can be achieved through

the promotion of the own technology to

become standard and the acquisition of

customers

Procurement

All activities


transfer




efficient


You can train Procurement staff better if you

have standardized specifications of products

and services

More efficient procurement

activities

Fewer types of non-standardized products

make Procurement activities more efficient

Screening and selection

of suppliers

More efficient screening of

specifications of standardized

products

Due to the standardized specifications of the

suppliers' products and the internal

requirements, it is easier to collect relevant

information

Negotiating and

contracting

More efficient contractual

agreements

Defined specifications of suppliers’ products

make concluding agreements easier

More competition More competition in the market drives

down the costs of supplies.

Larger quantities

Costs of supplies are lower because larger

quantities of the same type can be

purchased for standardized components

Source: DanPer Trujillo, ISO Methodology

Annex 11: The impact map of standards of FríoAéreo


Production /

Operations All activities


transfer




efficient

Better training of personnel Production/Operations staff can be trained

[65]


better because relevant specifications are

standardized, for both products and services

More efficient processing

Due to the reduced number of types of non-

standardized products, Production/ Operations

can become more efficient

Better quality of equipment and

supplies




Quality assurance Better quality management Quality management based on standards can

be implemented more effectively

Environmental


Better environmental

management

Environmental management based on

standards can be implemented more

effectively in order to maintain a right measure

of temperature and humidity


environment)

Reduced disadvantages from

regulations

Influence in standard-setting process helps to

reduce disadvantages from regulations

Better


compliance



Outbound

logistics

All activities


transfer




efficient


Outbound logistics staff can be trained better




Reducing the number of product types means

that Outbound Logistics can be conducted

more efficiently

Palletizing More efficient palletizing process Standardized documentation and palletizing

make shipping goods more efficient

Service Customer care and

technical support


transfer




efficient

Better customer communication

You can communicate information about

products and services to customers more

effectively by using standardized specifications


You can train Service staff better if you have

standardized specifications of products and

services

More efficient customer care Fewer types of non-standardized products

make Service activities more efficient

Reduced consultation needs Improved quality of standardized products

means less consultation required

Source: FríoAéreo, ISO Methodology