By the hand of Marianela Ubilla Mendoza.
By Alberto Coral for People & Business
The Association of Banana Exporters of Ecuador, AEBE, is an organization that was created in 1999 by a group of banana-producing businessmen that currently represents more than 70% of exports, participating competitively and sustainably in the banana industry. sector that generates economic income to the country. AEBE was founded by a group of farmers who became the key to a door that would look to the international market as a way to introduce their product and grow business.
Costatrading, Excelban, Exportadora Bananera Noboa S.A., Rey Banano del Pacífico and Unión de Bananeros Ecuatorianos, were the pioneers of AEBE. The contributions of engineers Alfredo Montalvo, Jorge Álex Serrano, Fabricio Espinosa and currently Marianela Ubilla Mendoza, have managed to maintain with social responsibility a successful organization that is internationally part of the main banana producers in the world. At present, AEBE continues to increase its number of partners with 44 main partners, representing 70% of Ecuador's exportable offer, and 47 adherents, thus having representatives throughout the supply chain.
We focus our gaze on the President of AEBE, Agronomist Marianela Ubilla Mendoza, graduated from the School of Agriculture of the Tropical Humid Region of the Earth University of Costa Rica, the first woman to represent this sector who for the last 21 years has worked hand hand in hand with the public sector and its associates, to obtain the greatest improvements for the entire banana sector, promoting fair competition and trust among the main actors in the export chain.
How does it feel to be the first woman to represent AEBE in 21 years of its founding? I have received it with great responsibility and gratitude to the partners who have entrusted me with this position. Also, a recognition to my parents who trusted me and my sisters to continue their work of years. I have to point out that the presence of women in the banana business is neither new nor an exception. There are women who are also leading successful export companies, who have been in school for decades and who, in the pandemic, demonstrated their ability to solve logistics, administration and personnel problems. I am sure that the presence of women will continue to be highly significant in AEBE.
What are the active partners? They are all those whose main line of business is the export of bananas.
The adherents? They are those companies that belong to the value chain: cardboard, plastic, assistance, logistics, shipping, ports, sprayers, financial sector.
What is the percentage in terms of exports of those that make up AEBE, that is, the active partners? AEBE has large producers and exporters that, in total, could represent 70% of the fruit's commercialization.
And the percentage of adherents?The adherent partners, as previously mentioned, are those actors in the banana value chain. They do not directly export the fruit, but they provide the inputs for its commercialization and production.
How does AEBE measure the production of its partners? 113,212,452 tons of bananas are produced throughout the world per year. India is the world's largest banana producer with a production volume of 29,124,000 tons per year. China ranks second with an annual production of 13,324,337 tons. Ecuador is in fifth place with a production that encourages us to continue working for its production and its growth in the market.
How do you statistically manage the production of your partners? AEBE has a team dedicated to information management and performs it for the entire industry. This, by compiling data from official sources regarding commercialization in order to know destination markets, growth and participation. On the other hand, we have an internal process to estimate the production itself, which we carry out with the help and cooperation of our partners. We also have cooperation agreements with important associations in countries such as Colombia and Costa Rica and with a research center in France. With the help of all these actors we can have a clear idea of what the marketing and production landscape is.
How do you analyze or study the incursion of the product for new markets? It can be said with total security that for Ecuadorian bananas there is no concept of new markets. According to the foreign trade report of the Central Bank of Ecuador, as of February 2021 we reached 60 countries located in the five continents of the planet, and Ecuador is the only country capable of doing so, due to its level of exports and the quality of the fruit, which allows you to keep it despite having to cover great distances such as China, which are more than a month.
We reach areas as complex as the Persian Gulf countries, where we compete with the Philippines, which despite not having to cross the Suez Canal, its export volume does not satisfy the requirements of this market. In other cases, we reach countries, where the fruit is redirected to others, as is the case of shipments to Turkey that follow Iran, Iraq, Syria and ex-Soviet countries. Therefore, each exporter does its study to go to a new market where there are already other Ecuadorian exporters or they decide to specialize or consolidate in a market.
The opportunities of new businesses and new niches, do you give a percentage to AEBE? It does refer to a monetary aspect in no way.
Does AEBE strategically have external partners? Yes. A particular case is ATREVIA, which gives us its support in a very important market such as the European Union, where important issues are being defined regarding sustainability, fair competition and where as a country we must consolidate ourselves.
In the XVII Edition of the 2020 International Convention, how many countries participated directly and how many indirectly? That amount reached 54 countries that participated directly.
The most important achievement of this convention is based on? The fact that 2,000 people attended digitally is an achievement due to the situation that occurred during 2020, if we see it compared to other similar ones that were canceled. The other achievement is that the international community was able to realize the reaction capacity of our sector and its entire value chain, to maintain the production and export operation that was paralyzed for a single day. In addition, in the face of the contingency, the sector kept the jobs, fulfilling our social responsibilities, paying the living wage; To which was added, a coincidence of criteria between the associations of producers and exporters, that it is time for the international market to recognize a fair price for the bananas we produce, highlighting that importers and supermarkets must share the responsibility of the business sustainability.
Did this convention generate any commercial expectations, and internationally? Business of close to USD10 million was generated.
Let's talk about trade agreements.
Within the negotiations that the government has promoted and proposed to the sector, what have been the benefits? We currently have three important Trade Agreements, the one with the European Union signed on November 11, 2016; the one signed with the EFTA area (Norway, Switzerland, Iceland and Liechtenstein), which entered into force in June 2020 and the Agreement with the United Kingdom, which entered into force on January 1, 2021.
There are three markets with constant demands and good prices. The effect with the European Union was immediate and in 2020, a growth of 10% in volume was obtained, which has meant that approximately 30% of the bananas from other countries that arrive at the ports of this economic zone are Ecuadorian. Trade Agreements have positive effects and therefore it is necessary for the country to enter the Pacific Basin Agreement, where there are countries like China with an effective market of 800 million consumers, South Korea, Japan, Russia (we have 96% From the market). Also reach a Trade Agreement with Turkey.
Negotiations with the European Union, to what commercial levels have they reached? On the subject of bananas, the Agreement made it possible to drastically reduce the tariff that Ecuadorian bananas must pay to enter the European Union market and put it at the same level as the fruit from Colombia, Peru and the countries of Central America. Like any Agreement, the goals are periodically evaluated and for the moment, our main concern is the certification requirements that imply additional cost to our production and that are not remunerated in prices.
With the United States of America, our main partner? Here it depends on this market increasing its demand, which in the last two years has been stagnant. There is no tariff problem because bananas enter with zero tariffs.
AEBE, have you ever thought about expanding your market through your own shipping fleets that allow you to reach your customer or consumer on time? AEBE is an association and the purposes of an Association are to provide permanent support in everything that has to do with export and production activity. The shipping business is a complex business and is managed by expert companies that are dedicated exclusively to that. They are part of the value chain, but in this it is better to say each one takes care of their own.
One of the disadvantages of competing with other producers is precisely due to this. For example, the Philippines has a greater advantage in selling on time to China mainly, we take ten more days. Not just the Philippines. Vietnam, Laos, Myanmar, Cambodia are much closer to China than the Philippines and they carry bananas by road, so they are becoming important suppliers of this fruit to that market. It is true that we have a geographical disadvantage. 90% of our banana exports must cross the Panama Canal and that involves an additional cost that neither Colombia nor Costa Rica has, but we have been able to compensate for this disadvantage with the quality of the fruit that allows it to endure that time of transit. Furthermore, 95% of our production is for export and the development of container technology is another element that allows us to compensate for this weakness.
Does our product sometimes arrive untimely in the country of consumption? In some cases, it does depend basically on exogenous problems, such as border closures that occurred in April 2020 on the Turkish-Iranian border, port congestion, both caused by the pandemic, or issues such as that occurred in March of this year, with the blockade of the Suez Canal by a mega-ship. There are always contingencies, but Ecuadorian exporters along with the value chain have shown a lot of knowledge to avoid these circumstances.
Do you think that the banana sector should be part of the production ministry, in order to better expose itself to the international market and obtain greater profitability in business? No. The government has to make its decisions, which are generally political. Our thing is business activity. However, we have given our opinion and suggestion in the forums that the Government has designed such as Proecuador, Comexi, in the Banana Negotiation Table, and we will continue to do so in these forums and in new ones that are designed or when we are required.
Generally, who or who benefits from a banana sector business roundtable? In the first place, the producer because the moment the exporter secures a sale, he immediately does so with the producer that supplies him with the fruit, and this becomes a cascade effect, because it benefits the entire value chain: cardboard, plastic, shipping, logistics, transportation and the economy, because as bananas are a weekly business, commercial activity is generated in communities and cities.
Being Ecuador a nation with 17 million inhabitants, which competes in the international market with countries like India and China, what does our producer need, to sustain or maintain itself and be more productive? A lower tax burden, permanent technical assistance from the State, credit at a fair rate that ensures the return of money to the financial institution, fair prices for the inputs it uses and commercial agreements that ensure the opportunity that its production will have a place in the international market.
In quality standards, does AEBE have a role? For example, issue BANANEROS certificates being an internationally endorsed body. We are always advising our partners on this issue so that they always produce with the highest quality through workshops and seminars. The issue of issuing certificates corresponds legally to Agrocalidad.
Why is the Ministry of Agriculture in these aspects handled slowly? A matter of paperwork that as an Association we have always asked to be reduced, there are efforts of the Ministry, however, there is still much to restructure, we hope that fundamental issues such as the protection of the sector against fusarium R4T will be handled with a table at the highest level and stay a priority for the next ministry.
Let's talk about you Ing. Ubilla.
What are the productive projections that the sector has for the last eight months of this 2021? Continue working together with the other unions to advance with the points that we can most of our strategic planning of the Ecuador Banana Cluster, such as proposing updates to the legal framework of the sector and efforts at the executive level that alleviate the burden on the sector.
It is complicated by demographic reasons that Ecuador is the first banana exporter in the world. Stay in the 5th. Second, it reflects the great socioeconomic commitment of its producers to be competitive. What strategy does AEBE endorse its partners? I don't think the term is to endorse. It is better to talk about what our partners propose permanently so that the country does not lose competitiveness in the world banana trade. For this reason, we have always insisted before the governments of the day to reduce the paperwork, labor flexibility, prices that respond to the destination markets and a greater control in the ports to avoid the contamination of containers, which is becoming a scourge and that causes more inspections of our cargo at the destination ports. From AEBE we have always insisted that producers and exporters comply with good agricultural practices and the control of pests that cause the retention of the load.
Its fundamental objectives in AEBE. The same ones that encouraged the founders twenty-one years ago: to be a union that promotes the integral development and sustainability of the Ecuadorian export sector, through direct collaboration with public and private sector entities. In addition, a personal objective is to consolidate the presence of the Banana Cluster as the entity that brings together the entire sector to establish medium and long-term strategies for the sector to consolidate its presence in the Ecuadorian economy.
How is your staff? Most of them young, sufficiently prepared to face the challenge of maintaining the prestige of our association as a reference organization, both nationally and internationally, of the Ecuadorian banana sector; with new ideas such as the Statistical Observatory, eager to work and that is doing so developing continuous training programs.
Behind you you have two executives who are decisive to apply a good strategy, I am referring to the engineers Iván Wong and José Antonio Hidalgo, vice president of the Board and Executive Director of AEBE respectively. How do you handle the administrative part and the implementation of the same? On a professional way. Each of us knows the responsibilities that we have, we coordinate actions that are supported by the Board of Directors and the tasks that are carried out are already determined in an Action Plan.
With the arrival of the president-elect Mr. Guillermo Lasso, a new physiognomy is generated to handle business abroad. For your messages given in the campaign and now as President-elect, what you ask goes in that sense. He has a vision of pragmatism, of favoring trade agreements and of opening up the Ecuadorian economy even more. This also implies responsibilities for us to continue working with dedication and not to relax our objectives of increasing the volume of our business.
Your message to our new president and to the country. The message is that you succeed in your management. The success of his government will be the success of the country, which will be reflected in a greater volume of exports, the generation of new jobs, and an improvement in the income of the Ecuadorian family. In addition, the tremendous responsibility of mobilizing a ship that is stranded, making it float again and above all getting the population vaccinated against COVID-19, are the great initial challenges. As a sector, I want to have legislation in accordance with current times, less paperwork, less tax burden and above all, full support to prevent the presence of Fusarium RT4 in our lands.
Ing. Marianela Ubilla for a People & Business.