June 26, 2013 How is Holambra Harvesting More?

Volume 16 | Issue 5

Look to cotton and commodities. This cooperative continues to grow despite a constant number of associates. Reuben Ford describes an approac

Cooperativa Holambra appears in many published industry rankings of Brazil’s leading agricultural cooperatives. It is a national reference in cotton, grains, fruit and flowers.
In the last five years Holambra has experienced unprecedented growth in profits, products and infrastructure with a stable number of 114 associate members.

“Our cooperative members grow individually and we grow with them — we form a hardworking union that invests in the present to build a promising future,” states Managing Director Renzo Guazzelli.

A simple strategy, but big results: revenue increased from $23 million in 2000 to $175 million in 2012.

More impressive still is that 75 percent of Holambra’s growth has been in the last four years.

The reason: Production. “Our associates have increased their capacity and productivity and we have researched methods to improve harvests, building up cooperative infrastructure to support this growth,” Guazzelli explains.

A Long Time in the Making
Cooperativa Agro Industrial Holambra was founded in São Paulo state in 1960. The first associates were producers from Paranapanema and Dutch immigrant agriculturalists from Holambra.

For the following five decades, Cooperativa Holambra went through a series of transformations, developing new areas and focusing on farming commodities, fruit and flowers.

Today, the cooperative has 38,000 hectares of production land, on which the 114 associates cultivate grains such as cotton seed, corn, soybean and cevada.

Guazzelli points out however, that the cooperative did not show signs of growth until the 1990s: “Growth was very limited – for a long time the cooperative remained as it began.”

In the 1990s as a result of drought, Holambra began investing in high-tech irrigation, which today ensures and encourages rich harvests. “By the end of the 90s, 50 percent of our land was irrigated – now over 70 percent is covered by pivot irrigation systems,” Guazzelli confirms.

With more guaranteed production, the cooperative members expanded their farms and by 1997 Holambra’s growth graphic, which had been flat for almost 40 years, moved sharply upwards.

“Grain storage facilities expanded from a 30,000-ton capacity to 126,000 tons,” Guazzelli exemplifies.

Cotton production increased significantly and is now Holambra’s leading product. The cooperative produces 15,000 kilograms of cotton an hour.

Cereals and fruit production also rose. The cooperative increased the range of fruits to include peaches, plums, nectarines, guava and passion fruit among others.

“We don’t plant anything or choose to plant anything,” Guazzelli clarifies. “The decision to produce new crops is made by the associates – we offer advice and support and the full services of our cooperative.”

In some cases, clients contact Holambra directly, requesting new products. Guazzelli recalls that this was the case with popcorn seed and cevada – the idea was suggested to the associates, approved and the products added to the range.

“All of our growth has come in the last 13 years. Increasing numbers have enabled us to offer our members a competitive advantage – one of our main differentials,” Guazzelli says.

Structured Response
Holambra’s infrastructure has responded to growth, with two additional facilities, increasing proximity to the associates and processing turn-around.

The cooperative’s headquarters are in Paranapanema in São Paulo, where 150,000 square meters of factory and dry storage space specialize in grains and fruits.

The two more recent plants are in Taquarivaí and Itapeva, also in São Paulo state. “Our facilities are all equipped with the latest technology and new equipment for receiving our associates’ products, processing, storing and selling them,” Guazzelli adds.

As well as investing in the new locations, Holambra has installed IT systems to monitor operations and maintain constant communication between the cooperatives plants and divisions.

“Our aim is to be a step ahead of our associates – providing them with everything they need. We are currently investing $5 million in doubling the capacity of storage at our Itapeva plant from 32,000 tons to 64,000 tons, in anticipation of bigger harvests,” Guazzelli says.

In the headquarters in Paranapanema, a new seed-processing division is being constructed to handle new produce, such as popcorn.

Plan, Position, Produce
Thanks to a monopoly in São Paulo, Holambra has established a strong name in cotton. However, following the decisions of associates mean that the cooperative has the flexibility to focus on one crop per harvest, if the market dictates.

“As an exception, this year soybean is our focus,” Guazzelli confirms. “Each year we plan operations based on market research and communication with our members – this helps us meet the demands of our producers and the market.”

The predicted soybean super-harvest in the United States this year will undoubtedly cause Holambra to shift production back to cotton. Corn, wheat and soybean production is planned in September for the following year.

Holambra was recently named one of the 25 fastest growing farming cooperatives in Brazil, and in 2010 entered the top ten grain and cotton producers.

Depending on the publication you pick up, Holambra is making the cut: the top 1,000 best Brazilian Companies and top listings in sales and Brazil’s leading agribusinesses.

Guazzelli attributes these achievements to experience and expertise too: “Our associates are not amateurs. We don’t want to increase volumes by incorporating more producers, but to maximize efficiency with those we already have.” This is the key to the sudden success.

Holambra has invested in machinery and knowledge with its members. The 323 employees include engineers and qualified technicians, who provide full assistance to the associates: “Our producers use the best planting technology,” offers Guazzelli.

In fact, Holambra averages 20 percent annual growth in the last ten years, despite varying turnover, due to crop focus: Guazzelli explains that “this year [Holamba] expects $150 million in revenue, $25 million less than last year, because soy is cheaper than cotton, but growth remains constant.”

The close relationship and fidelity between cooperative and associate are clearly a strong point for Holambra. “The associate is also the owner of the company,” Guazzelli says. The result is a solid and dependable company.

This strength has guided the cooperative through the price challenges posed by international economics. “When prices world process increase our production decreases, but our flexibility avoids serious repercussions for our economy,” explains Guazzelli.

Modesty and trust are at the heart of Holambra. New contracts are currently being analyzed and Guazzelli promises more investments and expansion in the next four years.

Production and sales on the up, Cooperativa Holambra is one to watch.

Subscribe to Industry Today