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Chile has the ingredients of the new agricultural economy

With a privileged supply of functional ingredients and natural additives, the country has the ideal conditions to develop an export industry with foreign capital

 

The quality of Chile’s agricultural exports is widely known. The main ambassadors of exports from the country’s countryside are bottled wine, fresh fruit, dry fruit and cherries. However, agricultural development and incentive policies are opening up new opportunities in Chile for investors from the food, pharmaceutical and cosmetic industries, together with functional ingredients and high-quality speciality natural additives.

In the last five years, these compounds, contained in food that grows naturally in Chile and extracted in technological centers, have made inroads in the market with a strong increase in their demand.

“Due to the richness and diversity of the country’s climate, soil and primary materials, it was evident to us that Chile was one of the countries with potential to produce them,” said María José Etchegaray, chief executive of the Agrarian Innovation Foundation (FIA).

It is in this context that the government began a collaborative work that includes farmers, technological centers and private transforming companies in order to create territorial centers that serve as a basis for the development of a functional ingredients and speciality additives industry of natural origin in Chile. The initiative, carried out by the Ministries of Agriculture and Economy, is financed by the Strategic Investment Fund of the Ministry of Economy, FIE, for US$3,600 million, and the aim is to create four development centers within a period of no more than three years.

The goal is to build a cluster that adds value to agricultural exports, adding technology, innovation, development, and packaging systems in order to reach new markets.

This and other incentives provide a positive scenario for overseas companies, either through setting up a local operation or via the acquisition of a Chilean company in the sector. To put it simply, 31% of local companies (about 319,000) are from the food sector, of which only 19 are exporters or producers of functional ingredients.

Investment opportunities

Functional ingredients or speciality additives refer to foods that naturally contain high-value compounds for the food, pharmaceutical or cosmetics industries such as:

  • Astaxanthin (from microalgae cultures)
  • Alginate (from brown algae)
  • Saponins (extract from Quillay tree)
  • Stevia sweetener
  • Inulin dietary fiber from chicory
  • Antioxidants (anthocyanins) from maqui fruit
  • Phytosterols (from timber industry residues)
  • Hydroxytyrosol (olive polyphenols from industry residues)
  • Spirulina (from microalgal cultures)
  • Soluble fiber (from oat beta-glucans)
  • Anthocyanins (from wine industry residues)
  • Lycopene (from tomato processing industry residues)
  • Dietary fiber pectin (from apple residues)

According to FIA figures, in 2015 the global functional ingredients and specialty natural additives industry achieved exports of US$30,000 million.