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Future bright for Manduvirá’s sugar refinery

manduvira-paraguay-02-470pixels.pngAugust 26 2015

Cooperativa de Producción Agroindustrial, Ahorro y Crédito Manduvirá Ltda (Manduvirá) is an Oikocredit partner and cooperative producing organic and fair trade sugar in Paraguay. It operates out of the district of Arroyos y Esteros in the department of Cordillera. Manduvirá creates access to markets for local farmers, enabling them to receive fair prices for their produce. The cooperative has over 1,680 members, the majority of whom are sugarcane growers, reapers and factory workers.

Although Arroyos y Esteros is known as ‘the birthplace of organic sugarcane’, job opportunities are few and far between, and most young people migrate to the country’s central department of Asunción in search of work. In the past, high transport costs often forced sugarcane farmers in the region to sell to buyers close to their farms, leaving them vulnerable to unfair prices. In 2008, Manduvirá temporarily solved this problem by renting a factory to refine the organic sugar for the farmers; however, costs remained high as the factory was nearly 100 km away.

Turning a dream into reality

It was always the cooperative’s dream to open its own environmentally friendly sugarcane refinery in Arroyos y Esteros, which would ensure fair prices for farmers and create employment for the region’s youth. A loan from Oikocredit and other investors turned this dream into reality in April 2014, when Manduvirá opened its own sugarcane refinery. At the opening, Andres Gonzalez Aguilera, general manager of the cooperative proudly stated: "Thanks to the new factory, Cooperativa Manduvirá can fulfil its and the whole community's dream of providing employment and training, in particular to young people and women, as well as producing top-quality, organic sugar.

In attendance were guests and representatives of partners from a whole range of countries, as well as public and religious dignitaries, government ministers and the Paraguayan vice-president Juan Afara. The opening was met with much anticipation and praise from all over the country.

One year on

Since the opening of the refinery, Manduvirá has faced setbacks typically seen in an enterprise’s start-up phase. During its first harvest, several adjustments had to be made to the new refinery to attain optimal productivity and efficiency.

Oikocredit country manager for Paraguay, Rodrigo Ortiz, said: “During the start-up phase of the refinery, the cooperative faced working capital shortages as well as a volatile market which affected production. Manduvirá has overcome many of these challenges and the outlook for the future is not only bright, but we have been assured that the cooperative has come out stronger as a result in its quest to serve its producer members.” Since the refinery’s opening, 141 direct jobs have been created.

Outlook

2015 has seen favourable climactic conditions for the sowing stage of the sugarcane, with high-quality sugar being produced by Manduvirá’s member producers. Moreover, figures for the 2015 harvest (beginning mid-May), show organic sugar production estimates at between 10,000 and 12,000 tons - a marked improvement on the 4,300 tons produced in 2014, the first year of the refinery’s operations. Since the beginning of 2015, Manduvirá has been negotiating with several national and international organizations to raise working capital to finance the 2015 and 2016 harvests. Manduvirá currently exports its sugar to North America, Europe and Japan as well as South Korea and Australia.

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