Category: Ecuador for Investors

When you move to a new country and try to sell a product to the locals, there are two ways to do things.

The right way.

And the wrong way.

Especially when it comes to food.

The wrong way, at least if you dont have a multi-million dollar marketing budget, is imposing your “superior” foods on the local population.

For instance, pizza.

Maybe you can make a much better pizza than they have available locally according to your North American or European standards.

But maybe the pizza in Ecuador is the way it is for a reason.. with its more liquidity and almost sweet tomato sauce… cause thats how the locals like it.

Its hard to know as a new-comer.

So all you can do is observe.

And to sell the locals something they already eat like crazy.

Its simply much easier.

Enter Papaya.

But there are two types of Papaya that grow in Ecuador.  The Hawaiian breed and the Criolla breed.  The Hawaiian is smaller and for export primarily, cause the locals don’t eat it.  (Actually, some consider it pig food.)

The Criolla is the gigantic rugby-ball-looking Papaya that is for local consumption only, not export, and boy do the locals love it.

Its truly one of those products where if you grow it they will come.

Papaya Criolla likes a dryer climate, while it can and does grow in the Amazon region its better grown in the coastal region of Ecuador.  Specifically in the areas of Santo Domingo to Independencia or on down to Quevedo.

In these ideal areas, the Papaya can grow without any formal irrigation system in place, its fine with just the natural rainfall in this area.

The Papaya is also best grown on flat or almost flat land.

In these areas land apt for Papaya production usually can be found starting around $3-6000 USD per hectare.  According to my local Papaya expert, 30-40 hcts is the minimum for a worthwhile, highly-profitable Papaya farm.

For today, lets take a closer look at the Papaya Criolla (lets give the locals what they already want).

The Papaya tree has a lifespan of 2 years.  It begins to give fruit at the 8 month mark.

And harvests from there are weekly.

The Costs

The initial costs of planting the crop and preparing the soil average around $4-5k per hectare.

After that, costs are minimal with this crop as for a farm of 40 hectares, all you need is one live-on full-time employee (who makes about $500 a month).  And about 5 part-time employees that from the time the plant begins to give fruit at the 8 month mark, you will need to hire them about 2 days a week paying each $15 a day to harvest, weed and fertilize the crop as needed.

It may also be a good idea, especially starting up, to hire a technician or agro-engineer with experience in the crop, to help manage the technical aspects of the farm.  For a full-time agro-engineer you are looking at minimum $1000 a month, but you could also hire one on a part-time basis.

The Production

Each hectare fits about 1100 Papaya trees.  About 100 of those are masculine and dont bear fruit and are used for future breeding purposes only.

Each tree during its lifespan gives at least 20 fruits, some can give as many as 30 if the care has been good.

Thats 20,000 fruits per hectare per each 2 year cycle.

The Sale and The Profit

The fruit sells wholesale at about $1 per fruit.

The fruit is an easy-sell and is often sold to the retail sellers at open-markets or directly to top-end restaurants.

Thinking in ballpark figures for busy people like yourself, thats $20k per hectare in brute sales over the course of a 2 year period.  According to my expert, the grower can expect about 40% of that is usually the profit for the farm owner.  Thats $8k per hect, every two years… so for a 40 hectare producing Papaya farm, that would be about $320k over a two year period or $160k per year, however youd like to look at it.

ROI

So even if you bought the land at the more conservative $6000 per hct for a 40 hct farm… for a total of $240,000 youd be able to realistically make that money back within a bit over 1 and 1/2 years.  Not bad.

This is certainly a product Im considering for my upcoming agro-investment here in Ecuador.

For much bout Papaya and other profitable products in Ecuador subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

Ecuador is closing its borders.

To many imported products that is.

I don’t necessarily agree with it, but it is what it is.

Like it or not, with policies like this there are always a few “winners” and often a lot of “losers” (like the end consumer who now has to pay more for inferior products).

But why not take advantage of the opportunity and start producing one of the products that has now become more restricted to import?

Like Chickens.

Already, one of Ecuadors most popular short-cycle “cash crops” among locals.

It’s great because every 6-7 weeks you “cash out” recouping everything you’ve invested and the take-home-profit.

And its one of those produce it and someone will buy it things.

Everyone eats chicken in Ecuador.

This week I had the chance to sit down with a veteran chicken farm manager at his place during my research.

Here’s the skinny… 

Start up costs, Investment

One of the great things about chicken farming is the small amount of land comparatively you need to get started.  Plus, the land itself can be in the boonies and CHEAP because thats ideal for a chicken farm.  You want to distance yourself from any sizable populations or neighbors cause they may not be fond of the smell.

You’ll need a lot with at least space for one farm house big enough for a sizable population of chickens.  Most chicken farm houses are 20 meters by 120 meters to be precise.  Thats 2400 m squared of land.  Not much.

The lot has to be flat and have a water source.

But many chicken farmers have more than one farm house, for instance 7, with a batch of chickens each, so they can be harvesting a new batch each week providing a steady income so this business pays for itself.

Each farm house this size holds 20,000 chickens.

You can chicken farm about anywhere in Ecuador, but it is ideal in the warmer regions of Ecuador like the coastal lowlands.

In warmer weather the growth cycle shortens to 40-42 days, while in colder highland areas the cycle can be more around 50 days.

Costs

This business is also nice because its not labor-intensive.

You’ll have to pay one farm house keeper per farm house.  They usually make the basic wage in Ecuador ($340/ month PLUS incentives totaling around $800/month).

Every 6 weeks you’ll have to pay about 10 guys $10 a day each for three days to round up the chickens for sale.  Total $300.

The food can run around $7000 per cycle (6 cycle).

Basic services like water and electricity aren’t much in Ecuador but could also cost a few hundred dollars.

The chickens themselves are bought young and little at $.40-.50 cents each.

In total, budget $70,000 USD to raise 20,000 chickens my expert explains.

Income and Production

After 6 weeks the chickens are sold (alive) for $.80 cents per pound. Each chicken weighs around 5.5 pounds.  Total= $4.40 per chicken roughly.

$4.40 x 20,000 chickens = $88,000.

Profit 

Talking in ballpark figures per farm house which holds 20,000 chickens over a lot of 2,400m2 the profit would be roughly $88,000-$70,000 TOTAL $18,000 every 6-7 weeks.

Then depending on personal preference anywhere from 5-15 days will be needed for farm house cleaning and disinfecting between cycles.

Risks

Of course, diseases are the biggest risk, thats why if you have multiple farm houses you want to spread them out and be sure to have only one farm worker exclusively per farm house.  He could carry a disease on his clothes from one house to the other.

But now a days the chickens come vaccinated and this is not a huge problem at all in Ecuador.

Selling the crop is not a problem, just make it and finding a buyer is relatively trivial.  What does vary a bit is the market price like most commodities.

Want more?

Like but what about the technical aspects of the actual chicken-growing, how to get started, buy the best chickens, find the best workers and more?

For that and more subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time: