國
立 政 治 大 學
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N a tio na
l C h engchi U ni ve rs it y
1. COMPANY OVERVIEW.
This section contains the company’s general description, its mission, vision and objectives, as well as, those key factors that will ensure the success of the business.
1.1 Mission
We serve the international market with a secure and constant Specialty Coffee supply produced under innovative farming techniques that enhance our products organoleptic characteristics as well as guarantee environmental harmony.
1.2 Vision
We aim to position Jinotega and our Estates as a source of Specialty Coffee for the world coffee market.
1.3 Objectives
1.3.1 General
Satisfy international coffee buyers and consumers’ needs with a stable High-Quality Nicaraguan Coffee supply.
Change the Business Model that has been used for more than 25 years shifting from pure coffee producers to coffee producers and exporters taking advantage of the globalization trends that are benefiting the current coffee market.
1.3.2 Specific
Develop a High-Quality coffee brand that can be an appeal to export to different international markets.
Supply international buyers with at least two types of coffee: Washed Specialty Coffee, and Natural Specialty coffee.
Enter into the Taiwanese Coffee Market in the first year of operation and; after the second year, develop the market in different countries.
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High-Quality Product – In all the stages of the coffee production, high-quality standards must be followed to accomplish an above 85 points on the Specialty Coffee American Association (SCAA) cupping score system that meets the requirements of our buyers in the international market. Our business will offer Specialty coffee such as Natural coffee, as well as, others High-End and Low-High-End green coffee beans, carefully selected and packaged to maintain long-term quality. Moreover, exotic and limited edition coffee flavors will be produced through micro-lots.
On-farm care – During the nine-month period from the flowers to fruits, it is essential to pay close attention to the coffee plantations and provide the personalized care and attention required.
All the activities to perform must ensure product quality and growth in productivity per hectare.
Harvesting, pulping and fermentation must be standardized and controlled. Our business has already two specialists in coffee grow with more than 15 years of experience each.
Innovation in practices and Product Development – The coffee market is in a mature stage.
Offering different products and options to our international buyers is a crucial activity to achieve differentiation. Research and Development projects will be useful to fulfill the market with new products or blends that meet our buyers’ needs.
Establishment of a Strong Relationship with Buyers – Many international coffee buyers are interested in knowing from first-hand the farms that grow the coffee they are acquiring. Our business will be open to receive any foreign visitor that wants to assess the processes and practices that we perform on the coffee. We also will visit our buyers to know their process and to understand better the needs of the markets they serve.
A Strong Brand Image – Our coffee export business must gain legitimacy among international buyers. We will achieve it by guaranteeing a transparent supply chain to them by leveraging on technological tools such as a Traceability System. Our brand will be present at International Coffee Shows offering samples of our products to buyers and potential buyers.
Our business will seek international certification for our products. Moreover, social and
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
environmental standards such as labor, pesticides usage and water usage and disposal will be followed to ensure that our people and our environment are being treated as a priority.
1.5 Brand and Product Overview
“Las Colinas Estates” is a company dedicated to the commercialization of coffee which targets to satisfy the requirements of international buyers and consumers. Our company stands out for the value that comes from over more than 25 years of experience; we come from a strong family tradition committed to the production of high-quality coffee. It is produced in two estates that are located in fertile lands and under the cool and dense mountain on the fringes of deep forests in Jinotega “The Capital of Coffee in Nicaragua” at an average height of 1,200 meters above sea level, temperatures between 18 and 22 Celsius degrees and annual precipitation of 1,800 mm.
Our vertical integration across the coffee value chain including harvest and wet and dry mill process allows us to deliver different types of Specialty Coffee green beans with consistent quality and taste to our international partners.
1.6 Company Ownership
“Las Colinas Estates” is a family business that will operate under the Nicaraguan Corporation (Sociedad Anonima – SA). The Nicaraguan corporation is the most commonly used type of business entity. A corporation must appoint at least one director and two shareholders who can be of any nationality. The minimum paid-up share capital required to complete the incorporation process is USD 1.00. The corporation must appoint an auditor and must submit audited reports annually.
1.7 Company Background
“Las Colinas Estates” has its origins in the tradition of coffee cultivation that the family owners started in Jinotega, Nicaragua 30 years ago. The first coffee estate the family adquired is Santa Lucia Estate (40 hectares) back in 1988. Nowaday, the family owns two coffee estates and its second generation is running the business. The family, through all these years, have developed
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a strong know-how in coffee production, shown in the quality of its coffee. In recent years the productivity has been raisen as a result of improvements in coffee grown techniques. In Table I it is shown that in three years the yield jumped from 25.8 60 Kg bags per hectare in the cycle 2015-16 to 34.4 Kg bags per hectare in the cycle 2017-18.
Table I. Historical green coffee beans production and productivity per hectare
2017-18 2016-17 2015-16
Quintals1 1522.00 1206.00 1144.00
Quintals per hectare 38.06 30.14 28.59
60 kg bags 1153.37 913.40 866.48
60Kg bags per hectare 28.83 22.83 21.66
So far, the way the family has been commercializing its coffee is in the traditional way: deliver almost all the coffee production in “pergamino oreado” phase (a term used to refer to coffee with parchment and 45% of moisture, not ready to export) to a trading company SOPPEXCCA that works as a middleman in the coffee value chain in Jinotega. We have been working with this company since 12 years ago, because it gives us the best prices. I pays for our coffee about USD $15 cents/lb above the international price, and it also provides the best financing options for keep running the coffee producing operation.
As an alternative way, we sell our coffee in the local market to traditional traders who pay according to the international coffee price. In the 2016-17 cycle, we established a commercial relation with another middleman company EXPOCAMO. It paid US $50 and US $70 dollars above on the stock exchange for high quality coffee.
However, the above business model keep us away from getting real benefits from our coffee production. In all this years we haven’t developed neither a brand nor direct commercial relationships with international coffee buyers and roasters; hence, our farms, coffee producing techniques, and products are unknown by the global market. In Figure 1, the Nicaraguan coffee value chain is explained. The position that our business has occupied during all its years of
1 1 quintal is equivalent to 100 lb. and to 45.46 Kg.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
operations is a pure coffee producers, just transforming coffee from cherries to “pergamino oreado” and selling it at low prices in the local market.
Figure 1. Nicaraguan coffee value chain
There are five players that separate our operation from the final consumers. We aim to jump to the third link in the coffee value chain and from this position we will be able to negociate better prices, create brand awarness and lay the basis for a next stage in the business that allow our business to be closer to the final consumer.