Frutolândia
It’s cherry season at the moment but at the modern Frulact factory in Cova da Beira every day tonnes of seasonal fruit are handled. The quality of the products and the boldness of the business people made an international success of a family concern.
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With eyes fixed on the green of the Gardunha Mountains, there’s a surprise just around the corner: a blanket of snow seems to be covering Cova da Beira. The cherry trees are in bloom and when their fragile petals fall slowly over the land, it is reminiscent of the snow that we glimpse on the peaks of serra da Estrela, in the distance. In the valley, on the industrial estate of the town of Tortosendo, we find one of the most modern factories in the agro-industrial and food sector in Europe: Frulact.
“It’s a model factory!”, explains João Miranda, CEO of this internationally-geared Portuguese business group, leader in some of the markets it operates in – Iberian Peninsula, North Africa and the Middle East – the third player in France, one of the largest European markets in the sector and the most demanding.
Looking towards the future, the factory was built in 2007 to have capacity to deal with the needs of the French market, which the company intended to succeed in. It occupies a covered area of 12,000 m2 and is equipped with the most advanced technology available. Once again, the investment was made before expanding. With the proximity of producers ensured (Cova da Beira, in Beira Baixa, is one huge orchard), they had to guarantee market proximity and so acquired their French competitor Granger Bouguet Pau.
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Swim against the tide
When a climber feels they are slide down the glacier valley, when climbing the 1,928 metres of the Cântaro Magro, in neighbouring serra da Estrela, they don’t stop or look down, they throw the safety rope to the top clip and pull themselves up. Frulact did the same. In the middle of the 2009 recession, with a decrease of around 18% in the dairy products sector in terms of the added value segments, the company consolidated its position in the French market, acquiring the GR6 division of the Kerry group. By doing this, it possessed an industrial platform that was perfectly adapted to its objectives, which allowed it to increase turnover by 35%. “Today, the French market represents over 50% of our business volume, with Frulact achieving the greatest growth in the markets where it operates”, highlights the CEO.
Commitment to innovation and competitiveness led the 420 workers at Frulact – divided between the six production units, three in Portugal (Maia, Ferro and Tortosendo), one in France, one in Morocco and the other in Algeria –, to make 45 million euros in 2009 and 60 million in 2010. For 2011, they estimate a figure of 70 million. Investment has been to the tune of 50 million euros.
Family project
In 1987, the dairy products worker Arménio Miranda, today Comendador da República Portuguesa and current president of the group, had the nerve and vision to identify the business opportunity of fruit-based products for the industries involved with dairy products, drinks, ice-creams and industrial cake-making, and he started the foundations of this business with a small almost cottage industry unit in Matosinhos, in the Porto region. At the beginning there were no more than four people and being multi-skilled was an essential requirement. Four years later, three million euros was invested in a factory in Maia, which today provides support in terms of services for all the group’s markets and industrial units.
“My father was the mentor for the Frulact project. With his know-how, with his technical expertise and knowledge of the market, he created a family project with me and my brother, Francisco Miranda, who, following in his footsteps, had trained in the area of dairy products in France”, says João Miranda.
Right in front of us, the colour and smell of sliced strawberry fills the production line that is equipped with three mixing tanks and boasts a production capacity of 2,100 kilos of fruit preparation per hour. Over the different seasons, there is a wide variety of fruit from both local orchards and more distant lands. In this way, food safety and hygiene, which is something that this company prides itself on, ensures that there is always is always the right combination of quantity and quality.
“We have processes that are pharmaceutical in their standards”, says 36-year-old factory director, Arménio Arantes. He has spent 17 years at Frulact, where he has acquired experience in all sectors, including quality and development, before assuming control of this part of the operations.
In Tortosendo, Frulact handles 1,200 raw materials and around 650 finished products. Arménio Arantes explains that, “even making ten apparently identical things, they will always be different, even if it’s in terms of the aroma, riper, fresher, more floral….”
Lean manufacturing has been implemented in all Frulact’s production units, creating opportunities for constant improvements and cancelling out losses and waste, adds João Miranda.
The fruit preparations that leave here go into yoghurts, ice-creams, juices and baked products that fill the shelves of large supermarket chains, catering services at airports and local cafés.
The R & D section is based on the Maia site and, via partnerships with universities, it has been involved in various projects including ones that focus on methodologies that optimise fruit quality for industrial use, thermal technologies, pesticide detection methods, development of natural colours for the food industry, fruit preparations enriched with isoflavones, plant extracts and Omega 3, or the extraction of anti-oxidant compounds found in strawberry stems.
It was in this area that Frulact invested in a new project this year, FRUTECH – Innovation and Food Technology Centre, which it coordinates and in which the Instituto Politécnico de Viana do Castelo has a 30% share. João Miranda explains: “It’s a true alliance with the scientific world, with the purpose of creating knowledge and consequently differentiated and innovative products and processes, which are essential elements for creating added value, and for always being one step ahead”.
Internationalisation
Frulact’s relationship with Cova da Beira began in 1998. That year, the company acquired the industrial unit of the Fruit-growers’ Cooperative, which led to the setting up of its second factory in Portugal. Then, and now, the idea was to forge a relationship with the growers, improving food safety and improving the quality of the raw material. The objective is that the fruit of the cherry trees, now in blossom, get to the consumer with their unique natural characteristics intact: succulent and aromatic.
This constant focus on excellence allowed products to become established and gain market share. Spain was the first step in terms of the company’s internationalisation strategy in 1994, which continued with the objective of conquering the North African and Middle Eastern markets. In 1998, the first factory in Morocco was set up. In 2007, the company strengthened and consolidated its position with a production unit in Algeria and another in Morocco with European quality standards, using the latter to export to Tunisia, Libya, Egypt and other Middle Eastern countries.
As if this wasn’t enough, it becomes part of the COTEC network, which awarded it the 2007 Innovation Award. “As a company, the Frulact group founded its undoubted success on a culture of human capital, unquestionable competence, a passion for what it does and a strong innovation culture”, says João Miranda.
This attitude won João Miranda the INSEAD Entrepreneurship Award (2010), as well as an Honourable Mention from Ernst & Young’s International Entrepreneur of the Year and the company the Portuguese-French Chamber of Commerce and Industry Investment Trophy (2007).
With its mind fixed firmly on the future, Frulact, without ignoring the possibility of diversifying its products in European markets, is looking to expand across the Atlantic: North, Central and South America and, heading further south and continuing its expansion over the African continent.
“Now and in the short term, Frulact aims to consolidate its investments”, underlines João Miranda, adding that the company won’t sit idly by if windows of opportunity present themselves in certain markets, particularly emerging ones, which are the ones that offer greater chance and guarantees of growth.
The strategic direction is defined. What is needed now is persistence, innovation and being proactive to achieve the goal; virtues that are valid both in the business world and for the sinuous climb up to the Tower, on the top of the serra da Estrela, surrounded by blossoming cherry trees, which, within a few months, will be supplying the Tortosendo production line with its tasty red fruit.
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byAlmerinda Romeira
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