Australian Pineapple Products Exporting Company (Appec)

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Company Background
The Australian Pineapple Products Exporting Company (APPEC) was incorporated in Central Queensland, Australia by a group of 10 top pineapple-growers and merchants (5 large individual growers, 1 large fruit merchant already exporting, 4 packing sheds representing groups of growers). These 10 pineapple-growers are among the best operators from each of the four main pineapple-growing districts, Central Queensland, North Queensland, Southern Queensland, and the Wide Bay area near Bundaberg. John Thompson is the CEO of APPEC and the Chairman of Australian Pines Pty Ltd Grower shareholders of Australian Pines Pty Ltd have experiences on occasional trial export shipments of whole pineapple fruit to New Zealand and visit to Asian and US pineapple plantations Australian Pines was a major participant in a government-sponsored study of the feasibility of dried pineapple production for export, and found out that it is indeed viable but did not cover the trading issues

The size, shape and weight of the fruit are not conducive to export Most Asian and North American markets have their needs apparently well met by local producers, in the former case at much lower costs Australian industry has lacked critical mass and capital which would readily enable pineapple production to be done by Australians in foreign countries Quality and consistency issues were still not resolved

Australian products suffer from a significant wage rate differential

There was an oversupply of fruit on the local market and worthwhile profits were not being made The Australian value-added sector is reported to be the fastest-growing sector of fresh food

Golden Circle Cannery, Chiquita, Dole Del Monte and other large, established operators

What factors are making the Asia-Pacific region an attractive export opportunity for APPEC? What factors would make it unattractive for them?

Having 4 main districts planting pineapple, Australia’s very high production of pineapple seems to seek other markets to position its product and this is through exporting. The value-added of imports of fresh produce in Asia have been growing at 22% per annum. This was an attractive trend for APPEC directors that gave them an idea that there is a great opportunity for their produce. A growing demand for the product leads the way for the firm to fill in the gaps between the product’s demand and supply in the region. During recent years, fruit marketing groups became a trend worldwide that helps in creating a connection to complementary producers, processors, specialist services and others. The government has also provided programs for exports; one of this is the Food Industries Networking for Asia (FINA). Attractive export opportunity for APPEC is the pre-existence of consumption pattern for dried pineapple pieces sold in convenient snack packs in Asia. They can penetrate the Asian market if they will be able to make their price competitive, make their cost lower and provide consumers high quality of products. On the other hand, there are factors that make the region unattractive for export. Most of the countries in the Asia-Pacific region are tropical, where pineapple as well as other tropical fruits can be easily grown and where needs for the product can be easily met by local producers. Australian products also suffer in regions wherein most countries have lower wage cost but this can also be viewed as an opportunity for the firm if they decided to locate production in the country, labor cost will be lower therefore they can lower the price for their produce that can be translated as a competitive advantage for the firm. Differences of standards due to geographic situation greatly affect the necessary requirements that an exporter should meet, like the ideal volume requirement, packaging and brand identification. Such requirements differ from one region to another also because of different cultural and...
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