South American Real Estate News

Chile’s breadbasket Angol moves to the country’s new fruit-growing region

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According to the Chilean Office for Agricultural Politics and Studies (ODEPA), in the last 20 years, the planted area with fruit trees in Chile has increased at an average annual rate of 3.2% between 1999 and 2019, from 182,000 hectares to more than 340,000 hectares. All regions have registered an increase in their surface, highlighting increases in cherry (13.2%), walnuts (9.3%), hazelnuts (39.8%), olives (11.4%) and blueberries (23.8%). Thanks to these growths, among other crops, Chile has been an agro-exporting power since the 1990s, making the sector the second-largest export engine after mining.

However, in recent decades, global climatic changes, particularly local ones, have led Chile to go through a great drought, strongly affecting the growth of fruit plantations in the central zone and north of Santiago (Km 0). On the other hand, new South American countries have joined the agro-export boom, such as Peru and Colombia, which are quickly taking market positions previously exclusive to Chile, with crops such as table grapes, avocados and blueberries. However, these countries are located at lower latitudes and close to the tropics, lacking cold climates with relevant surfaces (except for smaller and fragmented areas in the Andes) to cultivate large extensions of crops with cold hour requirements, such as apples, cherries, stone (peaches and nectarines), walnut, hazelnut, and chestnut trees, among others.

This new reality has generated a reconversion and displacement of the Chilean fruit production matrix much further south of Santiago, with the Araucanía region as a new growth pole with a growth rate of more than 700 hectares per year in the last 12 years.

The region, divided into two provinces (Malleco to the north and Cautín to the south), becomes attractive and necessary for fruit growth as it has an abundance of cold-winter hours ( 4.5° or 10°C) in spring, abundant rainfall, rivers and lakes for irrigation, excellent soils and good connectivity to roads, airports and ports, as well as a long agricultural tradition.

In this new Chilean fruit frontier, the areas north of Temuco (at latitude 38° South – 680 km south of Santiago), highlight the Angol microclimate (37.8° latitude South) that has appeared for more than 150 years as an agricultural centre of excellence. This condition is given by the presence of the Nahuelbuta mountain range to the west, which captures the copious rains coming from the Pacific Ocean, giving Angol and Renaico a drier climate, very favourable for the production of fruit and vines. This dry Mediterranean climate in summer also has a tremendous thermal oscillation between day and night, which translates into fruit with perfect colour and better post-harvest condition, without excessive radiation, ‘sunburn’, or damage to the skin of the fruit, as occurs further north in fruit-growing areas such as Curicó, Rancagua or Santiago.

The Nahuelbuta mountain range is made up of a massif of about 100 km in the north-south direction and 70 km in the east-west direction, with its highest point close to 1,400 meters above sea level, with a reasonably extensive plateau around 1,000 meters above sea level, retaining the snow in the high parts that generate slopes towards the lower valleys. The annual rainfall at this highest point is over 3000 mm/year, in contrast to the lowlands to the east with around 1000 mm/year at 200 meters above sea level, with a privileged climate in the valleys and central plain with temperatures ranging from 4°C to 26°C and seldom drops below -1°C or climb to more than 30°C.

The rise of modern fruit growing in Angol during the 20th century has attracted significant local and foreign investment, which despite specific territorial claims by indigenous groups in other areas of the region, has grown and lived in harmony in Angol for decades. Being one of the best areas in Chile to produce apples since the 1960s, it is not surprising that today Angol has a significant processing and cold infrastructure installed, together with purchasing powers with a long tradition also in other crops such as cherry, apple, walnut and berries, and others with excellent projection such as almond trees, olive trees and vinifera. This condition has attracted large fruit companies to install their processing plants and productive orchards in the area. To name a few, Exportadora San Clemente, Frusan, San Francisco – Garces Fruit, Viveros Copequen (David del Curto), or the local benchmark Frutícola Angol or CHISA – Chilean South Apples, among many others.

Finally, the area also has an economic attraction not common in other fruit-growing areas: Renewable energies, particularly wind power. The region and specifically the communes of Renaico, Angol, Ercilla and Carahue have a potential equivalent of 1,933 MW, placing this area as one of the most promising clean energy generation in Chile. For example, the commune of Renaico to the north of Angol, the abundance of the wind resource, the geographical conditions of the area and the good coexistence and interaction with the neighbours, especially farmers who see this activity as an additional source of income and alternative use of the land, allowed Start up the Renaico Wind Farm in 2016, made up of 44 wind turbines and a power of 88 MW.

Santa Olga Fruit Center, Angol
San Clemente built its second packing and refrigeration plant in the region of La Araucanía, to meet the need for fruit processing services given the constant productive growth of the area's own and third-party fields. This plant has a 7-lane apple line and a 12-lane cherry packing and production line. Its maximum processing capacity is 260 tons of apples per day and 110 tons of cherries per day.
Santa Olga Fruit Center, Angol
San Clemente built its second packing and refrigeration plant in La Araucanía to meet the need for fruit processing services, given the constant productive growth of the area’s own and third-party orchards. This plant has a 7-lane apple line and a 12-lane cherry packing and production line. Its maximum processing capacity is 260 tons of apples per day and 110 tons of cherries per day.

Source: https://sclem.cl/infraestructura/region-araucania/

Angol is the region on the northern border of Araucanía and the beginning of the southern border of the new fruit growing in Chile.

Source: Gustavo Cardemil GCA

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About Gustavo Cardemil

Gustavo is the Managing Director & Founding Partner of Asesorias del Agro GCA Ltda, a niche consultancy firm specialized in Financial advisory, rural real estate, and services for the agricultural sector since 2015. Gustavo is a multidisciplinary professional, with more than 20 years of experience in agriculture and finance, with a vast knowledge in management, strategy, banking and rural financial risk assessment in Chile and Peru.

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