For FIT & ITALAGRO, it s very difficult to make predictions Joao Ortigao Costa CEO - SUGAL Portugal

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1 TOMATO INTERVIEW For FIT & ITALAGRO, it s very difficult to make predictions Joao Ortigao Costa CEO - SUGAL Portugal Tomatoland : Could you now pls. give us a quick presentation of SUGAL today for our members? Joao Ortigao : Sugal was founded in 1957 by my father and grandfather and hasn t stopped growing since then. Being located in one of the most important region for the production of first quality tomatoes all over the world, SUGAL to the quality of the raw material adds the knowledge of it s almost 50 years of experience in the processing area. Besides, on the past ten years we ve been renewing all our equipment using the most updated technologies. But most of all SUGAL has been keen on using severe quality controls procedures since the plantation in the fields, until every single step in the factory. To testify our effort we ve applied to the certification by the BRC and EFSIS, which we expect to obtain this year. Being in the field for almost half a century SUGAL attained a huge reputation thanks to the quality of its products, the diversification of its production and the service of its team, which I have the pleasure to be leading over the past years. Do you plan to make some changes for 2004 crop? This year, among other improuvements, we intend to install one more aseptic line. What is the processing capacity of fresh tomatoes SUGAL factory and what was your actual production these past 3 seasons? Nowadays SUGAL has capacity for processing MT of fresh tomatoes but the production average over the past three seasons was only MT, due to the bad weather conditions.

2 Have you already closed your contracts for 2004 what volume do you plan to process? Yes we did and we plan to process MT of fresh tomatoes. What is the price of fresh tomatoes in Portugal for the next crop ex-field and the average transport costs in Portugal? The average price is around 50 per metric ton ex-field and the average transport is 7 per metric ton. Did you already feel the impact of Italagro and Fit (subsidiaries of Parmalat / Boschi) possible troubles during the negotiations with the farmers? No. Italian sources inform Tomatoland that, despite Boschi problems, Italagro and FIT factories will run in 2004 but with reduced volumes; could you pls. comment such information? As far as I could understand until now both factories will run normally, but in cases like these it s very difficult to make predictions. Would such a reduction be positive for the main other Portuguese processors, namely IDAL (HEINZ group) and SUGAL? The total of fresh tomatoes contracted for this year in Portugal is around 20% more than last year so all factories are important. Do you know anything about plans by Boschi / Parmalat to sell off these 2 factories? If confirmed, would SUGAL be interested to run these production units? Until now I ve heard nothing in concrect regarding the plans for theese 2 factories. SUGAL is always looking for challenges and ways to devellop its business. Last crop, Portuguese Ops (growers organisations) delivered about MT. of fresh tomatoes to Spain; will this move continue and grow in 2004 according to you? Yes, the portuguese Ops have contracted more than MT of fresh tomatoes with Spain for the 2004 season, and this volume will necessarely increase as they need more and more quality in the tomato products and therefore they need portuguese raw material. Coming back to SUGAL, what part of your 2004 production should be aseptic paste? What other products do you manufacture? We are planning to produce 70% in aseptic and the remain 30% in food service packaging. Could you tell us your production in each products the past crop? We ve produced the same percentages as we expect to produce this year.

3 Where are you main selling markets? Do you expect to increase your sales in the new EU countries? We are selling mainly in the UE markets but we have as well other markets as the Japanese, Korean, Russian and the North America. Besides we are already working with the new UE markets. According to you, what is the current level of stocks at European tomato processors? There are no stocks and in some products stocks are even negative. Italian processors have reported delays in shipments of contracted goods; are you experiencing similar problems? No, all shipments are in schedule. Most processors worldwide complain about slow demands these past 3 months; do you confirm that trend and how do you explain it? After the crop the demand was wicker than the usual but since middle of January the demand levels recovered well and now we are sold out. What will be the level of unsold stocks in Europe at beginning of 2004 crop according to you? Well, if right now the stocks available are very limited I m sure that in July the unsold stocks will be nil or in some cases lesser than that. Do you fear an increased competition from Spain with 4 new players and an additional MT. of fresh tomatoes processed in 2004? No, because I expect them to be in the market to support the farmers and not only working to receive supports from the local governments. Could you tell us your opinion on next crop opening prices for the following items? Paste 28/30 aseptic :Cold Break: 640 per metric ton ex-works Paste 28/30 aseptic: Hot Break: 660 per metric ton ex-works Paste 36/38 aseptic : 790 per metric ton ex-works Pizza sauce 12/14 aseptic : 410 per metric ton ex-works Spiced pizza sauce 10/12 in 5 Kg. Can : 2,25 per tin ex-works What are the projects for the coming years at SUGAL?

4 In SUGAL we always look forward to improve in quality, technology and service. We ll continue improving the quality of our product being more and more demanding in our quality standards, we ll keep innovating in new products and increasing in quantity. Besides we are already working in new investments in technology to be able to increase capacity, improve the rentability of the plant and the yields of our production, among other projects in other areas. But mostly we expect to keep increasing our Service standards. In fact, We ve addopted a position of Customised service: we always work according to client s specifications, demands and needs. And that s the way we intend to continue in the market. We don t just sell tomato paste and pizza sauce We supply a service which includes a high quality tomato product produced to each customer (taillor made product), just in time delivery and personal attendance to the customers requirements. In other words our main target is our customers satisfaction & fidelisation. What is your opinion about the European tomato industry today; if possible detail by region? In my opinion the European tomato industry will always be the main supplier to the UE markets since these markets are usually very demanding in terms of quality and full trace ability of its products. For this European s Framers knowledge, experience and know how has a very important role in the success of the industry. What role do you expect SUGAL to play in this picture? SUGAL is located in one of the best region worldwide for the production of the tomatoes The richness of the soils in Ribatejo, the Mediterranean weather of our country and the proximity of the fields from the factory assure the quality, colour and freshness of our tomatoes. Besides being an agricultural region for centuries the farmers have a deep knowledge of the tomato culture. So SUGAL and the Portuguese producers as well as the others Portuguese industries will play a very important role in the future of the quality tomato processing industry. We have all learned about a possible venture between Cabanon from France and Chalkis from China; what is your opinion about such a marriage? In my opinion only proves the recognition of the higher standards of quality of European product.

5 More generally, what is your feeling about China and its possible competition in the European markets? When the prices of the raw material and the inland costs are so much lower than European s it ll be very difficult to compete in terms of prices, not in terms of quality. Learn more about SUGAL at - contact Mr. Ortigão Costa at info@sugal.com