Keith's Panamanian Travel Ramble

Mangos, Money and More! – Chapter 2

By Keith on Thursday, 17 March 2016

 

In early March 2015, I wrote about my first trip to the Simply Natural Mango Plantation in my blog, Keith’s Panamanian Travel Ramble.  (https://jkeithhowie.com/2015/03/02/mangos-money-and-more/). The plantation is just west of Penonome in Panama.  Today, just about a year later, I am going back to see what is happening with my investment in organic mangos.

It is late in the tropical dry season. The harsh sun and never-ending wind have transformed much of the lush green terrain to dusty dried out vegetation where growth struggles. This is typical of the conditions this time of year along the Inter-American Highway as we drive about three-hours west from Panama City. Our two busloads of existing and potential investors want to see this opportunity or, as in my case, see what has happened to it since last year.

One thing we are aware of is the tremendous growth and diversification of the plantation. Last year the property was about 525 hectares in size. Since that time, the total land encompassed by the plantation has grown to about 1,800 hectares making it the largest organic plantation in Panama. The largest organic plantation in Central America is only about 2,200 hectares. Other organic fruits are now part of the Simply Natural lineup. Now, instead of just Mangos, there are two varietals of Mango, Avocados, Limes, and Guava which are all organic. The development continues with the first Lady Victoria Mango investment property sold out but the remaining 1,800 hectares are in various stages of development with some planted, some building infrastructure, and some undergoing land clearing.

Last year Simply Natural was exploring the North American market for sales of the organic Lady Victoria Mango. These organic markets say that they can take all the existing product as well as any more production made available. The investment numbers are calculated based on the sale of fruit to the local Panamanian juice market. This is a worst case scenario, giving the smallest financial yield for the product. By selling the fruit into the organic North American market, returns would be improved substantially. It gets even better if some primary processing occurs at source before export. Freeze drying or dehydrating the fruit allows for premium pricing as well as a reduction in the shipping risk and the labor spike that would be experienced for the sale of fresh fruit.

 

Tours always include a stop at the fourth generation farming family’s beautiful ancestral home in Penonome, which operates as a restaurant.  Due to the timing of this trip, this is where we started.  The participants all were able to stretch their legs, visit with the hosts, and have a great lunch.

On our arrival at the plantation, we can see post nursery plants that have been in the ground for about 18 months. Last year these plants came up to your waist or so but now they are taller than most adults. They have also branched out substantially and are flowering.  Removal of flowers for the first three years forces energy redirection to the root system. If the flowers were left on the plant it would result in around 100 mangos for each plant. They also receive their first pruning which is to set up the structure of the tree.

There are about 45 trees per hectare as the mango trees are planted some 50 feet from their neighbor. Between the trees, various cash generating intercrops grow. What is grown for an intercrop varies depending on the location within the plantation. The criteria for intercrop choice includes the ability to give nitrogen to the soil to help the mango trees, and of course cash generation. The mango tree only requires water for the first two years after which its roots are deep enough to get their own water. From then on, irrigation only provides fertilizer. Intercrops are different and most need irrigation to survive the hot windy dry season. Irrigation was working throughout the property during our visit.

How many people does it take to run a plantation this size? Well, there are now about 50 full-time local workers. One of the most interesting jobs is that of the Ant Seeker. Two employees have the job of walking the property to find ant nests. When they find a nest they kill the queen to stop growth of the colony. The young trees at this stage are vulnerable to damage by leaf cutter ants.

Simply Natural is a respected employer in the local area and has little difficulty in getting workers when needed. They also practice giving back to the community by providing school buildings, houses for workers, and water as required.

There is a new nursery on site at the plantation. The old nursery provided many logistical difficulties due to its small size and remote location. Simply Natural operates four different nurseries. The current plantation has neem, mango, avocado, guava, and lime saplings, around 80,000 plants, which are growing in an automated nursery that has overhead sprinklers for delivering water and proper nutrition to the seedlings during their nursery stay. Grafted plants spend around 18 months in the nursery and are not moved to their end location until the graft has been successful. The nursery size will be doubled as many of the plants need more room.

Well, what is happening with my Simply Natural investment continues to impress me. I did not expect to see the growth or diversification that is in progress. The new nursery is an amazing size and it is full of rigorously growing well-tended plants. John Deere of Panama is now contracted to look after equipment maintenance.  They respond quickly and appropriately based on the size of the customer that Simply Natural has become. I have to admit that when I first chose to get involved with this project my Project Management background was heavily influenced by the on time and on/under budget completion of the various tasks on the timeline. Impressive performance!

There was one thing that I thought might fall between the cracks in such a project.  This was the investors lodge. This is a lodge built along the shore of the beautiful Rio Grande River, where investors can come to stay when they wanted to view their investment. Well, work was underway on the lodge with an estimated completion of about four months. I look forward to using it!