Successful of Offshore Investment in Olive Oil

A unique investment opportunity exists in the production, distribution and sale of olive oil. Global demand is growing and the supply chain necessary to provide high quality oil in the world is being expanded and improved. There are a number of offshore investment opportunities related to this increased demand. We examine a concrete example of how an investor can become a part of profit and the response to the growing demand.

Olive oil

Olive oil is a staple of the Mediterranean diet and has been for thousands of years. It is used in many recipes and is popular on tables and in kitchens around the world and in the Mediterranean basin. His popularity grew and, more importantly, because of the healthy heart effects of the oil is becoming increasingly popular worldwide.

According to UNCTAD to the product page of the website on this oil, it refers exclusively to oil obtained from the fruit of the olive and excludes all other oils obtained using solvents or re-esterification. The term virgin oil only applies to the oil produced in a mechanical process and lower temperatures so as not to damage the oil. Refined petroleum products refers to the refined oil that has always "triglyceric" structure of olive oil. If something else is mixed with oil, it is not marketed as suchl. The latter is specifically different from many cooking oils that can list a number of possible ingredients such as palm, soybean, corn oil, etc.

This oil has a unique taste and is certainly the preferred cooking oil in Mediterranean style. Because of its unique structure, it is the preferred cooking oil for heart healthy diets.

Consumption of olive oil

The countries around the Mediterranean basin account for about 77% of consumption worldwide. However, this figure is changing. Because oil is an integral part of the Mediterranean diet, it has little room to grow. Because oil is just entering international markets, it has plenty of room to go. According to recent figures of the five largest consuming countries are:

Italy: 30%
Spain: 20%
Greece: 9%
U.S.: 8%
France: 4%

Countries that are not very high ranking on the list, such as Japan, have just taken the olive oil and are growing exponentially in consumption.

The production of olive oil

Olive oil is not only a historical product of the Mediterranean. About eighty five percent of olive oil is produced in countries bordering the Mediterranean Sea. Ninety percent of production comes from the six largest producers, Spain, Italy, Greece, Tunisia, Turkey, Syria and Morocco. Portugal came in 7th with 1% of production worldwide, even if it does not border the Atlantic Ocean (and Spain).

As consumption has increased over the years, it is extremely doubtful that these countries can cope with increasing demand. For example, reliable figures say that 60% of arable land in Greece is planted in olive orchards. It just is not much room to increase production on the north side of the Mediterranean.

Production and consumption have grown up together in the years 1970 to mid 1990 off the production when Virginia. However, demand for olive oil has continued to grow. Reliable figures and it is estimated that consumption of olive oil have doubled between 1990 and 2000 and tripled again in 2020.

The place where time is still "Mediterranean" and suitable soil conditions for the cultivation of olives is the North African coast of the Mediterranean. It is here that countries like Algeria and Morocco are catching up with Tunisia intends to become major producers of olive oil and Exporters. Algeria is promoting a massive project of tree planting olive provision of one million hectares (2.5 million acres) of land for orchards.

Investing in olive oil

olive oil investments are not always easy to take. The production is very fragmented with orchards belonging historically and trend on small properties by families for generations. Refining is more concentrated. For example, in Spain, in 1995, there were 80 refining companies, including cooperatives. In the major producers in the market is very competitive and there are usually significant barriers preventing the entry of newcomers.

Due to the expansion of olive production in the North African Mediterranean therein lies the opportunity to invest more. Countries like Algeria are friendly and encourage investment. Here's an example.

A specific investment

A Spanish company with an Algerian subsidiary invests in olive in Algeria. He plans to plant 1,500 hectares including 500 hectares (1,250 acres or about two square miles) will be opened to private investment.

The company will plant olive Arbequinia on this earth. The olive is maturing fast it starts to happen after three years. It is very tolerant to cold and drought, and most importantly for the investor, can be planted in a hyper-intensive culture. This means that the olive tree can be planted Arbequinia 1780 to one hectare. With this level of planting the Arbequinia produce about 11,000 pounds of small brown olives per hectare. Because this product uniformly olive weight 19% by volume of oil it will produce about 2,000 liters of oil per hectare. This is useful for investors as the return on investment after three years includes payment of $ 2 per liter of oil produced.

Because the company intends to export olive oil to build its own plant to ensure a fast and professional olive Arbequinia for export.

Considering the increasing demand for good olive oil quality and difficulty to invest in the Northern Mediterranean excellent opportunity can invest in a project such as this company on the south side of the Mediterranean.

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