Through its wholly owned Chilean subsidiary and holding company, Limoneira Chile SpA, Limoneira’s investment netted it a 35% interest in Rosales. The Santa Paula-based firm will earn equity income as well as 50 cents per carton on lemon sales to Asia for a combined annual return of $200,000 to $300,000, according to the release.
Rosales, which primarily packs and sells lemons, ships into Asian, European and Chilean markets, according to a news release.
As part of the arrangement, Limoneira will now handle Rosales’ lemon sales to Asia.
Limoneira and the Rosales family have worked together for nearly 20 years on supply chain cooperation and more recently selling each other’s fruit, said Alex Teague, Limoneira senior vice president and chief operating officer.
“They have similar philosophies that we do,” he said.
Chile also is attractive because its high phytosanitary conditions enable exports to nearly the same countries that accept California lemons, Teague said.
Together with its holdings in California and Arizona, the Chilean investment should allow Limoneira to put together a worldwide network to supply year-round quality lemons, he said.
The domestic market in Chile also offers opportunities because of its hefty consumption, Teague said. The Chilean per-capita consumption of lemons is 12 pounds compared with only 3 pounds in the U.S.
With a population of about 17 million, the country consumes nearly 5 million cartons annually.
“They have a growing economy and more foodservice restaurants, so we fully expect lemon consumption to grow,” he said.
The Rosales facility’s location in La Serena, a major citrus- and avocado-growing region in northern coastal Chile, also should allow Limoneira to ship both domestically and to export, Teague said.
The Rosales deal comes on top of a recently announced acquisition of Marlin packinghouse in Yuma, Ariz., and the expansion of a packing facility in Santa Paula, which should be completed next fiscal year.