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What is going on in the world of the oil processing plants? The trends in the crisis era

While the big producers want bigger olive presses for shorter seasons, the small ones prefer small plants to face the market that tends to strong price reductions

The crisis of the olive oil sector is not just affecting the producers but it also affects the needs and the dynamics of the entire chain. We are now in a phase of continuous change of the field and the economic strategies of many countries in the next years will strongly affect the equilibriums and the leadership of the world oil production. We asked an opinion about the last trends of the international market to the managers of three important companies that produce oil plants.

LUCIO CAVAZZOLI, marketing manager, Pieralisi

Given the crisis of the olive oil prices, how did the behavior of possible olive presses buyers changed?
The effects of this crisis are very diverse: the small buyers, i.e. small in terms of market shares and marketing investments, will have very strong problems in the near future, while big producers will be hardly affected by the crisis.

Are you referring to the producers that applied the most modern strategies?
I’m speaking about the producers that embraced the philosophy of quality and hence that chose innovative olive presses to differentiate from the others. I.e. the producers that are at the state of art.

Which are the general trends in olive pressing?
We, press producers, can see every year the trend to anticipate the harvesting. But, at the same time, the season is every year shorter: once the harvesting was done in three months, while now is everything done in 50 days. We are then facing the problem to process the same amount of product in a shorter time. This is the reason why the oil producers look for bigger and higher performance presses.

Can you feel the effects of the crisis?
Yes, we can, a lot. The unbottled olive oil is now under the two euro per liter, a price that makes the harvesting not economical in many countries. Italy is one of these. Our olive presses are competing with countries like Morocco, Turkey or Syria, which have low cost workforce and last generation plants. Who is not producing very high quality oil will crash because of the competition with these producers.

Which are the most promising countries in the next future?
For sure the most promising countries are the Maghreb ones, apart from Algeria were there are still very strong problems in the bureaucracy and in the bank system. I’m thinking, in particular, to Morocco. But there are also other countries that made very good politics, such as Croatia, where olive culturing made in the last years great steeps forward, producing very high quality oils.

GIACOMO COSTAGLI, abroad sales manager, Alfa Laval

Given the crisis of the olive oil prices, how did the behavior of your clients changed?
For sure we saw a strong reduction in investments. Usually clients prefer to improve an existing plant, e.g. by changing a decanter or by buying a new extractor, instead of buying a new press. This lead to an increase in the second-hand market, typical of the crisis times.

Did you reduce your market?
Even if we felt a reduction of our traditional market, there are new projects around the world, given the increase of the olive tree plantation. These are project that, besides frequently retarded by the crisis, are still going on. There was instead a strong reduction of the new projects, in particular for small producers.
Moreover, in the Maghreb and Middle East countries, where the crisis seems still far, there are new economic lines. This means that producers came to terms with the new olive oil prices.

Which are the most common requests?
We receive the most of our requests from big olive presses, even if the willingness to pay is less and less. In this field we’d need a completely new type of plant, able to completely change the market dynamics.

Hence, there is the trend of using big plants to process quickly the season olives.
Yes, this is happening both in Italy and in the other countries. I’m thinking to Morocco, Chile or Tunisia: with super intensive olive culturing they require huge plants to process quickly the olives in order to get a high quality product with small costs.

Which are the most promising countries in the next years?
Morocco, Turkey and Syria will change the market in the near future.

GIORGIO MORI, owner of Toscana Enologica Mori

Did you notice any change in the behavior of your clients?
For sure there were many changes. I noticed that many clients began to create their own labels in order to get something more on the price. Hence, there was a growing interest toward company olive presses, below the five quintals per hour, for companies that produce less than 200 quintals of oil.
For the bigger producers the market is a bit more blocked.

What does your typical client want? Technology?
Technology, for sure. Who wants high quality productions needs technology; this especially holds for young people.

Do you think that some countries feel the crisis more?
Yes, of course. The crisis is stronger in the countries were the production is very high. The countries that just entered the olive oil business will feel this crisis in some years from now. I’m thinking for example to France where, after years of constant grow, now the market is facing the problem of a price decrease. A decrease that will for sure keep going on…

by Duccio Morozzo della Rocca
06 september 2010, Technical Area > Olive & Oil