The Packer / December 23, 1996
By Larry Luxner
SEBACO, Nicaragua -- Entrepreneurs in Sebaco, about 70 miles north of Managua along the Pan-American Highway, are hoping their little town will become America's source of sweet onions when Georgia's Vidalias aren't in season.
Alejandro Mansell, marketing manager of Manprosa S.A., says he's very much encouraged by the recent election of Arnoldo Aleman as president of Nicaragua, and by the defeat of the Sandinistas who confiscated his father's rice and cotton farms in the 1980s.
But when politics has cooperated, the weather hasn't.
"We had a very bad winter, and storms earlier this year," said the businessman, noting that as a result, Manprosa shipped only 35 containerloads of Sebaco Sweets -- down from 100 the year before. This season, Manprosa expects to ship 75 to 120 containers, "so we're about where we were two years ago." Each container has 800 boxes of 50 pounds each; at $22 a box, that means revenues of between $1.3 million and $2.1 million this year.
"A few years ago, there were lots of companies in the onion deal, but now there are only two or three others," says Alejandro's brother, Fernando. From only 18% in 1993, Manprosa this year, he predicted, will account for 90% of Nicaragua's onion exports. The other 10% result from a small pilot project headed by APENN, Nicaragua's association of non-traditional exporters.
Manprosa is very much a family business. Marketing efforts are headed by Alejandro, 24, who studied at Western Maryland College, while Fernando, 29, who went to school in Monterrey, Mexico, is in charge of production. A third brother, Samuel, is the finance director, while sister Maria Eugenia is in charge of transportation and logistics. The company has 300 or so employees -- 240 of them full-time -- earning a minimum 17 córdobas (US$2.00) a day -- in the field.
Says Fernando: "We're trying to get a niche market. We have a gentlemen's agreement with Georgia onion producers that we won't sell any onions within 15 days of the beginning of their harvest."
Manprosa began cultivating sweet onions almost by accident in 1991, after it was approached by representatives of McDonald's, the fast-food giant. Apparently, the company was looking for a source of large onions for onion rings in January and February; during those months, all that was available were storage onions, which were too small. Manprosa agreed, and later saw potential at the U.S. consumer level.
Now, under an exclusive marketing deal with Georgia Vegetable Co. of Tifton, Manprosa receives 44¢ a pound for its sweet onions, which retail on U.S. supermarket shelves for 99¢ a pound. "Medium and large onions represent 40% of our production, but all that is for the local market," he said, adding that only jumbo and colossal sweets are shipped north.
Several factors make Nicaragua ideal for sweet-onion cultivation, among them perfect altitude, flat and inexpensive land, low-sulfur soil, and low rainfall which enables farmers to control the amount of water through drip irrigation. "Onions are sensitive to day length," says Doyle Smittle, a University of Georgia onion specialist in Tifton who is advising Nicaraguan farmers on onion cultivation. "In the U.S., sweet onions are harvested in April, May and June. But if you move closer to the equator, you have that day length all year. So it's possible to grow and harvest onions in the tropics any day of the year."
The problem is transportation. At the moment, since Nicaragua has no reliable port on the Atlantic coast, Manprosa must truck its onions to either Puerto Limón, Costa Rica, or Puerto Cortes, Honduras, for shipment to the U.S. East Coast. Not only are each of those ports 600 to 800 kilometers from Sebaco, they also give priority to Costa Rican and Honduran exports before those of neighboring countries.
"If Nicaragua had an Atlantic port, it would cost us at least $1 less per box," Alejandro said, estimating that between $10 and $15 of the $22 earned per box goes to transportation costs. "That's our one big disadvantage, a lack of port infrastructure."
Another disadvantage is the country's lack of cold-storage facilities. Earlier this year, the family started a side business, Suministros Mansell S.A., to address the cold-storage and distribution needs of Managua supermarkets and other retail outlets.