Leveraging AGC’s Support for Export-Led Growth in Colombia’s Dairy Sector
When thinking of the world’s most known varieties of cheeses, regions such as Italy or France might come to mind. However, Latin America has a thriving cheesemaking industry driven by the combination of favorable production conditions and a cattle ranching sector that supports the income of many families. In Colombia, the production and marketing of dairy products has emerged as a significant driver of economic growth, showcasing the potential of small businesses in the sector. From innovative products like chocolate Santafereño to local dairy suppliers partnering with small businesses, the spectrum of opportunity present within this industry is vast.
Since 2012, Pais Emprendedor has operated with the goal of providing valuable nutritional dairy products to communities in Colombia while strengthening their export alliances through their product offerings. Named after owner Jaime Valesquez’s dream, their brand, River Cheese , is bridging a relationship between their farmers and end customers to their natural cheese. During Q4 of 2023, AGC’s Co-CEO Sudha Bharadia conducted a visit alongside our investors to the Pais Emprendedor River Cheese facility in Caquetá, Colombia. Learning how the small business has experienced growth with the support of our partner provided insight into their ambitions for further expansion beyond Colombia.
As a family company, Pais Emprendedor began with just five employees in 2012 and managed to reach 120 employees during COVID-19. While many businesses struggled with this type of growth during this time, their company beat the odds and avoided employee turnover. However, despite this remarkable stability, the company faced a common challenge that plagues even small, thriving businesses: cash flow constraints. Catalina, co-owner of Pais Emprendedor, describes AGC’s partner as the company’s alternative source for growth. “When you want to grow, you need help,” she explains. “You need some other element that gives you a path. So, the advice is amazing, and we have found a helping hand in how to focus our growth and organize.” AGC’s partner specializes in providing financing options to small businesses that are underserved by traditional banking systems in Colombia.
You need some other element that gives you a path. So, the advice is amazing, and we have found a helping hand in how to focus our growth and organize.
– Catalina Velasquez.
“We have 400 milk suppliers and our time to pay [them] is 15 days,” Catalina explains. Because of the competition surrounding Pais Emprendedor, this makes paying their suppliers on time critical and often positions them as their suppliers’ only source of income. Their suppliers are more than just links in the chain; they’re small families, including women, who own cattle and partner closely with River Cheese. By being able to pay on time, Pais Emprendedor maintains an organized relationship with suppliers, which ultimately strengthens their strategy to expand their export ambitions.
“Caquetá is very good in terms of weather. It’s raining all the time. So, we don’t have a lack of grass for the cows, which means that we have milk all year when other areas of the country don’t,” says Catalina, sharing the advantages that make production of their cheese products possible. The accessibility of infrastructure does create competition among the small businesses and informal milk suppliers, but it is not uncommon for many families and individuals in the local area to own cattle and supply dairy to buyers. The World Bank states that cattle ranching in Colombia supports the livelihoods of over half a million families, ensuring a substantial dairy supply. With the sector occupying 80% of the country’s agricultural land, prioritizing product quality and streamlining procurement are crucial for building a resilient and reliable supply network. [1]
Our 2023 Impact Report examines the result of financing over 13,000 SMEs, and how this mission has benefited over 400,000 suppliers – ultimately strengthening local infrastructure. By supporting these SMEs, AGC reinforces its mission to drive meaningful impact through local businesses, benefiting employees and their families and creating the ripple effect that represents what social impact means to AGC. “We’re very conscious in our office that if Pais Emprendedor wants to grow, we need to understand that they need to pay suppliers earlier than 15 days. When they send their invoice to us, it won’t take more than 24 hours to deposit money to their accounts,” AGC’s partner adds. Since the inception of River Cheese’s relationship with AGC’s partner, the small business has been able to reduce their “unwanted” financial debt as well as reaching positive profit figures due to turnover collection and efficiencies delivered by our partner’s services. This was reflected in the results of their financials in June 2024.
To continue their growth, Pais Emprendedor is driven to elevate their brand from commodity cheese to specialty cheese and create a diverse range of products for export. While they have confidence in their exceptional products, they also recognize the need to optimize their productivity to meet stringent export requirements and know AGC’s partner will be vital to these plans. Although they’ve conceptualized innovative products, testing them in the local market can be a challenge with consumer unfamiliarity and price sensitivity. Having well-managed machinery, talented employees, and creative ideas in place, Pais Emprendedor is motivated to expand its horizons while remaining committed to preserving their family-owned legacy.
1 World Bank Group. Building Pathways to Sustainable Cattle Ranching in Colombia. Accessed Sept. 16, 2024.
https://documents1.worldbank.org/curated/en/653941623047310683/pdf/Building-Pathways-to-Sustainable-Cattle-Ranching-in-Colombia-Why-a
nd-How-Private-Sector-Should-Engage-and-Support-the-Sustainable-Transformation-of-Cattle-Production-in-Colombia.pdf
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