Re-Introducing US DDGS to Ecuador

Using MAP (Market Access Program) funds, the U.S. Grains Council has been trying to re-introduce U.S. Distillers Dried Grains into the Ecuadorian market for the past two years. Ecuador has imported small quantities (400 metric tons) of DDGS in the past but has not been a consistent buyer. The last large commercial shipments took place in 2006 when 2,400 metric tons of DDGS was imported however the importing company had a bad experience with the product and did not import more.

Two years ago, the Council started holding technical training seminars on nutrition and formulation in Ecuador. Technical issues that were addressed included current DDGS prices, logistics, product handling, storage, nutritional value of DDGS, and correct formulation. Based on this initial approach by the Council some industry executives showed interest in the product and requested the U.S. Grains Council for more information about product usage, correct formulation, prices, and best practices examples in Latin America.

In addition, nutritionists and purchasing managers from the two main importers (Pronaca and AFABA) were invited to participate in technical programs in Panama and the United States.

AFABA is Ecuador’s largest association of animal feed producers with more than 324 companies designated one of its more innovative and aggressive companies to represent it at the Council’s 2012 Export Exchange. As a result of this invitation, this executive was able to learn about DDGS from very different perspectives; he met U.S. farmers, visited with ethanol companies and met DDGS merchandisers. By learning about the whole production chain and meeting with DDGS end-users from around the world, he was able to overcome previous misconceptions on DDGS.

Upon returning to Ecuador, the AFABA representative was able use the information that he gathered during Export Exchange 2012 to convince AFABA’s executive board to purchase their first shipment of DDGS. At the end of November 2012, AFABA signed an agreement to purchase 3,314 metric tons of DDGS worth approximately $1.1 million. This purchase will be used for initial trials of DDGS with AFABA members in Ecuador in late December 2012 and early 2013.

As a result of AFABA’s purchase, another end user, GSIS bought 5,100 metric tons of DDGS, worth $1.8 million in the same shipment. So total sales were $2.9 million.

Over the past two years, the Council invested $19,300 (using MAP funding) in technical programs promoting DDGS to importers in Ecuador. As a result, over $2.9 million in export sales of DDGS were generated with an ROI of $150 per MAP $1 invested.

An assessment of the Ecuadorian feed sector has determined that this sector, alone could import 250,000 metric tons of DDGS annually. The U.S. Grains Council is continuing to work to expand DDGS demand in Ecuador and to capture more of this untapped market potential.