Global orange production reached approximately 45.9 million tonnes in 2023/24, demonstrating notable volatility over the past five years. The industry expanded from 46.1 million tonnes (2019/20) to a peak of 50.3 million tonnes (2021/22), before contracting due to adverse climate conditions and disease pressures. Brazil leads global production with 29% market share in 2024/25, followed by China (17%) and the European Union (13%). However, Brazil's production predominantly serves the juice industry, resulting in minimal fresh orange exports despite its production dominance.

Global consumption of fresh oranges has remained stable at 29-31 million tonnes annually, indicating solid and consistent demand across international markets. This stability provides a reliable foundation for export planning and volume forecasting.

To minimize transit time and preserve fruit quality, the strategic plan focuses on East Coast ports serving Florida and Northeastern U.S. markets with transit times of 2-3 weeks. During transport, cold treatment can be performed in containers – maintaining temperatures around 1-2°C for a specified period – as a phytosanitary measure to eliminate pests (primarily fruit flies) before arrival.

To access the U.S. market, Grupo Chioderollis must work with phytosanitary authorities (MAPA/DSV in Brazil and APHIS in the U.S.) to implement a Risk Mitigation System. This includes registration and monitoring of orchards destined for export with regular inspections, pre-shipment treatment through cold treatment during voyage following APHIS protocol, International Phytosanitary Certification with each shipment accompanied by MAPA-issued certificate indicating compliance with U.S.-negotiated specific requirements, and arrival inspection where shipments undergo inspection at U.S. ports with any detection of quarantine pests potentially leading to rejection, necessitating extremely rigorous origin control.

U.S. import tariffs for fresh oranges (HS code 080510) are relatively low on an MFN basis: $0.019/kg (1.9 cents per kilogram), representing approximately 1.5% of average fruit value (considering price ~$1.20/kg CIF) – therefore minimal tariff impact. However, competitive differences exist: Mexico enjoys zero tariff under USMCA, Chile has zero tariff via U.S.-Chile FTA, South Africa has access under AGOA (African Growth and Opportunity Act), potentially exempting or reducing tariffs within quotas, while Brazil, without a specific agreement, incurs standard MFN tariff (1.9c/kg).

Given the low tariff and focus on premium fresh product, price competitiveness will depend far more on logistics efficiency and productivity than tariffs. Medium-term, Grupo Chioderollis may consider advocating through sector entities for citrus inclusion in Mercosur-U.S. agreements or pursuing sanitary equivalencies to facilitate trade flows.

Viability calculations include international freight, insurance, and port handling costs. A 40-foot refrigerated container accommodates approximately 25 tonnes of oranges (roughly 600 boxes of 40.8 kg each). Maritime freight quotes for this route fluctuate; for planning purposes, we estimate $4,000-6,000 per container (post-pandemic normalized value), equivalent to $160-240/tonne ($800-1,200/tonne) for ocean freight alone.

Additionally, inland transportation costs (trucking to port ~$200/tonne), customs clearance, port fees, and inspections apply. At destination, the importer handles domestic distribution. Efficient refrigerated logistics and minimal handling are crucial for maintaining fruit quality and avoiding losses – maximum loss expectation is <5% of volume from damage, assuming proper harvest and post-harvest practices.

To evaluate economic viability, a comprehensive financial model was developed for the export project. Below are the key components of costs, revenues, and profitability indicators that demonstrate the robust economic foundation of this initiative.

To enable export operations, investments in infrastructure and working capital are necessary. Primary CAPEX items include packing house adaptation with selection line and cold storage (estimated R$3 million), certifications and training (R$0.5M), acquisition of boxes/pallets and materials (R$0.5M), traceability systems (R$0.2M), plus potential orchard expansions or producer partnerships (could be via contracts, minimizing own agricultural CAPEX). Including contingencies, estimated Initial Fixed Investment is ~R$5 million (approximately US$1 million).

Additionally, working capital is required to finance harvest, temporary storage, and the export cycle (especially since payment from importer may occur 30-60 days after shipment). We anticipate working capital need equivalent to ~60 days of peak sales (around R$2 million). Part of this working capital can be met via ACC (Advance on Foreign Exchange Contract) – export financing lines. Thus, total investment (CAPEX + working capital) to be raised would be approximately R$7 million.

In the agricultural commodities sector, CAC (Customer Acquisition Cost) translates to commercial expenses to win and maintain foreign buyers (distributors/importers). This includes prospecting trips, samples sent, trade show participation (e.g., PMA Fresh Summit), commercial commissions, and product adaptation to specific requirements. We estimate average CAC of US$5,000 per initial customer. Assuming focus on 3 primary importers in the target market, we would have approximately US$15,000 (R$75,000) in commercial activities in the first year to establish customer base. This value is small relative to business volume but important for ensuring market penetration. In subsequent years, per-customer CAC tends to drop dramatically, concentrating on relationship maintenance.

Break-even calculations show: (a) Volume break-even – quantity of boxes exported annually to cover total costs equals approximately 30,000 boxes/year (about 1,225 tonnes/year), equivalent to only 50 containers/year – a relatively low threshold, meaning at scale the business quickly surpasses break-even. (b) Payback – by projected cash flows, the initial R$7M investment would be recovered around end of Year 3 of operation, considered highly attractive for an agricultural/industrial project.

From Year 2 onwards, positive and growing EBITDA is expected. Projected EBITDA margin starts at ~15% of revenue in Year 1, rises to approximately 18% in Year 2, and stabilizes at 20-22% from Year 3 onwards (when initial fixed costs are diluted and scale/logistics gains realized). In absolute terms, this would mean annual EBITDA of approximately R$2 million in Year 2 (with revenue ~R$11M) reaching R$5-6 million in Year 5 (with revenue ~R$30M). Considering a 5-year horizon and residual business value (continuation after Year 5) equivalent to 5x Year 5 EBITDA, project IRR was calculated at approximately 25% p.a. for investors. Even under conservative scenarios (prices 10% lower or costs 10% higher), IRR would maintain 18-20% range, above average Brazilian capital cost.

Based on the costs and assumptions outlined above, performance projections were developed for the first five years of orange export operations. These projections demonstrate a compelling growth trajectory with strong profitability metrics that justify investor confidence in this strategic initiative.

These projections start from prudent assumptions (prices maintained constant in US$, not assuming real increases, and costs rising only by inflation). Even so, they present significant year-on-year growth. Sensitivity analysis shows that if selling price rises 5% annually (optimistic scenario, given potential food inflation), revenues and profits would be even higher. Conversely, unfavorable exchange rates or smaller harvests could reduce results – manageable risks via partial currency hedging and agricultural insurance.

To ensure project success, an implementation and expansion roadmap was developed for the first five years, with clear phases, milestones, and targets that provide strategic guidance while allowing flexibility for market-driven adjustments.