Competitive strategies applied to agribusiness in South-Eastern Paran, Brazil

Abstract

Agriculture plays a key role in the economy and quality of life. How to best employ available resources in order to improve productivity, profitability and sustainability of these processes has been the subject of many studies. This study aims to analyse by multi-index methodology the expected return and risks associated with investment in agribusiness, particularly on what concerns the implantation viability of a vegetable-washing machine. It thus listed the production and maintenance costs of carrot and cucumber cultures, as well as cleaning costs and the profitability and inherent risks of the implementation. Having in mind that this research requires empirical and analytical evidences as well as a case study, a company located in South-eastern Brazil was chosen by means of an applied research. Data from a Minimum Acceptable Rate of Return (MARR) of 6% per year was collected by documental research and semi-structured interviews systematized in a cash flow projected within the respective deadlines. Results indicate an Additional Return Over the Investment (AROI, 16.06%) higher than the MARR for carrots and 14.94% higher for cucumbers. These results show that when a competitive strategy of vegetable cleaning through a machine is employed, with expectation for return in 24 months, the impacts are positive, signalling high profitability and compatible risks with the expected return, reinforcing the soundness of such an investment in agribusiness.