"It is the world's largest industrial citrus company, and it explains why the Argentine macroeconomic context is 'very good' for the business."
Manuel Suárez Altuna became the CEO of San Miguel in January. The company, owned by the Miguens Bemberg and Otero Monsegur families, aims to expand its global lemon processing share to 20% in two years. This week, it will launch a new bond and has already received offers from international financiers. The plans.
El Cronista Comercial, May 12, 2025
More than three years have passed since the citrus company San Miguel transformed its business model, abandoning fresh fruit sales to focus exclusively on lemon processing. Today, with three plants in three different countries, the company has achieved positive results and will turn to the capital markets to grow further, driven by the rising global demand for natural foods.
The company’s new CEO, Manuel Suárez Altuna, took over the role at the beginning of the year, replacing Pablo Plá. However, he was part of the company’s transformation process ever since the owners, the Otero Monsegur and Miguens Bemberg families, decided to change the company’s direction.
Currently, with the local macroeconomic stability and improved financing options, San Miguel is focusing on production efficiency, both industrial and agricultural, ensuring even better returns in the short term. In fact, it has already received visits from global financial institutions to finance future projects.
After San Miguel’s strategic shift, what are the next steps?
We decided to exit the fresh fruit business to focus on producing natural ingredients. When processing lemons, three products are created for the food and beverage industry: essential oil, concentrated juice, and dehydrated peel. San Miguel is the world’s number one processor in this sector, as we process 380,000 tons across our three origins (Uruguay, Argentina, and South Africa), controlling 16% of the global market share. In the next two years, we project to reach a 20% share of the global market. This will happen when our Uruguay and South Africa plants, both opened in 2023, reach maturity. By then, we plan to process 450,000 tons of fruit.
Have you already seen results from the shift?
It was a very ambitious project because it involved building two plants in 18 months. The construction was done simultaneously, and we had to manage the entire 2023 period at the same time. But, even in that year, we saw a significant improvement in our results. We had come from a major loss in 2022, mainly due to the fall in global lemon prices from our fresh fruit business. However, we also had many restructuring costs. In 2023, we achieved a positive EBITDA of US$1 million, which turned into US$9 million in 2024.
How does the business work in Argentina?
Locally, in recent months, we’ve experienced better lemon market prices, which are recovering after several years of depressed values. While we won’t see the results in 2025, we already notice a considerable trend shift that will be clearer next year. Additionally, we believe that the recent economic measures by the government, such as the removal of currency controls, have benefited us as exporters. Even before, decisions like eliminating the PAIS tax have made operations easier, especially for importing inputs and machinery, as it allowed us to negotiate better payment terms with suppliers. We believe the current macroeconomic context in Argentina is very favorable for a company like ours.
In what way?
Since the last quarter of last year, we’ve started receiving visits that reminded me of the convertibility era when different international banks began to appear because they foresaw conditions for easy capital inflows and outflows, as well as higher profitability. This is already happening, and we are evaluating long-term financing structures with a focus on 2026 and 2027. I think it’s a combination of Argentina being highly observed internationally, and San Miguel being at a moment where we can concretely demonstrate that the redirection is producing results.
And what about Uruguay and South Africa?
The Uruguay and South Africa projects are designed to reach maturity in two years, as the plants are supplied by lemon plantations that are not yet in full production and take between six and seven years to reach their maximum potential.
How is the fruit supply?
In Uruguay, 100% of the lemons are from our own production, while in South Africa, they come from long-term contracts with local producers. This year, we plan to process 72,000 tons of lemons in Uruguay, compared to 60,000 last year, and in South Africa, we plan to process 62,000, up from 39,000 last year. We see our business projections growing as our fruit processing volume within the plants grows. These projects have low volatility because we work with long-term contracts. We want to guarantee our fruit supply so that we can also deliver our products on time. So, simply due to the maturity of both projects in the plants, we anticipate strong growth with low volatility.
Are there new projects in the works?
We are well known for our ability to develop new products. So, we are always looking for new alternatives in lemon processing. Currently, we are analyzing two or three products different from what we already process, which could potentially become an additional income stream to what we have today from lemon derivatives.
This year, San Miguel changed its CEO and president. How was the internal transition?
In practice, there was no change in management. Because of how the company is organized, the CEO reports to an executive committee made up of four shareholders—two from the Otero Monsegur family and two from the Miguens Bemberg family. So, the CEO reports to the entire committee. But, by agreement between the families, the company’s presidency alternates every three years.
How is the relationship with the shareholders?
They are very involved in the company. In fact, they supported the company’s restructuring and even subscribed to capital last year. We did a follow-on for almost US$68 million, of which US$46 million came from the controlling group. So, they not only agree with the company’s direction, but also contribute their own capital. Moreover, at the last shareholders' meeting in April this year, a second follow-on for the second half of 2025 was approved. This will mostly be used to strengthen the company’s capital structure. Additionally, we plan to issue a negotiable bond this Wednesday, May 14. The goal is to improve the debt maturity profile, and we hope to raise between US$10 million and US$15 million.
What is the biggest complication for the business today?
Our operation is outdoors, and a common challenge is weather conditions. However, with three origins, if there is a severe frost in Argentina, we can supply the same customer from the other two plants. So, today, the biggest challenge is operational. It’s about ensuring that the factories are efficient and able to meet the business's needs.
And what about the exchange rate?
Undoubtedly, it impacts us like other variables. However, we don’t spend much time discussing it because it’s a variable we can’t control. Instead, we focus on cost efficiency, maximizing our income, and improving field productivity. These are things we can control. Nevertheless, as an exporting business, the exchange rate gap did impact our results. The good news is that, with revenue, the result improved, offsetting Argentina's loss of competitiveness due to costs.
What is required to make the decision to leave a commodity business and move into a value-added one?
You need favorable conditions to develop this type of investment. So, at a minimum, macroeconomic stability, low interest rates to access credit and make capital investments, cost competitiveness, and commercial access. In our case, the industrial business has always been less volatile than fresh fruit. The latter has some very good cycles and many very bad ones. The redirection made sense to us when we saw the opportunity to close long-term agreements. Thanks to that, we were able to redirect our investments into the industrial business.
