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TRADE LOGISTICS CONFERENCE 2010

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• Company Overview

• Logistics

• Food Safety

• Costs of freight and customs

• Key Issues & Challenges

3COMPANY OVERVIEW

• Kaliroy Produce is an exclusive distributor for:

Agricola La Primavera S.A. de C.V.

Bioparques de Occidente S.A. de C.V.

• We are a fully integrated organization, from growing to marketing.

• Total Production acres managed by the company are more than 1,000 (440 Hectares ).

Acres Has

Open Field 375 150

Green-House 725 290

JALISCO TO NOGALES 1,822 KMS, AVERAGE TIME 19:00 HRS

SINALOA TO NOGALES 973 KMS, AVERAGE TIME 9:30 HRS

JALISCO TO McALLEN 1,270 KMS, AVERAGE TIME 13:00 HRS

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DISTRIBUTION

CULIACAN

SAN GABRIEL

GR

OW

ING

AR

EA

S McAllen, TX

Nogales, AZCOMPANY OVERVIEW

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Operations

COMPANY OVERVIEW

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PRODUCT PACKAGE PRESENTATIONS

TOMATOES

PRODUCT PACKING

Roma 25 Lbs., clams

Vine Ripe 2 Layer/25 Lbs., RPC

HH Beefsteak 15 Lbs, 5lbs, clams

Grape Volume-fill, clams

TRUCKLOAD MAP ON PACKAGES SHIPPED

25 LBS = TRUCK LOAD WITH 1920 BOXES

2 LAYER = TRUCK LOAD WITH 2112 BOXES

1 LAYER = TRUCK LOAD WITH 2400 BOXES

LOGISTICS

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NEVER SPENT MORE THAN 2 HOURS ON INSPECTIONS

INSPECTIONS NEVER ARE LESS THAN 4 HOURS, COULD BE 8 HOURS

LOGISTICS

INSPECTIONS AT THE BORDER

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MEXICAN CUSTOMS

KEY POINTS:

MAYMAR FACILITY INSIDE THE FISCAL CORRIDOR GOOD TIME INSPECTIONS

MEXICAN CUSTOMS

LOGISTICS

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Source:

LOGISTICS

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Mission

“Detect and prevent terrorists and terrorist weapons from entering the United States, while facilitating the

orderly and efficient flow of legitimate trade and people at and through our

Nation’s borders”.

FOODSAFETY

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Committed with our product and people Security,

since October, 2009 we are a C-TPAT Certified

and Validated Company.

It means hard work and costs, however, the

benefits we received are better. The Company

invested around of $200,000 on C-TPAT Program

implementation.

- Wal-Mart Program- Fast Lane- Tranquility- Possibility of better trade relations

FOODSAFETY

12FOOD

SAFETY

• One of our most important concerns is to provide our customers with safe and quality products.

• Our operations have an excellent & reliable Food Safety Program.

Our companies are certified for:

GMP (Good Manufacturing Practices) GAP (Good Agricultural Practices) HACCP Mexico Calidad Suprema SENASICA

www.primuslabs.com/kaliroy/index.asphttp://www.senasica.gob.mx/http://www.mexicocalidadsuprema.com.mx/organismos.php

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PRODUCTION

COSTS

FREIGHT FROM JALISCO $2,500 USD

FREIGHT FROM SINALOA $1,500 USD

USD FIGURES 2008 2009 2010 TOTAL

FREIGHT 5,552,356 5,755,037 5,957,496 17,264,889

AMERICAN CUSTOM 243,161 246,957 296,184 786,303

MEXICAN CUSTOM 207,792 223,250 245,384 676,426

MAYMAR 191,133 188,391 202,675 582,200

DUMPING 53,618 46,263 41,040 140,921

SEALS 11,584 11,418 12,283 35,285

TOTAL 6,259,644 6,471,316 6,755,063 19,486,023

2008 2009 2010 TOTAL

EXPORT BOXES PACKED 5,791,910 5,708,832 6,141,680 17,642,422

DOMESTIC BOXES PACKED 1,762,316 1,794,390 1,896,014 5,452,720

EXPORT TRUCK LOADS 2,896 2,854 3,071 8,821

COSTS

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WAL-MART OPPORTUNITY

• Since 2007 Wal-Mart developed a program to buy

directly from the growers.

• We deliver our product directly to Wal-Mart’s Distribution Centers at Los Lunas, NM. and Casa Grande, AZ.

• We also deliver at Nogales, AZ to SunFed whichdistributes to more Wal-Mart’s Distribution Centers.

• We sell our product to others Wal-Mart’s directsuppliers. (Brokers)

CHALLENGES

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KEY ISSUES & CHALLENGES

• Keep and Improve all Certifications

• Increases on Diesel affects us directly (Freight Cost)

• Military check point @ Benjamin Hill, inspection lasts 4 to 8 hours

• CTPAT compliance with ALL business partners

• New technology @ Nogales border CBP to expedite the inspection processes

• Maintain and improve all food safety initiatives (Culture)

• Improve OTD (On Time Delivery)

CHALLENGES