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Cablegate: Amembassy Brasilia Nominates Sambazon for the Secretary's

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PP RUEHRG
DE RUEHBR #1192/01 1651840
ZNR UUUUU ZZH
P 141840Z JUN 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5772
INFO RUEHSO/AMCONSUL SAO PAULO 7198
RUEHRI/AMCONSUL RIO DE JANEIRO 2281
RUEHRG/AMCONSUL RECIFE 4967

UNCLAS SECTION 01 OF 02 BRASILIA 001192

SIPDIS

EB/CBA FOR SMITH-NISSLEY

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON BEXP ELAB ETRD SENV BR
SUBJECT: AMEMBASSY BRASILIA NOMINATES SAMBAZON FOR THE SECRETARY'S
CORPORATE EXCELLENCE AWARD (SME CATEGORY)


1. (U) Based upon its innovative approach to development and
export, Charge d'Affaires nominates the U.S. small/medium-sized firm
SAMBAZON for the Secretary's 2006 Corporate Excellence Award.

2. (U) Begin Text of Award Nomination

Established in 2000, SAMBAZON (short for Saving and Managing the
Brazil Amazon) is a small San Clemente-based firm which pioneered
the export of Acai fruit - an anti-oxidant palm berry that grows
wild in the Brazilian Amazon - to the United States. Since it began
operations, SAMBAZON has set the standard for promoting sustainable
development of the Amazon rainforest while improving the economic
condition of the local indigenous people. Its business model not
only seeks profit for investors, but explicitly pursues the goal of
promoting sustainable land use in the Amazon estuary. Not content
to rest on its laurels, SAMBAZON has opened an industrial processing
facility in the rural state of Amapa which will expand ten-fold the
amount of Amazon acreage which will benefit from the company's
environment-friendly agroforestry practices.

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-- Responsible Environmental Stewardship and Practices.

The Amazon is disappearing at an alarming rate, with estimates
ranging from 1.9 million to 2.6 million hectares per year. To stem
the tide, Brazilian policymakers have instituted conservation
programs, are banking on agroforestry - sustainable
commercialization of native crops - to create incentives for better
habitat management. Knowing that local residents must be part of
the solution, the Brazilian government has sought to give them an
economic stake in the preservation of the forest so that they help
ensure that illegal loggers and other claim jumpers do not menace
that environment. Grown in the Amazon's flooded forest region, Acai
(pronounced Ah-sigh-EE) is a marquee agroforestry crop because it
comes from the one of the few native forest palm trees that is
renewable. Since neither the harvest of Acai fruit nor heart of
palm kills the tree - unlike other palms which die when the heart of
palm is extracted - the plant can play an important role in
sustaining riverside communities

A key player in the Acai sector, SAMBAZON was the first company to
export Acai to the U.S. and is responsible for 70% of the pureed
fruit that is sent to this market. In an August 4, 2004 article on
SAMBAZON, the New York Times noted that because of the company's
practice of offering guaranteed contracts to growers, hundreds of
families were able for the first time to lock in a price for the
bulk of their crop prior to harvest. As a result, instead of being
compelled to turn to environmentally destructives activities such as
logging, cattle, or monoculture or being forced to abandon their
communities in search of elusive employment in Brazil's overcrowded
cities, rural residents were able to remain in the area and make
their livelihood from Acai. In 2005, SAMBAZON's purchases of Acai
supported over 960 grower families who worked over more than 66,000
acres within the Amazon estuary.


-- Development of Competitive and Innovative Activities with
Measurable Results

Unlike the customary practice in the Amazon, SAMBAZON shuns
middlemen and works directly with the indigenous growers tied to
four community cooperatives. The cooperatives sell to SAMBAZON
which then sells directly to U.S. clients. In contrast, in the
traditional Acai trade, growers sell to middlemen who in turn sell
to the local market - which then passes on the product to outsourced
manufacturers, brokers, and finally the ultimate client. Since
SAMBAZON's concept eliminates three steps in this process, it can
afford to pay growers a premium above the prices offered by the
middlemen. Between 2003 and 2005, as SAMBAZON began to ramp up its
supply chain, it paid an average premium 18% to 58% above the prices
paid by the middlemen. This premium has increased the
sustainability of grower communities by raising family income, and
has enabled the cooperatives to provide skill-building and technical
assistance to support forest management. Indeed, SAMBAZON, through
a contract with a Brazilian NGO, has provided training workshops for
1541 growers while grooming 56 youths to serve as technical advisors
in organic certification and crop management. Given the tangible
benefits offered by SAMBAZON's model, families have rushed to join
the cooperatives, thus strengthening the agroforestry constituency.


For its part, SAMBAZON, which has invested US$5 million in Brazil,
earned US$5.5 million in profits in 2005 and expects to clear
approximately US$12.5 million in 2006. Between 2002 and 2005, it
purchased 5,402 tons of fruit. SAMBAZON Acai is now carried by
thousands of grocery stores and juice bars across the United States,
including such retail chains as the Whole Foods Market, Wild Oats,

BRASILIA 00001192 002 OF 002


and Trader Joe's. In addition, SAMBAZON's success can pave the way
for the introduction of other exotic Amazon fruit into the U.S.
market -- products which like Acai would have no domestic U.S.
competitor -- such as Cupuacu (Coo-poo-A-su), Graviola, and
Taperaba.


-- Overall Growth and Development of the Local Economy.

SAMBAZON's enlightened policies directly benefit poor communities in
dire need. By providing subsistence farmers with a secure market
for a cash crop, the firm contributes greatly to the income security
of the local indigenous people. Growers are able to use their Acai
resources to generate over 80 percent of their annual income while
maintaining their traditional trade of forest products (shrimp,
fish, cassava, etc.) to rural markets. And because of the
company's premium, family members of the growers that work with
SAMBAZON earn 48% above the regional wage.

To ensure that the community's interests are protected, the company
has had its operations Fair Trade Certified by both the Fair Trade
Federation, with a local NGO serving as a third-party auditor. In
addition, SAMBAZON has helped its grower partners garner affordable
financing by bringing in the Cambridge, Massachusetts-based
micro-credit provider EcoLogic Enterprise Ventures (which in turn
receives funding from the J.P. Morgan Chase Foundation). In
recognition of its efforts, SAMBAZON has received the Ashoka Award
for Market-based solutions for Low-Income communities.

Finally, using OPIC financing, SAMBAZON has opened a processing
plant in the Amazon state of Amapa. This new facility will employ
70 people and increase the acreage which will benefit from SAMBAZON
grower agroforestry by ten-fold.

Given the convergence of the company's work with the Mission's MPP
economic development goals, USAID Brasilia strongly supports the
Chief of Mission's nomination of SAMBAZON for the Secretary's 2006
Corporate Excellence Award.

End Text of Award Nomination.

Chicola

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