Chilean labor is becoming increasingly expensive in comparison to neighboring countries such as Bolivia and Peru. Moreover, the agribusiness sector faces the challenge of a shrinking labor pool, which in effect increases labor cost.
As such, Subsole, the largest Chilean-owned fruit exporter in the country, needs to attract and retain a reliable and sustainable workforce to keep productivity high while remaining competitive. One of the company’s biggest challenges is how to tackle the seasonality associated with agricultural labor markets. With a workforce of 2,312 and a total labor force of 22,740 during harvesting season, Subsole has become increasingly dependent on seasonal workers. These labor constraints place stress on company resources to promote steady growth.
In 2011, the IDB approved a US$32 million loan to support Subsole’s capital expenditure program for 2011–14, thereby allowing the company to increase production, expand cold storage and processing facilities, and create jobs throughout its supply chain. A portion of the IDB loan financed the construction of a solar photovoltaic plant.
Through a Shared Value Appraisal with Subsole, the IDB set out to determine how to operationalize a shared value program with the company. The appraisal resulted in the identification of innovative solutions to stabilize and retain Subsole’s workforce through a shared value approach that aims to improve productivity, reduce operating costs, and include women in agriculture.
- Subsole increased its output by 21 percent and created 2,481 direct jobs as well as 22,000 indirect jobs in 2012 alone.
- Throughout the value chain, the project had an effect on 1,329 suppliers—among them many small and medium agricultural producers.
- The 300 kilowatt plant was the first industrial-sized installation of this type in the Atacama Desert, and Subsole has become the first fruit exporter in the country to rely on a renewable source of energy.