Sugar, Spice, and Everything Nice

After two nights, we had a final breakfast at Earth and departed the Carribean side of Costa Rica to began the journey back towards San Jose. Our first stop along the return trip was the Hacienda Tayutic. Our tour guide Sergio took us around the property where we got to experience panoramic views of the surrounding scenery. He also took us to a local church that resides on the property. Originally, the church was in a surrounding community as it is 250 years old. It was later moved to this property when the locals wanted to build a newer, bigger church. The church on the property is still used for weddings and mass. Additionally, there is a gazebo overlooking the valley and mountains that can be used for civil weddings. 

Next, Sergio walked us through the process of macadamia production. The plants take 7-8 years to mature before they can produce the nuts. There is no actually harvesting process as the nuts fall off the tree once they are ripe. The workers would then simply collect the nuts and they would be processed from there. Sergio explained that initially all the plants are male (featuring spiky leaves) and that later a female branch is attached to facilitate reproduction.  In the processing, the green outer skin is first removed to reveal a hard center core which contains the nut.  The nuts are separated by quality based on the color of this shell; brown being first quality and black being second quality. Black nuts are removed and placed in an oven to remove the humidity and hopefully change the color to make them first quality. Also, sometimes nuts are removed because the hard center is empty as squirrels have eaten the nut.  Finally the hard outer core is removed to extract the nut and then they can be exported and sold.

We were then taken to a room where we again provided with amazing views and given refreshments; specifically featuring a drink made with sugar cane. One of the managers of Assukar Sugar Company then gave us a presentation with an overview of their process and the history of the company. They are one of the only companies to make organic sugar products in the world. As a result, they export to 16 countries worldwide including the US, France, and Spain to name a few. We also had a short trivia competition where by answering a question correctly, we were rewarded with a goody bag featuring some of the companies products.  I correctly answered the question about their first product which was the panela blocks (solid sugar). 

After leaving the hacienda, we had chicharones (pork) at a local restaurant. Following lunch, we made the journey to Cartago to visit our first business company. Vitec is a British company that makes a multitude of tripods, fluid heads, and other camera accessories.  Julio, the president of the Costa Rican branch, gave us a presentation to give us background information on what their overall parent company does and what is specifically produced in the Costa Rican location. A few of the brands produced in their location are Manfotto (Italian), Sacher (German), and OCONNOR (British). While describing their production process, Julio showed us a board that featured small improvements created by employees. The employees essentially provide solutions or better efficieny techniques for small problems or tasks. While the solution may be small, it can have a larger impact. I think it is a great system because not only does it encourage the employees to improve things but it also benefits the company as a whole. 

After touring the manual assembly productions lines and seeing how the workers put the components together, we then went into the machine production part of the plant. We got to see how large, solid chunks of solid aluminum are cut down and shaped into the base of future components. The metal parts are then run through an oxidizing process to prevent rust and corrosion and to also give it the black color. While I am not an engineer or mechanic, I could still appreciate all the different components and variables that go into making these products. Vitec Group houses numerous leading brands of camera accessories that are used worldwide in broadcasting and photography. To name a few, Vitec can boast BBC, ESPN, National Geographic and many more as customers who purchase their products. 

The last stop of the day during our journey back to San Jose was the Cartago Basilica. It was built in 1912 and features Our Lady of Angels as the patron saint. The origin of the church dates back to the 1600s where a young girl found a statue in the shape of the Virgin Mary. She took the statue home but in the morning it had disappeared. She went back to the spot where she found it and it was there again. She took it home and once again it disappeared. She informed a priest of this occurrence and he dismissed it. He took the statue with him to the church and once again it disappeared. The priest then found it at its origin spot the next day. The locals took this instances as a sign that a church should be built there. A unique attraction at the basilica is the spring. Basically, people come from all over to collect the water and bring it back home or to someone affected with some affliction.  Individuals have their own intentions that they pray for and when that intention occurs, they would then return to the church to place a memento (charm, trophy, etc.) to commemorate that their prayers were answered. 

Question of the Day: 

Explain the concepts of supply and demand using specific examples from Vitec and Assukkar. 

The basic principle of supply and demand is to generate your supply so that it matches demand (i.e. the market is at equilibrium). For companies, they want to have enough supply to meet the demand but also not have too much supply so that they are not bleeding money from covering warehousing costs to store an abundance of inventory. In some industries, demand is more stable so businesses have a better idea of how much inventory they need (necessities like milk or bread). In other industries, demand is more volatile so they have to be prepared for demand to drop or increase rapidly (oil for example). 

Vitec and Assukkar demonstrate two different scenarios that can occur in the supply and demand process. In the case of Assukkar, the manager told us that their demand was higher than the supply. They cannot make enough product to meet all demand because they are one of the only companies in the world to create organic sugar products.  In this case, there would be a shortage in the market which causes the price to increase. As the manager told us, the product sells for about $1 in Costa Rica but in the USA (at Whole Foods for example), the price jumps up to $9.50. We can see how high demand paired with a lower supply creates a shortage and forces the price up.  

In Vitec's case, almost the opposite occurs. Vitec supplies tripods, fluid heads, and other camera accessories to professionals and companies within the broadcasting and photography world. Due to this fact, their products are a speciality and as such the demand is not as high as sugar for example. Because the demand is lower, their supply would need to be lower. If their supply was too high, then there would be a surplus and it would drive the price down.  To avoid this, Vitec seems to employ a just in time inventory. They make enough products to just meet the demand so that there isn't a shortage or surplus in the market. Julio told us that their products may only sit in their warehouse a day or two at the most and then they are loaded onto containers and shipped out. 

In both cases, the companies are successful within their respective supply and demand scenarios. They understand what their demand and how they can meet that demand as best as possible with their supply.