The Stockholm-headquartered B2B supplier already sources and sells organic, whole stevia leaves from Paraguay but its stevia extract comes from China.
Building has not yet started but it is scheduled to open in 2018 and will be located in Caaguazu in the south of the country.
A unique genetic source
The company's agricultural director, Wilmar Restrepo, told FoodNavigator there were many reasons it decided to source and process its stevia in Paraguay.
“There is an important interest from the government and other organisations in supporting the stevia. [It makes] common sense to protect it.” Restrepo said. “Paraguay is the native country of stevia which implies access to a unique genetic source.
“There is a huge potential on the agricultural sector from many perspectives, for example a considerable percentage of the population still lives in rural areas, and this creates a potential farmer [base] to grow stevia in a sustainable way.”
The growing and operating areas are also located above the Guarani Aquifer, one of the world's largest underground reserves of fresh water located beneath Argentina, Brazil, Paraguay and Uruguay, said Restrepo.
Using stevia from leaves is an ethical, sustainable choice
For the Swedish company, which last year inked a deal with confectionery giant Barry Callebaut to supply stevia for its chocolate portfolio, the decision to use leaf-derived stevia (rather than investigating other forms such as fermented) was above all an ethical matter.mi
“Natural is a tough word to define and we will leave it to our stakeholders to judge where the limit for a product being natural or not lies,” said Restrepo. “We have taken a strategic decision to work only with stevia from stevia leaves. Only in this way can our business make a meaningful contribution to smallholder farmers.
"By working with organically farmed stevia plants we can be assured that farmland is being maintained in a sustainable way for future generations.”
Once up and running, the refinery will employ around 84 permanent staff and somewhere between 800 and 1000 families will be impacted positively by suppling the leaves, said the firm.
Operating in Paraguay is currently more expensive than other producing countries, such as China, the firm said, but in the middle- and long-term it predicts it will be more sustainable to operate and produce in the Latin American country due to the favourable government environment – such as subsidising farmers’ investment in irrigation systems – a young workforce and access to fresh water.
'We're proud to be a Scandinavian company with roots in Paraguay.'
The firm, which published its annual sustainability report for 2016 this week, said it is founded on Scandinavian values with an international approach.
"For us, this means treating human resources and the planet in a responsible and sustainable manner throughout our operations. We believe in equality, human rights, democracy, ethical behaviour and a high level of trust. Our aim is not just to be a commercially successful company, but also to generate a positive impact on the global climate and our society."
If stevia is a potential cash crop for Paraguayan farmers, the company has a number of safeguards in place to ensure smallholders are not subject to the instability that comes with fluctuating prices as experienced by cocoa and vanilla growers.
Restrepo said: “We sign a five years contract with the farmers, this ensures that they get a fair price for the stevia leaves and a regular income. With our model the farmer does not need to incur important investment at the beginning - we provide stevia plantlets subsidies and a credit scheme [as well as] technical assistance and training for free during the five years.”
The Real Stevia Company operates under parent company Granular.