Guatemala’s GDP per capita is comparable to that of the US in the late 1800’s. There is a long way to go for the country to achieve a good level of development. With such large challenge, who is leading this much-needed growth and making the necessary investments? At the moment, a few family-run conglomerates are taking the lead and setting the foundations for Guatemala. As we try to relate to the business environment in America, the scenario has similarities from how the US was in the late 19th century, but brings new challenges. We visited two of those business groups, in the construction and in the food and beverage industries.
Cementos Progreso manufactures cement and aggregates. The facilities are world-class, as could not be different as they operate in a global environment. However, they face two challenges that are unique to developing countries. In order to keep expanding, they first need to look externally for investments. Secondly, they need to look internally to develop their community. As an example of the external investment side, the company is currently building a new plant which required over 700M dollars. The financing came from retained earnings, loans from local banks, and an international bond. Only mature companies are able to build this complex financial structure in the country.
Cerveceria Centroamericana is in the food and beverage industry, with beer as its main product. They are currently doubling the capacity as they face competition from AB Inbev, the largest beer company in the world. The group also has investments in energy, packaging, infrastructure and real estate. Their CEO, Guillermo Castillo, sees himself as an asset manager who seeks opportunities for growth in different lines of business.
Both businesses are aware of the need to develop their communities. In Guatemala, it is not enough to work on the supply side. Smart business also need to help aggregate demand expand. Among other initiatives, they run amazing projects focusing on education and food. A lot of kids in Guatemala do not get adequate nutrition, preventing them from reaching their full intellectual capacity. In order to tackle it, Cementos Progreso runs a program to cultivate a local tree that is rich in nutrients. Cerveceria Centroamericana runs a program through their foundation, providing daily meals to hundreds of students at school. In addition, both groups run schools and even employed some of their students after graduation. The ultimate goal is to create a virtuous development cycle.
The final part of the Chazen tour will focus on more initiatives with social impact. Before that, a final message from José Raúl, CEO of Cementos Progreso: “If you want to help people, create jobs that generate wealth”.
– Pedro Barata ’18