Grupo Nutresa’s investment plan is 40% ahead of schedule | Company | Business

40% of the investment budget has been executed so far, and this year it will reach $595 billion for growth Regarding projects such as the construction of a chocolate factory in Santa Marta, the company’s president, Carlos Ignacio Gallego, revealed to Portafolio when expressing his views and analyzing current issues.

(farther: Grupo Nutresa’s first-half profit falls 23.5%).

What is the balance for the first semester?

In a challenging environment caused by inflation levels and significant fluctuations in commodity prices and exchange rates, the company achieved sales of $8.8 billion, of which 60.8% came from Colombia and 39.2% from international operations. Although lower than the level in the first half of 2023, we achieved healthy profitability, with earnings before interest, taxes, depreciation and amortization (Ebitda) of $1.2 trillion and a return on sales of 13.5%, thanks to strict cost and expense management and efficiency and productivity programs.

I’m on a business trip, how are you?

Foreign platforms performed well in national currencies, higher than in Colombia. Among them, the Consumer Foods business showed the best commercial dynamism, while in terms of profitability, the Meat, Coffee, Tresmontes Lucchetti and Consumer Foods businesses stood out. As for challenges, I would mention the particular situation of the Chocolate business.

(Lea: Nutresa said it was not aware of any change in control of the company).

What is the plan to resume sales?

At Grupo Nutresa, we do not provide short-term guidance. However, in terms of outlook, we expect better dynamics for the rest of the year, with a gradual recovery in sales. In this environment, where we expect a gradual decline in inflation and financing rates, exchange rate and commodity price volatility, we will face the conditions for our productivity and innovation programs, as well as strengthening our talents and capabilities, seeking appropriate value creation.

What plans are there at the international level?

Grupo Nutresa’s internationalization strategy has resulted in sales of US$876 million in the first half of this year, with production and distribution platforms in 18 countries; its products are sold in 82 countries. For Colombia, exports in the first six months of this year amounted to US$187.2 million. Entering new countries and expanding into categories we don’t yet have are important sources of future growth.

How are you coping with the economic slowdown?

Grupo Nutresa is an organization that has faced cycles of economic acceleration and deceleration. Long-term vision, flexibility, innovation and productivity have enabled it to apply its capabilities and develop new ways of serving its clients, consumers and buyers in a context where households have more limited purchasing power.

What is the impact of the health tax?

Colombia’s recent tax on food and beverages has led to increased consumer spending, accounting for about 30% of total sales in the case of Grupo Nutresa. This effect, combined with continued inflation, has led to an impact on affordability in some categories. Experience in other regions suggests that this is a temporary effect that will gradually recover.

As part of our nutrition and well-being strategy, we have been working on innovation over the years; improving the formulation of existing products in light of the presence of nutritious ingredients; improving packaging to communicate nutritional information transparently to consumers; and linking to programs that promote healthy living habits.

(Via: Gilinsky will cede control of Nutresa to his Arab partners: What does the deal include?).

What about the raw materials? What about cocoa?

Table chocolate prices rose in the first half of the year, with a basket of raw material costs rising sharply, mainly cocoa, pork, beef and coffee. Internally, we manage supply according to responsibility and productivity criteria and, wherever possible, through physical and financial coverage processes. Colombia is an important producer in the food industry, so supplies are very sufficient.

Overall, 81.2% of our supplies come from local suppliers in all the countries where we operate. As for cocoa, the impact of climate change, coupled with speculation, has affected crops in several major producing countries, leading to a historical high price of over $8,000/tonne last year. This means that production costs have been affected for all chocolate industries in the world, with a significant part of the additional costs being transferred to the product price.

How do today’s consumers analyze?

Overall, our consumers are becoming more informed, more connected to social and environmental causes, and have access to a wide range of choices.

What investments does the company plan to make?

The 2024 capital expenditure budget is $595 billion, aimed at growth through various projects. For example, we are currently building a new chocolate factory within the operational area of ​​the Santa Marta Tayrona Free Trade Zone, and we have other projects aimed at domestic and international growth. As of June, 40% of the capital expenditure execution has been achieved.

How would you rate the country’s business environment? What reform issues are you concerned about?

At Grupo Nutresa, we believe in the future of our country and we are aware of the great responsibility we have in creating opportunities. We firmly believe that joint efforts between business, government and communities are an important accelerator of development, so all parties must work to build trust so that this work can take place. We believe that strengthening institutions and sustainable development are key to the future, and we know that as a country we face challenges that need to be addressed. It is therefore important that the proposed reforms are aimed at creating more jobs, improving competitiveness and promoting development. In particular, as I have previously indicated, we insist that the country must be competitive in terms of taxation in order to attract and maintain the necessary investments.

(farther: Gilinsky’s key to finding new investment possibilities).

Are you concerned about the relationship between business and government? How can it be improved?

The relationship between the business community and the government needs to be collaborative on national priorities. To strengthen this relationship, it is important to have greater scope for interaction and to work on specific issues that will allow us to reduce uncertainty, collaborate around common goals and reactivate the economy.

What does it mean to be on the board and have to guide the upcoming changes?

In other markets, it is more common to be both CEO and a board member. For me, this is a vote of confidence from shareholders and an opportunity for the board to work for the company and for the benefit of its partners, shareholders and other stakeholders.

What thoughts have these busy years left for Nutresa in the field of leadership?

At Grupo Nutresa, we have a leadership model supported by talent that fosters development, allowing the organization to move forward, grow and achieve its goals. Leaders learn every day and have the responsibility to inspire and unite our teams to achieve a common dream. Among the many lessons learned in recent years, I have stressed the importance of clarity of purpose, respect for others, global thinking, sustainable and long-term vision and the skills to manage a changing environment. The above has led the organization to recognize that our management must work every day to achieve the goal of building a better world where development benefits everyone.

Constanza Gomez Guasca
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