Grupo Lala Reorganizes Operations in Central America

Arguing that there is greater potential for sustainable and profitable expansion in Nicaragua and Guatemala, the Mexican business group dedicated to dairy production decided to close the operations of its production plant in Costa Rica.

Thursday, December 3, 2020

Although at the beginning of 2019 Lala announced that it had invested $14 million in the purchase of high-tech machinery and in the expansion of its dairy plant in San Ramón, province of Alajuela, on December 1, 2020 it reported that they decided to close operations.

Arquímedes Celis, Lala's CEO, told Elfinancierocr.com that "... we remain focused on ensuring that all of Lala's businesses achieve performance levels in line with our goals and expectations. Additionally, the capital released with this closing will be reallocated to our businesses in Nicaragua and Guatemala where there is more potential to achieve sustainable and profitable growth."

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According to Ana Maria Orozco, Grupo Lala's general manager for Central America, these changes have the "... purpose of focusing their efforts in the key markets of the Central American region, we know that decisions like these impact not only our employees and their families, but also the communities where we operate, therefore and as a responsible company, we will act totally attached to the Costa Rican legislation."

In this sense, there is concern among local suppliers. Reviewed by Elobservador.cr that "... National Chamber of Milk Producers asked for a 'transition period' longer than the 10 days announced by Grupo Lala before closing its operations in Costa Rica. Producers need to find alternatives to place their production of 37,000 kilos of milk per day, which until now were marketed through Lala's dairy plant located in San Ramon de Alajuela."

The article adds that "... Lala's milk was supplied by some 70 small and medium producers that make up Coopeleche. They have farms in San Ramón, San Carlos, Guayabo de Bagaces, Tilarán, Esparza, Miramar and Guatuso. According to the Chamber, a transition period is needed to minimize the negative impact on this group of national producers. The request was sent to Lala this Wednesday morning and has not yet received a response."

See article from Elfinancierocr.com "Grupo Lala closes operations in Costa Rica to focus on markets in Nicaragua and Guatemala" and from Elobservador.cr "Producers ask Lala for more time to find a buyer for 37,000 kilos of milk".



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As a result of the closure of Grupo Lala's factory in Costa Rica, the 37 thousand liters of milk that 70 local producers sold daily to the company of Mexican origin were left without a buyer, however, Dos Pinos promised to acquire the product.

On December 1st Grupo Lala informed that it will close the milk plant that operates in the province of Alajuela.

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From a statement issued by Grupo Lala:

Mexico City, on January 28, 2016 - Grupo LALA, SAB de CV, a Mexican company focusing on the healthy foods industry (BMV: LALA B), reports that it has entered into an agreement to acquire 100% of the capital shares of Productos Lácteos La Perfecta, S.A.

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The start of operations of a plant with capacity to process up to 300 thousand liters of milk per day will result in benefits not only for the production sector, which could sell most of the expressed milk, but also force an improvement in the regional dairy market conditions, infrastructure and production practices related to animal feed, sanitary measures, among other things.