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. According to the company, the factory will stop operating on December 11th.
After Grupo Lala decided to close the operations of its dairy production plant in Costa Rica, a debate began over whether Dos Pinos' dominance in the local market was due to protectionist policies or to the brand positioning, quality and price of its products.
In Costa Rica, the cooperative Coopeleche increased by 25% the volume of raw material sold to the Mexican Lala, a rise that would be explained by the better positioning of the company in the local market.
In general, volumes produced have increased, since official figures detail that between 2017 and 2018, milk production in Costa Rica grew by 1.5%, going from 1.14 million to 1.16 million tons.
Mexico's Lala invested $14 million in the purchase of high-tech machinery and the expansion of its dairy plant located in San Ramon, Alajuela province.
Managers of the Mexican company reported that the area of the facilities was expanded from 4,240 m2 to 24,250 m2, and with this expansion the company reaches a processing capacity in the country of 150 thousand liters of milk per day.
The production plant that Grupo Lala is building in Escuintla, Guatemala, will be ready to start operating in September.
The milk production that will be shipped from the plant in Palin, Escuintla, will go to the southern market of Mexico, Honduras and El Salvador, according to representatives of the company of Mexican origin.
The Mexican company Lala will be building a milk, ice cream and by-products factory in Guatemala, with capacity to process 5 thousand tons of products per month, and it will start operating in the first quarter of 2018.
The 12 thousand square meter production plant will be built in Escuintla and will have a production line of pasteurized milk, ultrapasteurized (UHT) milk and ice cream.
The Mexican company Lala plans to invest $14 million in the expansion of its plant in Alajuela and to start selling milk and ice cream in the Costa Rican market, starting from 2018.
The investments being made in Central America by companies in the dairy industry reflect the growth potential of this business in the region, where per capita consumption of milk and dairy products has been growing during the last years.
The dairy products that the Mexican company is to sell in Nicaragua under the brand Lala will be made at the plant in San Benito, in Tipitapa, department of Managua.
The dairy products under the brand Lala which will start to be sold in Nicaragua are whole milk, lowfat, light, low fat, lactose-free and lactose-free Light.
The health authorities have announced that they have reached an agreement, but no dates or deadlines have been set to resume sales of the product between the two countries.
Theagreement announcedby the Ministry of Agriculture and Livestock of Costa Rica and theInstitute for Protection and Agricultural in Nicaragua only mentions assessments to be made in plants belonging to the companies Dos Pinos and Grupo Lala, but does not mention dates on which they will be carried out or deadlines for the resumption of bilateral trade in milk.
The transaction, which was carried out in 2015, was not announced at the time in Costa Rica, where high production costs have prompted several companies to move their operations to Nicaragua.
In 2015 the Costa Rican dairy producer Dos Pinos bought the industrial plant La Completa for an undisclosed amount.Dos Pinos is a cooperative network made up of more than 2,000 associated producers and workers.
Health authorities in Costa Rica have confirmed that since May they have prevented the entry of products from two dairy plants belonging to the Mexican company Lala in Nicaragua.
After information was circulated about the alleged closure of the Nicaraguan market to dairy products from three companies in Costa Rica, the health authorities of this country have acknowledged that since May 2016 they have restricted the entry of Lala's dairy products , having detected".. . several examples of "non - compliance" in the production system of the two plants inspected. "
Nicaraguan cattle farmers are complaining that the Mexican company Lala could be stockpiling more than 70% of the milk available to the industry.
Complaints by entrepreneurs in the Nicaraguan dairy and livestock sector come just days after the Mexican industrial group announced the purchase of the company Productos Lacteos La Perfecta, which generates annual sales of $46 million.
The Mexican group has agreed to acquire 100% of the shares of the Nicaraguan company which has sales of $46 million a year.
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.
In order to take advantage of the conditions offered by both countries for the development of farming a proposal will be made to the Mexican companies Lala and Sukarne to expand operations to Honduras.
The objective of this proposal is to maximize the conditions offered by both Nicaragua and Honduras for the development of agricultural activities, both in the processing of milk and dairy products as well as in the meat sector.
The start of operations by Lala will have a favorable impact on the conditions of production and quality of milk and stabilize the price of milk for producers.
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.