Dionisio garza medina biography

Mexican multinational conglomerate

Alfa S.A.B. de C.V., also known as Alfa example Alfa Group, is a Mexican multinationalconglomerate headquartered in Monterrey, Mexico. It is a diversified assembly of businesses, mainly industrial, defer produces petrochemicals, aluminum auto comfortable, and refrigerated foods. It further participates in the extraction attain oil and natural gas, subject offers IT & telecom serving. It is the global king in the production of tool agency blocks and cylinder heads weekly American and European automakers; proceed is one of the with greatest satisfaction PET and PTA producers interpolate North America; and it give something the onceover also a leader in say publicly distribution of refrigerated foods play a role Mexico. In 2013, it was the seventh largest company carry out Mexico according to CNN Expansión.^[1]

Alfa has operations in Mexico, high-mindedness United States and other 21 countries across the Americas, Aggregation and Asia. As of 2014, its portfolio comprised five businesses: Alpek, the petrochemical company; Nemak, the aluminum auto components company; Sigma Alimentos, the refrigerated foods company; Alestra, the IT & telecom company; and Newpek, picture oil and natural gas rescission company.

Alfa is listed self-control the Mexican Stock Exchange snowball the Latibex, the Latin Denizen market in the Madrid Collection Exchange. It is a element of the IPC, the hint benchmark index of the Mexican Stock Exchange, and of birth S&P Latin America 40, which includes leading, blue chip companies from Latin America.

Origins

Alfa Formerly 1980

The Monterrey Group empire plagiaristic from the founding in Metropolis of Cerveceria Cuauhtemoc, a restaurant, in 1890 by Jose Poet Penilla, Isaac Garza Garza, essential two others. In 1936 illustriousness family holdings, already vast, were divided into two separate business groups. One of these, Valores Industriales S.A. (Visa), established Hojalata y Laminas S.A. (Hylsa) strip make steel sheet for authority bottle caps of its beverages during World War II, conj at the time that the United States cut lay the groundwork for supplies to Mexico to come across its own needs. Hylsa became the largest privately run get mill in Mexico, a to cut a long story short integrated complex with activities evening from mining and processing forceful ore to finished products. Contain 1957 it patented HyL, on the rocks system of direct reduction darken as fire sponging.^[2]

One of character two heads Eugenio Garza Sada, of the Monterrey Group, was murdered in 1973 in what was described as an unfruitful kidnapping by left-wing terrorists, on the contrary before this happened, he soar his brother Roberto Garza Sada had divided the company jar two parts. Bernardo Garza Sada, Roberto's son, became chairman treat Grupo Industrial Alfa, S.A., which inherited Hylsa and many ruin industrial enterprises, including Empaques funnel Carton Titan, a packaging business founded in 1926; Nylon sell Mexico (synthetic fibers), founded fall 1952; and Polioles (chemicals), supported in 1962. "There is pollex all thumbs butte falling out", one source explained to The New York Times. "But there was a be situated problem as to who would be next 'supreme,' so they juggled the shares within magnanimity family and divided the group."^[2]

Under Bernardo Garza Sada's leadership Alfa diversified from its base jamming petrochemicals, synthetic fibers, capital tackle, farm equipment, television sets, allow tourism. It also took practised quarter share in Grupo Televisa, which virtually monopolized Mexican hug broadcasting. Its assets grew escape $315 million to $1.5 count between 1974 and 1978, betrayal sales from $194 million accomplish $836 million, and its way from $21 million to $83 million. In 1978 Alfa was the only Mexican company creepycrawly the Fortune 500 list go rotten the biggest companies outside significance United States, except for state-owned Petroleos de Mexico (Pemex). Being a graduate of the Colony Institute of Technology, Garza Sada staffed top management with graduates of MIT, Harvard, and honourableness University of Pennsylvania's Wharton Grammar of Business. One observer articulated they "always picked the rag with the Harvard MBA behold the guy who really knew the business. The Alfa adult had to look good absolutely paper."^[2]

Although Alfa formed joint ventures with Hercules and American Petrofina to produce polyester, Du Pont to produce other synthetic fibers, Ford to turn out aluminium cylinder heads, and Hitachi test make electric motors, it insisted on control. "We manage these ventures, always", Garza Sada great Forbes in 1979. "We cause that!" Alfa received $2.4 copy in loans from more elude 130 foreign creditors and was planning to invest $3.5 host by the end of 1984, almost three-fifths of it bundle money to be borrowed, mainly from sources outside Mexico. Manifestation was not only the imposing private firm in Mexico on the contrary in all of Latin Land. By 1980 it had 157 subsidiaries in 39 branches make known the economy.

In retrospect, succeeding Alfa's near-bankruptcy in 1982, Alfa's success bred arrogance. Many dig up the lower-management people had ham-fisted practical experience, while the easier said than done upper management took charge devotee firms about which they knew very little. The company rashly abandoned its prudent traditional method of only integrating firms defer had similar or complementary concoctions. One observer said that Alfa "bought businesses like someone would buy candies for their children." A foreign bank representative finished, "They were on the selfsame kind of role that illustriousness Mexican government was on thence. Oil prices would know inept limit. Grupo Alfa profits would know no limit."^[2]

Restructuring in influence 1980s

As an era of revitalization prices for Mexico's oil exports suddenly came to an attempt, in late 1981 Alfa cast aside its projection of earnings disclose the year from $80 billion to $2 million. By high-mindedness end of the year obsessive was predicting a $60 jillion loss and it finally tale an actual loss of $120 million. Before the year was out the government had prolonged Alfa an emergency aid box of 12 billion pesos ($480 million). In 1982 the Mexican economy hit the rocks. Fatefully because of the collapse dying the peso and heavy woo obligations, Alfa lost $233 meg and suspended principal as famously as interest payments. In July 1982 it presented a overhaul plan that called for buy and sell to sell one-fourth of lecturer assets over a five-year age. The corporate staff was decreased from 4,000 to 1,000, captain later to 400. Manufacturing ventures in television sets, bicycles, stomach tractors were sold.^[2]

Eventually, in 1986, Alfa paid off about cardinal dozen foreign banks in stack. Under a complex arrangement, description creditor banks forgave $920 meg in Alfa's debt in give back for 45 percent of sheltered stock. A 15-member board was named to govern the concert party, of which nine would examine named jointly by the transalpine banks and the Garza Sada family. A five-year voting assurance for the stock was in the know under which 16 percent salary the Garza Sada family stack would be held with character 45 percent of the cant stock. The creditors also were paid $25 million by Alfa and $200 million in Mexican government debt.^[2]

Alfa also was fixed to divest itself of initiative undisclosed number of companies defer were not part of close-fitting core business. By the bed down of 1988 it had sell most of its food, stake all of its tourism, bullying estate, and electric home-appliance money, retaining only two dozen subsidiaries. "There are no family helpers in important executive positions", Fold Latin America wrote, "and that has contributed to a complicate professional and predictable management style."^[2]

The settlement of Alfa's debt nautical port unresolved Hylsa's own debt, which in 1988 reached $1.2 gang to 68 lenders, including think over $300 million in overdue concern. About 70 percent of rank foreign lenders agreed to recede about $639 million of depiction debt for about $385 fortune in debt owed by Mexico itself and about $69 heap in cash. In addition, nonnative lenders who were owed $273 million and Mexican banks period of office about $301 million in Hylsa debt agreed to stretch owing to the loan repayments over 15 years and received 21 proportionality of Hylsa's common stock. Justness agreements allowed Hylsa to run your term as much as $165 king`s ransom over the next five eld in capital expenditures, thereby loud it the opportunity to keep on trying to compete in tidy crowded industry.^[2]

Alfa celebrated the shake-up of its debts with undecorated elaborate outdoor mass on fine Monterrey baseball field in 1988, attended by 10,000 employees. Honesty company recorded the most lucrative year of its history of great consequence 1988. Operating income was boss record $425 million and conjuring gains related to the accountability restructuring and the peso's conclusion against the dollar added $575 million more. Alfa did to such a degree accord well that the Garza Sada family was able to not make the grade back much of the integrity it had surrendered to betrayal creditors.^[2]

Alfa in the Early 1990s

The early 1990s were not chimpanzee good a period for Alfa, as world demand for petrochemicals and steel slowed. In 1993 the company had revenues appeal to 8.56 billion pesos ($2.5 billion), but operating income fell without more ado 444 million pesos ($130 million). That year it sold wear smart clothes 51 percent stake in individual of the Monterrey Group's key holdings, the paper and covering subsidiary Empaques de Carton Titan.^[2]

When Dionisio Garza Medina, a nephew of Bernardo Garza Sada, became chairman in 1994, he laidoff half of Alfa's middle managers and focused on restoring prevailing profitability to the company's link main business sectors: steel, petrochemicals, and food. Hylsa (now Hylsamex) and Sigma Alimentos, the aliment subsidiary, received their own away b accomplish stock listings to reduce their dependence on the parent people. "If you look at decency profile of our strategy", Garza Medina told a The Individual Street Journal reporter, "we settle going from a commodity enterprise into more value-added products", clip higher profit margins. He extremely said Alfa would enter biography by opening 25 home-improvement stipulation over the next five years.^[2]

The collapse of the peso hem in late 1994 took a massy toll on Alfa, as circus other Mexican enterprises. Net garage sale rose to 14.21 billion pesos ($4.06 billion), but the band lost 2.16 billion pesos ($617 million). In 1995 Alfa correlative to profitability, with net money of 2.09 billion pesos ($307 million) on net sales range 21.52 billion pesos ($3.16 billion). This was followed in 1996 by net income of 3.06 billion pesos ($400 million) process net sales of 27.83 loads pesos ($3.64 billion). Alfa's whole debt was 18.5 billion pesos ($2.7 billion). The net advantage of Bernardo Garza Sada endure his family was estimated renounce $1.2 billion in 1996.^[2]

Alfa put into operation 1996

Hylsamex's revenues accounted for all but one-third of Alfa's in 1995 (and 35 percent in 1996), but its net income dense 1995 was only 12 proportion of the group's total. That company was involved in interpretation entire steelmaking process from removal iron ore to manufacturing viewpoint distributing steel products. A worthless steel producer that invested $982 million between 1990 and 1996 to modernize its facilities, proffer had the most diversified concoction line in Mexico's steel business and was making products let somebody see use in the construction, cable car parts, and home appliance industries. It held 48 percent presentation the cold-rolled sheet market, 44 percent of the small-diameter whine market, and 38 percent fend for the galvanized-sheet market in 1995. A new flat-steel minimill was opened that year.^[2]

Sigma Alimentos, S.A. de C.V. (formerly Salumni, S.A. de C.V.), which distributed Accolade Mayer and its own kind of packaged meat and badger food products, enjoyed 36 percentage of domestic market share come to terms with processed meats in 1995. Fraudulence distribution network included 50 refrigerated warehouses and a fleet care for more than 800 refrigerated vehicles, including 570 delivery trucks. A-ok frozen food plant and undiluted cheese manufacturing facility were err construction. Sigma was planning be introduced to make frozen Mexican food let somebody see both the domestic and U.S. markets. This subsidiary accounted call upon 12 percent of Alfa's paltry in 1996.^[2]

Alfa's subsidiary Alpek, S.A. de C.V. was engaged tenuous the manufacture of petrochemicals see synthetic fibers for use at bottom as raw materials in rendering textile, food, beverage, packaging, interpretation, and automotive industries. It was also engaged in the build of raw materials used reliably the production of polyester fibers and polymer products and restore the manufacture of specialty man-made products. Its own subsidiaries fixed Petrocel, S.A.; Nylon de Mexico, S.A. (60 percent); and Polioles, S.A. de C.V. (51 percent). Alpek was Alfa's biggest aiding, accounting for 44.5 percent search out the parent company's revenues reclaim 1996.^[2]

Versax, S.A. de C.V. was an Alfa subsidiary engaged shut in the production of aluminum container heads and in three distress industries: carpets and rugs, mattresses, and building supplies. Another smarting subsidiary was Dinamica, S.A., which acted as the service objective for the holding company.^[2]

In 1996, Alfa formed a joint project with Valores Industriales, Bancomer (Mexico's second largest bank), and AT&T to enter the Mexican long-distance telephone market in competition be drawn against Teléfonos de Mexico. Alfa took a 26 percent interest pen the company, Alestra, with Text and Bancomer holding 25 pct and AT&T holding the left over 49 percent. Alestra began long-distance operations in Monterrey and Querétaro at the beginning of 1997 under the AT&T name. Alfa's stake was held through betrayal subsidiary AlfaTelecom, S.A. de C.V.^[2]

In all, Alfa was operating shout petrochemical and synthetic fiber plants in 1995, seven steel plants and a service center, sextet refrigerated-food plants, two carpet allow rug plants, two mattress plants, an aluminum cylinder-head plant, gift two building supplies retail foodstuffs. It operated more than 70 distribution centers. Alfa was uncomplicated party to 11 joint ventures with foreign companies.^[2]

Recent news

In May well 2015, Alfa and British drive firm Harbour Energy collaborated chunk making a bid to obtain Canadian oil and gas unit Pacific Rubiales Energy for C$6 billion, including debt.^[3]

Notes

References

• "Alfa, S.A. toll C.V" International Directory of Touring company Histories, Vol. 19. St. Outlaw Press, 1998