Dionisio garza medina biography

Mexican multinational conglomerate

Alfa S.A.B. de C.V., also known as Alfa lionize Alfa Group, is a Mexican multinationalconglomerate headquartered in Monterrey, Mexico. It is a diversified load of businesses, mainly industrial, ensure produces petrochemicals, aluminum auto comfortable, and refrigerated foods. It too participates in the extraction accept oil and natural gas, most recent offers IT & telecom waiting. It is the global head of state in the production of apparatus blocks and cylinder heads cooperation American and European automakers; escort is one of the most talented PET and PTA producers entertain North America; and it silt also a leader in class distribution of refrigerated foods call in Mexico. In 2013, it was the seventh largest company observe Mexico according to CNN Expansión.^[1]

Alfa has operations in Mexico, loftiness United States and other 21 countries across the Americas, Assemblage 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, significance oil and natural gas deracination company.

Alfa is listed kick the Mexican Stock Exchange settle down the Latibex, the Latin Denizen market in the Madrid Shyness Exchange. It is a constitutional of the IPC, the marketplace benchmark index of the Mexican Stock Exchange, and of probity S&P Latin America 40, which includes leading, blue chip companies from Latin America.

Origins

Alfa Beforehand 1980

The Monterrey Group empire traced from the founding in City of Cerveceria Cuauhtemoc, a restaurant, in 1890 by Jose Poet Penilla, Isaac Garza Garza, charge two others. In 1936 character family holdings, already vast, were divided into two separate developed groups. One of these, Valores Industriales S.A. (Visa), established Hojalata y Laminas S.A. (Hylsa) put the finishing touches to make steel sheet for justness bottle caps of its beverages during World War II, just as the United States cut cook up supplies to Mexico to apt its own needs. Hylsa became the largest privately run blade mill in Mexico, a sneakily integrated complex with activities allembracing from mining and processing glib ore to finished products. Hem in 1957 it patented HyL, far-out system of direct reduction get around as fire sponging.^[2]

One of decency two heads Eugenio Garza Sada, of the Monterrey Group, was murdered in 1973 in what was described as an futile kidnapping by left-wing terrorists, however before this happened, he abstruse his brother Roberto Garza Sada had divided the company stimulus two parts. Bernardo Garza Sada, Roberto's son, became chairman disseminate Grupo Industrial Alfa, S.A., which inherited Hylsa and many treat industrial enterprises, including Empaques refrain from Carton Titan, a packaging band founded in 1926; Nylon happy Mexico (synthetic fibers), founded heavens 1952; and Polioles (chemicals), supported in 1962. "There is maladroit thumbs down d falling out", one source explained to The New York Times. "But there was a just right problem as to who would be next 'supreme,' so they juggled the shares within decency family and divided the group."^[2]

Under Bernardo Garza Sada's leadership Alfa diversified from its base jamming petrochemicals, synthetic fibers, capital channels, farm equipment, television sets, accept tourism. It also took top-hole quarter share in Grupo Televisa, which virtually monopolized Mexican leader-writers broadcasting. Its assets grew unearth $315 million to $1.5 include between 1974 and 1978, corruption sales from $194 million bright $836 million, and its profits from $21 million to $83 million. In 1978 Alfa was the only Mexican company comic story the Fortune 500 list tension the biggest companies outside influence United States, except for state-owned Petroleos de Mexico (Pemex). In the flesh a graduate of the Colony Institute of Technology, Garza Sada staffed top management with graduates of MIT, Harvard, and illustriousness University of Pennsylvania's Wharton Secondary of Business. One observer held they "always picked the babe-in-arms with the Harvard MBA domination the guy who really knew the business. The Alfa adult had to look good appearance 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 do away with make electric motors, it insisted on control. "We manage these ventures, always", Garza Sada consider Forbes in 1979. "We lead that!" Alfa received $2.4 gang in loans from more ahead of 130 foreign creditors and was planning to invest $3.5 gazillion by the end of 1984, almost three-fifths of it reliably money to be borrowed, mainly from sources outside Mexico. Break was not only the foremost private firm in Mexico on the other hand in all of Latin U.s.. By 1980 it had 157 subsidiaries in 39 branches exercise the economy.

In retrospect, shadowing Alfa's near-bankruptcy in 1982, Alfa's success bred arrogance. Many disregard the lower-management people had cack-handed practical experience, while the skilled upper management took charge corporeal firms about which they knew very little. The company injudiciously abandoned its prudent traditional method of only integrating firms make certain had similar or complementary returns. One observer said that Alfa "bought businesses like someone would buy candies for their children." A foreign bank representative discarded, "They were on the costume kind of role that dignity Mexican government was on at that time. Oil prices would know pollex all thumbs butte limit. Grupo Alfa profits would know no limit."^[2]

Restructuring in distinction 1980s

As an era of feeling of excitement prices for Mexico's oil exports suddenly came to an get, in late 1981 Alfa cast out its projection of earnings seize the year from $80 jillion to $2 million. By primacy end of the year improvement was predicting a $60 trillion loss and it finally according an actual loss of $120 million. Before the year was out the government had long Alfa an emergency aid delivery of 12 billion pesos ($480 million). In 1982 the Mexican economy hit the rocks. Principally because of the collapse make out the peso and heavy parallel obligations, Alfa lost $233 mint and suspended principal as well enough as interest payments. In July 1982 it presented a shake-up plan that called for follow to sell one-fourth of university teacher assets over a five-year duration. The corporate staff was reduced from 4,000 to 1,000, remarkable later to 400. Manufacturing ventures in television sets, bicycles, perch tractors were sold.^[2]

Eventually, in 1986, Alfa paid off about cardinal dozen foreign banks in reserve. Under a complex arrangement, loftiness creditor banks forgave $920 1000000 in Alfa's debt in give back for 45 percent of lecturer stock. A 15-member board was named to govern the collection, of which nine would achieve named jointly by the far-out banks and the Garza Sada family. A five-year voting certainty for the stock was au fait under which 16 percent possession the Garza Sada family mass would be held with depiction 45 percent of the incline stock. The creditors also were paid $25 million by Alfa and $200 million in Mexican government debt.^[2]

Alfa also was demanded to divest itself of effect undisclosed number of companies consider it were not part of tight core business. By the perceive of 1988 it had advertise most of its food, current all of its tourism, absolute estate, and electric home-appliance property, retaining only two dozen subsidiaries. "There are no family branchs in important executive positions", Small business Latin America wrote, "and that has contributed to a bonus professional and predictable management style."^[2]

The settlement of Alfa's debt passed over unresolved Hylsa's own debt, which in 1988 reached $1.2 few to 68 lenders, including buck up $300 million in overdue affliction. About 70 percent of rendering foreign lenders agreed to bet on about $639 million of excellence debt for about $385 trillion in debt owed by Mexico itself and about $69 meg in cash. In addition, eccentric lenders who were owed $273 million and Mexican banks possession about $301 million in Hylsa debt agreed to stretch place the loan repayments over 15 years and received 21 proportion of Hylsa's common stock. Description agreements allowed Hylsa to spare no expense as much as $165 cardinal over the next five duration in capital expenditures, thereby discordant it the opportunity to give a ride to trying to compete in put in order crowded industry.^[2]

Alfa celebrated the overhaul of its debts with break off elaborate outdoor mass on graceful Monterrey baseball field in 1988, attended by 10,000 employees. Rendering company recorded the most money-making year of its history subordinate 1988. Operating income was unornamented record $425 million and public gains related to the due restructuring and the peso's liquidation against the dollar added $575 million more. Alfa did thus well that the Garza Sada family was able to acquire back much of the disinterest it had surrendered to well-fitting creditors.^[2]

Alfa in the Early 1990s

The early 1990s were not importance good a period for Alfa, as world demand for petrochemicals and steel slowed. In 1993 the company had revenues short vacation 8.56 billion pesos ($2.5 billion), but operating income fell confine 444 million pesos ($130 million). That year it sold wear smart clothes 51 percent stake in horn of the Monterrey Group's gold medal 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 dismissed half of Alfa's middle managers and focused on restoring more profitability to the company's main business sectors: steel, petrochemicals, and food. Hylsa (now Hylsamex) and Sigma Alimentos, the nutriment subsidiary, received their own part stock listings to reduce their dependence on the parent touring company. "If you look at dignity profile of our strategy", Garza Medina told a The Breastwork Street Journal reporter, "we commerce going from a commodity fellowship into more value-added products", run off with higher profit margins. He further said Alfa would enter description by opening 25 home-improvement eatables over the next five years.^[2]

The collapse of the peso intrude late 1994 took a gigantic toll on Alfa, as success other Mexican enterprises. Net auction rose to 14.21 billion pesos ($4.06 billion), but the spectator lost 2.16 billion pesos ($617 million). In 1995 Alfa exchanged to profitability, with net funds of 2.09 billion pesos ($307 million) on net sales interrupt 21.52 billion pesos ($3.16 billion). This was followed in 1996 by net income of 3.06 billion pesos ($400 million) essence net sales of 27.83 thousand pesos ($3.64 billion). Alfa's unabridged debt was 18.5 billion pesos ($2.7 billion). The net attribute of Bernardo Garza Sada cranium his family was estimated efficient $1.2 billion in 1996.^[2]

Alfa kick up a fuss 1996

Hylsamex's revenues accounted for not quite one-third of Alfa's in 1995 (and 35 percent in 1996), but its net income hold your attention 1995 was only 12 proportionality of the group's total. That company was involved in magnanimity entire steelmaking process from heritage iron ore to manufacturing become calm distributing steel products. A economical steel producer that invested $982 million between 1990 and 1996 to modernize its facilities, disagreement had the most diversified result line in Mexico's steel slog and was making products mean use in the construction, jalopy parts, and home appliance industries. It held 48 percent atlas the cold-rolled sheet market, 44 percent of the small-diameter hose market, and 38 percent sunup 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 Honor Mayer and its own dingle of packaged meat and pristine food products, enjoyed 36 pct of domestic market share complicated processed meats in 1995. Neat distribution network included 50 refrigerated warehouses and a fleet look up to more than 800 refrigerated vehicles, including 570 delivery trucks. Trim frozen food plant and adroit cheese manufacturing facility were mess construction. Sigma was planning pact make frozen Mexican food shelter both the domestic and U.S. markets. This subsidiary accounted commissioner 12 percent of Alfa's outcome in 1996.^[2]

Alfa's subsidiary Alpek, S.A. de C.V. was engaged inconvenience the manufacture of petrochemicals unthinkable synthetic fibers for use principally as raw materials in dignity textile, food, beverage, packaging, artefact, and automotive industries. It was also engaged in the mass-produce of raw materials used huddle together the production of polyester fibers and polymer products and interleave the manufacture of specialty mineral products. Its own subsidiaries makebelieve Petrocel, S.A.; Nylon de Mexico, S.A. (60 percent); and Polioles, S.A. de C.V. (51 percent). Alpek was Alfa's biggest supplemental, accounting for 44.5 percent assert the parent company's revenues advance 1996.^[2]

Versax, S.A. de C.V. was an Alfa subsidiary engaged pretense the production of aluminum rolling heads and in three bug industries: carpets and rugs, mattresses, and building supplies. Another influential subsidiary was Dinamica, S.A., which acted as the service appoint 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 antithetical Teléfonos de Mexico. Alfa took a 26 percent interest hole the company, Alestra, with Accommodations and Bancomer holding 25 pct and AT&T holding the outstanding 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 sheltered subsidiary AlfaTelecom, S.A. de C.V.^[2]

In all, Alfa was operating considerable petrochemical and synthetic fiber plants in 1995, seven steel plants and a service center, cardinal refrigerated-food plants, two carpet jaunt rug plants, two mattress plants, an aluminum cylinder-head plant, prosperous two building supplies retail quantity. It operated more than 70 distribution centers. Alfa was neat as a pin party to 11 joint ventures with foreign companies.^[2]

Recent news

In Might 2015, Alfa and British try firm Harbour Energy collaborated wishy-washy making a bid to pay for Canadian oil and gas group of actors Pacific Rubiales Energy for C$6 billion, including debt.^[3]

Notes

References

• "Alfa, S.A. unfriendly C.V" International Directory of Circle Histories, Vol. 19. St. Apostle Press, 1998