Q-1: Mrs. Fortabat, Loma Negra has been present in Argentina for 75 years. The Group has vanquished a leading position with a market share that reached more than the 50%. How did the Group experience these last three years of recession that Argentina is going through?
A-1: We have lived these last three years with more dynamism than the previous ones. My grandson and I built a factory that will produce 2,500,000 tones of cement per year. We invested 250 million dollars in this project.
Alejandro Bengolea (Vice President of Loma Negra): We decided to build this factory in the year 1997. From 1997 until now, the investment projects and the plant cost nearly 450 million dollars. This will be the most modern plant of the entire Southern Cone.
A.L. de F: On the other hand, this project includes a factory that we built in Ramallo in association with the Techint Group. This is a milling plant and its dimensions are smaller. It also has an information center for the constructors. We have clients of all sizes and also particular people that want to build their houses. This is also an experimentation center with trucks that go trough the entire country. We have some factories in Catamarca, two in Olavarría, and five in Barker. The company has also other ones in Zapala, San Juan and Paraná.
Q-2: Is the Group maintaining these investment projects without any modifications? In that case, are you expecting a soon recovery of the Argentinean economy?
A-2: Yes, we continued with our investment plans. This plant will be ready by March. This is a young country that needs infrastructure. The construction is the mother of all the industries and it also promotes a lot of work posts. This is also a large country. That is why we need transports. We have built this plant thinking about the future. Once the political reliability settles down, Argentina will be able to receive investments from all over the world because this is a peaceful country without any cataclysms.
Q-3: As most of the big Argentinean companies, Loma Negra is trying to expand its activities with regional projects. The company has just entered Uruguay in association with the Uruguayan Company ANCAP. What is the next step of your expansion plan?
A-3: We have made a joint venture with ANCAP, an Uruguayan company that produces petrol and cement. This association is very convenient for us because we are going to manage this plant and also sell cement in Brazil or in Buenos Aires.
A.B: On the other hand, we have some investment projects with ANCAP because we want to update the plants. We have also thought about exploiting the Uruguayan zone of the Treinta y tres orientales that has great beds of limestone. Then, we are thinking about expanding to the Brazilian South from there. Our alliance with ANCAP also has a regional expansion objective. On the other hand, we also have international expansion plans.
Q-4: Could you tell us something more about these international expansion plans?
A-4: We are optimists because this is the first time that we are thinking about building a factory outside the country.
Q-5: Where are you planning to go?
A-5: I do not want to say it because this is a secret that only three people know.
Q-6: Can you tell us in what continent this project will take place?
A-6: I cannot tell you this by now.
Q-7: Could it be in association with another company?
A-7: It could be.
Q-8: What would be the profile of this company?
A-8: We do not know it yet because we will be starting this project in one or two years from now. We have now to inaugurate this new plant that produces very well. We have just tested it. On the other hand, we want to maintain our personnel because we have almost a mythical relationship with them. We respect each other. This is not the first economic crisis that Argentina has suffered but, certainly, this is the worst one.
A.B: This is the longest one and we suppose that the end of this crisis will not have such a tall peak as the Tequila had. One year after we got over this crisis, we sold 25% more. The end of this one would be more gradual with a development of 4 or 5 %.
A. L. de F: The increase could be higher; perhaps it would reach the 8 or 10%. During the previous crisis, the country needed constructions. And again, the construction industry will play an important role in reducing the unemployment rate. The actual presidential secretary, Nicolás Gallo, created a General Infrastructure Plan that meant an important source of employment. | A.B: This plan requires an investment of 25, 000 million dollars in a proportion of 5,000 million dollars per year. This was a very aggressive plan that covered the entire country and summed more than 150,000 work posts.
Q-9: What is the objective of the Loma Negra´s expansion plan?
A.B: The objective of the expansion plan is to complement a macroeconomic risk of an emerging country and a developed country. That is how we will be able to balance the incomes and the cash flow avoiding- in this way- the cycles that we have as an emergent economy. It is also necessary to increase the access to capital. The Loma Negra´s plants are operating in world class. The operational levels are the same or even better than the most advanced plants of the world. We use self-conducted equipment that compares us to the best practices. We know how to produce cement and we are adding services to that. We consider that the information technology is very important too. Our customers are able to consult their accounts, order and buy through their pages using the Lomanet technology.
Q-10: Moreover its activities in the cementing industry, the Fortabat Group is in the midst of a diversification plan that could also include the petrol sector. Which sectors are you basically taking into account for this plan?
A-10: Petrol is a global factor...
A.B: We have not thought about an expansion into the petrol sector, but into the cement industry, in order to add value to our operations. The cement quality will be smoothed in the future. That is why the difference is in the logistics and in the field of IT, matters that occupy the distribution channel. We are now seeing that the competence is not only between the big cementing groups but it also includes the distribution channels. That is why we are aiming to build a logistic network. We built a very important logistic network that is based on strategic alliances with transports. On the other hand, we count on intelligent software that is a leading case in Latin America because it operates with an advanced distribution system.
Q-11: Mrs. Fortabat, you have been one of the principal industrial voices of the previous administration. How would you define your current position under the present administration?
A-11: I am still one of the principal industrial voices. I have lots of friends that belong to the actual administration and I was also very close to the politicians that belonged to the previous one. The ex president, Carlos Menem appreciated me a lot. It has been a long time since I know De la Rúa.
Q-12: Since many years your activities are not limited only within the usual business boundaries, as you were as well active in the social life. In this regard, could you tell us more about the activities of the Fortabat Foundation?
A-12: We are now building four dining rooms for a school that is very near here. The children are staying all day at school. We have invested 5,600 million pesos on Education and this figure represents the 27% of the total budget. Then, other 29% are for Health and 31% go to non-profit organizations.
We want to help the most humble people. The people that decide to feed poor and hungry children in their dining rooms usually use to enlarge their homes in order to be able to do it every day. I contribute with them because I think that these are the real non-profit organizations. There are newspapers that offer a free space in which these organizations can communicate its necessities and also their phone numbers if the readers want to help or contribute with them. We prefer to deliver the money directly. I gave 500,000 dollars to the United Nations when they were collecting for the hungry children from Bosnia. On the other hand, I bought lots of houses for the homeless people. Loma Negra employs people that fought in Malvinas. We also work with disabled people. We teach them how to do the work.
Q-13: Your interest for the fine arts is acknowledged and is also reflected in the construction of the Fortabat Museum in Puerto Madero. When did your passion for the fine arts begin?
A-13: The museum is under construction. My interest for the fine arts began in the year 1978. I started to bring culture and whenever I bought a painting I have always succeeded!
Q-14: As you know our readers are all top executives and businessmen. What is your final message to them?
A-14: I would tell them to never lose their hopes and to love their fellow men. This is what my live is based on.
NOTE: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
