Exclusive Content: Grupo Lala sells its operation in Nicaragua, leaving behind unfulfilled promises
Last week, Grupo Lala surprised many with the announcement of the sale of its operation in Nicaragua. This decision also means that the promises made by the company regarding the development of Nicaragua will not be fulfilled. These promises included turning Nicaragua into a platform for expansion, transferring technology to producers, increasing industrial storage volumes, and generating employment opportunities.
During the inauguration of the plant in May 2015, Eduardo Tricio Haro, the president of Grupo Lala’s Board of Directors, stated, “We have invested more than 50 million dollars and have incorporated the most advanced technology in the world in this plant. From here, we seek to consolidate our presence in the Central American market.” Grupo Lala is one of the leading dairy companies in Latin America, with operations in Mexico, the United States, Guatemala, and Brazil.
Despite Grupo Lala’s importance in the dairy sector, the promises made remained unfulfilled. The plant in Nicaragua never operated at full capacity, processing only an average of 180 thousand liters per day out of its capacity of 300 thousand liters. This is surprising considering the acquisition of other dairy plants in the country, including Eskimo and La Perfecta.
In 2016, Grupo Lala faced difficulties in exporting its products from Nicaragua to Costa Rica, leading to the purchase of a plant in Costa Rica. However, the company eventually sold the Costa Rican plant in 2020 due to losses and the impact of the pandemic. The resources obtained from the sale were redirected to the companies in Nicaragua and Guatemala.
Instead of expanding operations in Nicaragua, Grupo Lala focused on Guatemala, where it invested 30 million dollars in 2017. Now, Guatemala serves as the company’s Central American hub, fulfilling the promise of establishing a supply platform for the region.
The promises of transferring technology to increase yields and expanding collection routes to remote areas were also left unfulfilled. Dairy production in Nicaragua did experience slight growth, with yields increasing from three to four liters per cow per day. However, the volume of milk collected by Grupo Lala declined over the years, now collecting only about 180 thousand liters per day compared to 200 thousand liters in 2016.
In terms of job creation, Grupo Lala’s workforce in Nicaragua only grew by 200 people since the acquisition of La Perfecta in 2016. The company cited stability for its 1,200 employees upon announcing its departure.
The decline in milk collection volumes in Nicaragua is evident in production statistics from the Central Bank of Nicaragua. In 2015, when Lala began operations, 576.72 million liters of milk were collected and processed out of a total production of 945.87 million liters. However, in 2022, only 1,517.78 million liters were collected out of a total production of 1,517.8 million liters.
While Grupo Lala never openly addressed the problems it faced in Nicaragua, executives confirmed in 2017 that frequent power outages caused significant damage to the San Benito plant.
Overall, Grupo Lala’s departure from Nicaragua leaves behind unfulfilled promises and raises questions about the reasons behind the sale.