Cleaning House

Colombia's Grupo Empresarial Antioqueño has been busy streamlining its corporate structure and making itself more attractive to investors.

Bancolombia's headquarters in Medellin.

The countryside around Medellín is spectacularly beautiful. The green valleys and sharp mountains look more like the Switzerland of the von Trapps than the tropical Colombia of Gabriel García Márquez. But there aren't many people in bustling Medellín with an interest in nature. A more likely focal point for the industrious paisas – as the natives of Medellín are known – is the towering headquarters of Bancolombia, shooting up into the sky like a rocket ready for takeoff.

Bancolombia, Colombia's biggest bank, is the best-known asset held by Medellín conglomerate Grupo Empresarial Antioqueño (GEA). Over the years, GEA evolved into a messy collection of businesses and cross-shareholdings that defy logic. Investors admire the group's driven and shrewd bosses but are less impressed by its confusing corporate structure. Why should the country's biggest bank – Bancolombia – be 10% owned by two cement companies which are both part of the GEA empire?

在哥伦比亚巩固其职位，GEA开始寻求融资和市场机会。但要产生在国外扩大所需的资金，GEA必须说服投资者，它已经重新制作并改善了其所有权结构。

GEA traces its origins back to the 1970s, when a group of local companies banded together to ward off takeover attempts by competitors in Bogotá. By the mid-90s, GEA was a group of 130 companies with an overlapping shareholder structure. Apart from owning shares in each other, the companies all adopted the same goal of investing for the long term.

随着GEA家族公司的扩大，他们了解到资本市场在集团上皱眉，特别是那些缺乏明显的协同作用，并且受到复杂的交叉股份的约束。而GEA想提高现金。“在20世纪90年代，我们开始讨论该集团的转型，”Bancolombia总裁jorgeLondoño说，Bancolombi总裁，GEA的一个柱子。“高度多元化的企业集团并未受到市场的看法，我们意识到我们需要能够进入市场成长。”

Over the past five years, GEA has quietly consolidated its disparate shareholdings into three clear groups: construction assets are now concentrated around Cementos Argos; banking assets come under Bancolombia and insurance company Suramericana; and food makers are held by Compañía Nacional de Chocolates. These umbrella companies, in turn, took shares in each other, rather than holding stakes in various subsidiaries.

本集团将这三家公司选择为锚，说Nacional de Chocolates总裁Carlos Piedrahita，因为它们是“最成功”，他们为未来拥有最佳前景。销售了GEA决策者认为GEA决策制造商的经营公司的增长潜力有限，或者不适合新结构。

Sugar Rush
整合努力从市场上获得了奖金。RECREDORES ASOCIADOS总裁Mauricio Botero，Bogotá的经纪人赞同GEA战略。“他们所做的一切都在考虑，”他热烈。“它已经下降得很好。他们简化了，他们已经澄清了，他们有一个很好的焦点并朝着正确的方向前进。”Botero认为大多数人都同意GEA的演变对集团和国家有利。

Nacional de Chocolates is a perfect example of this evolution. Until 2000, three different GEA companies were in the food production business. Nacional de Chocolates produced coffee, as well as chocolates, while Noel, a cookie maker, also owned a meat packer. Then there was Doria, which makes pasta. Says Piedrahita, "In the 1980s, 1990s foreign investors didn't understand our corporate structure." In 2002, to get the food unit in order, GEA created a holding company – Inversiones Nacional de Chocolates SA – that owns and oversees all 34 food and beverage operations, which are further organized into six lines of business: chocolate, coffee, cookies, pastas, meat packing and candies.

Under this arrangement, 80% of Inversiones Nacional de Chocolates' balance sheet is in food and beverage, while other GEA companies – like cement company Argos and retailer Almacenes Exito SA – make up the rest. Publicly listed Inversiones Nacional de Chocolates is looking especially attractive to equity investors these days in the wake of SABMiller's $7.8 billion acquisition of brewer Bavaria in 2005. The Santo Domingo family's decision to sell Bavaria to a multinational makes Inversiones Nacional de Chocolates the only independent food and beverage company listed on the Bogotá Stock Exchange.

Sweet Sensation
由于重组成反转Nacional de Chocolates, the food company has also changed its attitude toward joint ventures and strategic partnerships. Danone, the French food giant, took a 30% share in Galletas Noel – part of Noel – in 1999 for an undisclosed sum. Last year, Inversiones Nacional de Chocolates bought back that share for $50 million. Piedrahita says Danone offered to bump up its stake in Galletas Noel to 51%, but that Inversiones Nacional de Chocolates decided to unwind the alliance because management felt that having decisions come from Paris – six time zones away – compromised Noel's independence and agility. "Multinationals take very broad decisions – not localized ones," says Piedrahita. And neither do they have much to contribute anymore. "We've discovered that Colombia is different from Peru, which is different from Ecuador. The truth is that a multinational is not so different from us," says Piedrahita. "We buy our industrial technology from the same suppliers they do. And financial resources are not a limiting factor for us at this time."

Rather than depend on Danone to provide technology, Inversiones Nacional de Chocolates decided that its own distribution model was good enough to export to neighboring countries. "We have a business model that is successful for Latin America," says Piedrahita. "We have a capillary distribution system – we'll go to the mom-and-pop stores. Our distribution arm is like an army of ants," he says, adding that the company's products are available in 1,040 of Colombia's 1,080 municipalities. Foreign multinationals, Piedrahita asserts, seem to concentrate on large urban markets and ignore rural customers; they also zero in on supermarket chains, whereas mom-and-pop stores still account for the bulk of consumer goods sales in Colombia. Part of Inversiones Nacional de Chocolates' distribution strength is its ability to tap unconventional channels. Piedrahita describes Nova Venta, a wholly owned subsidiary of Chocolates, as the "Avon" of foods since it sells Chocolates and Noel products through a workforce of 25,000 women going door-to-door.

Just four years ago, Cordialsa, the company's international distribution subsidiary, had a presence only in Ecuador, Mexico and Venezuela. Nowadays, Inversiones Nacional de Chocolates' distribution arm reaches even further afield, hitting 11 countries from the US down to Ecuador. This branching out is part of Chocolates' decision to focus on what it considers "strategic regions" – the Andes, Central America and the Caribbean basin – while also getting its feet wet in potentially lucrative areas like the US Hispanic market. Piedrahita notes that Peru and the Dominican Republic are missing from Cordialsa's network, and says that Chocolates is interested in exploring those markets.

巧克力也考虑海外生产。In December 2004, the company bought two factories in Costa Rica from Nestlé, along with several local candy brands, such as Jet, Chocobola and Chocolisto. In 2004, Nestlé sold $15 million worth of candy produced in its Costa Rican factories. Chocolates has made these facilities more efficient, which has helped boost sales of the Costa Rica-made candy. "We increased sales from those factories by 90% last year," says Piedrahita. He says this was possible after Chocolates began using its door-to-door distribution model in Costa Rica. The company wants to increase overseas production in the future through similar acquisitions, focusing in particular on coffee, meat and cookies.

到目前为止，所有收购都由巧克力的资产负债表或银行贷款提供资金。用于购买Galletas Noel的Danone股权的现金，3500万美元从公司的战争胸口出来，而其余的银行贷款供应。截至2005年9月，巧克力只有1400万美元的债务，而股东股权为13亿美元。在今年的前九个月内，该公司报告销售额为9870万美元，其收入同期近三倍于2004年。Piedrahita表示，巧克力计划在未来收购时更加重大借用，以便增加股东权益的回报。

GEA's two other business pillars have undergone similar restructurings. Last year, Bancolombia merged with two members of the GEA group – mortgage provider Conavi and investment bank Corfinsura. As part of the reorganization, Corfinsura spun off some of its operations to insurer Suramericana. The Bancolombia deal is still in its final stages – Londoño carries business cards with logos from all three banks he now heads because the newly merged entity has not yet decided on a corporate image.

Consolidating Construction
GEA also regrouped its construction companies around Cementos Argos last year, scrapping the Cementos del Caribe name. At the end of 2005, seven GEA-controlled cement companies merged to form Cementos Argos, Colombia's biggest company and Latin America's fifth-largest cement producer with a market capitalization of $5.69 billion. This combination came on the heels of Argos' purchase of two concrete companies in the southern US in the second half of 2005 for $450 million. A listing of American Depositary Receipts on the New York Stock Exchange might be the next step for the company, says Botero.

The GEA companies recognize that while they are big fish in Colombia, they are minnows on the global stage. "In 1998, we were 0.65% the size of Citigroup," says Bancolombia's Londoño, comparing his bank to the world's largest by market capitalization. "Today, we're 0.83%. There's been no relative growth. Growth is the most important element of our strategy." But Bancolombia is conservative in its approach to growth, cautions Londoño. "We're looking at growth that produces value. We'll only [make an acquisition] if it's a wise decision – one that goes towards growing shareholder value."

除了这一系列的合并外，GEA还致力于非核心公司 - 包括物流，肥料和木炭公司 - 并卸下一些资产。本集团于2005年第一季度以3季度为美国烟草公司烟草公司烟草巨头紫杉木销售.Piedrahita表示，该公司也在仔细考虑出售酒店链，并考虑纺织公司Coltejer Public。

由于小组的规模，这些变化不仅会影响GEA，还会影响整个国家。GEA公司的年销售额等于哥伦比亚1180亿美元GDP的几个百分点。GEA的八家上市公司的市场资本化为203亿美元，占今年年初Bogotá证券交易所上市的所有公司价值的45％。

Their gains helped Colombia's key IGBC index, which jumped 129% in dollar terms last year, turn in the best performance out of all Latin American stock indices in 2005. "If you want exposure to Colombia, you need exposure to GEA," says Botero of Corredores Associados. Pension funds that benefit from obligatory contributions from workers have been driving that advance, investing 14% of their portfolios in equities. Normally Latin American pension funds are more conservative than these Colombian funds, opting to invest most or all of their cash in fixed-income.

今年,哥伦比亚将重复其4%的GDP growth, Correval, a Bogotá brokerage, says in its annual survey of the Colombian economy. The brokerage believes most of the drivers behind last year's stock performance should continue this year – pension fund portfolio investments in the IGBC are expected to grow at a rate similar to the 33.2% expansion seen in 2005. Even though presidential elections are due in May, investors and business leaders are confident that President Álvaro Uribe will easily win reelection to a second four-year term. "The economic dynamic will continue," says Botero. "There's a lot of confidence, and international players – such as Wal-Mart, Falabella, Zara and Burger King – are looking to get into Colombia." As these companies and investors seek to capture some of the returns of the Colombian market, they'll be eyeing GEA companies.

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So Near, Yet So Far

SABMiller's purchase of Colombian brewer Bavaria naturally raises the question of whether parts of Colombian conglomerate GEA might be up for sale. "I doubt it," answers Carlos Piedrahita, president of Nacional de Chocolates, GEA's food business. "We've received offers from Hershey's, Cadbury's, Kraft, Nestlé and others. We've talked it over with our executive committee and investors, and decided 'no'," he says. Jorge Londoño, president of financial group Bancolombia, also a GEA company, agrees that asset sales are highly unlikely, especially since no single family owns all of GEA. "Unfortunately, I am not a majority shareholder," he says with a wry smile. "No one who owns [Bancolombia] shares is looking to redeem their investment."

毛里西奥·博罗德（Mauricio Botero）的Corredores Assodiasdos，一个Bogotá经纪人，虽然每个GEA公司在每个GEA公司拥有10％-15％的Medellín家庭，但他们分享了本集团的独立增长哲学。然而，他承认，对哥伦比亚不断增长经济的外国胃口可能会引发销售。“你可以看看墨西哥的Banamex的案例，其中一个由一个大型外国银行购买了一个保守的传统银行，”他说，在2001年的Citigroup的125亿美元购买了125亿美元。一天，a全球公司可能会提出类似的报价，GEA公司股东将无法拒绝。