Mexican dairy company Grupo Lala has announced that it will end operations in Costa Rica as it aims to refocus on key markets and increase profitability.
The closure of Lala’s Costa Rica operation – which includes one production plant, one distribution centre and 12 distribution routes – will be effective on 11 December.
The move is expected to have a $3 million favourable impact on 2021 full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) for Lala’s Central American business.
Commenting on the decision, Lala CEO Arquímedes Celis said: “After a detailed analysis and review of Lala’s Costa Rica operation, we determined that related resources and focus are better allocated towards stronger paths to profitability and shareholder value within the company, while we also remain focused on ensuring that all of Lala’s businesses achieve performance targets closely aligned with our goals and expectations.
“Moreover, the capital freed up with this closure will be reallocated to our businesses in Nicaragua and Guatemala where there is more potential to achieve sustainable and profitable growth.”
The closure will result in an MXN 126 million ($6.4 million approx.) impact on Grupo Lala’s EBITDA and MXN 480 million ($24.2 million approx.) impact on net income for Q4 2020.
At the end of last year, Grupo Lala announced that its CEO Mauricio Leyva was stepping down, and said that the company’s results for the fiscal year had “fallen short of stated goals and objectives”.
© FoodBev Media Ltd 2020
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