- Category: Business
- Published on Tuesday, July 12 2011 10:50
- Written by Rod Hughes
- Hits: 643
State-owned companies losing money here is hardly news but the decline of FANAL, the National Liquor Factory, is notable for its quick recovery. For two years the company bled red ink by bucketfuls until administrator Eulogio Dominguez took over last January.
As reported here (see past articles) sales have been brisk this year. Dominguez told the business newspaper El Financiero this week how he performed his magic.
The situation was grave when the new administrator had taken over. In the 2009-10 period, sales had fallen by a catastrophic 50%. But Dominguez says FANAL will probably top 416,000 cases sold by the end of this year.
What he found was a dismal situation in distribution. He quickly ordered a review of contracts with suppliers, control of contraband and sought new markets, notably export to China and Panama.
Back as far as May 2010, the Comptroller General's office had warned FANAL of complete chaos in its accounting. The board of directors fired then-administrator Claudio Aguilar, replacing him with Jorge Arozco of the National Production Council.
But it was not until the dynamic Dominguez took the reins that things began to move. He began to improve the brands' position in sales outlets and began to contract wholesalers in distribution. The latter move resulted in the cancellation of a contract with Ciamesa (part of Grupo Constenla) which had reported low 2010 sales and ended up with an inventory surplus that year.
But Dominguez is not finished opening new markets--buyers in Russia and the Czech Republic have contacted Fanal, interested in buying low-priced rum from the company.