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Lala-Dos Pinos dairy war heats up

Monday, June 19, 2017

The region’s dairy war is heating up, with an investment announced last month of $30 million in a Guatemalan facility for the production of milk, ice cream and other dairy products by Latin America’s biggest dairy company, Mexico-based Grupo Lala.

Meanwhile, both Lala and Costa Rica’s Dos Pinos, invested in Nicaragua last year.

As far as Lala is concerned, the new plant, located in Esquintla, 50 kilometers southwest of Guatemala City, is expected to be operational in the first quarter of 2018, with a monthly output of up to 5,000 tons.

Last July, Grupo Lala entered into agreements with the farming cooperative Coopeleche, and the beverage company Florida Bebidas, S.A., both of Costa Rica, which would provide raw milk and local distribution for dairy products, respectively.

As part of its agreement, Florida Bebidas sold Grupo Lala a dairy-products plant in San Ramón, 50 kilometers northwest of San José, the capital.

In January 2016 Lala reached an agreement to acquire Nicaraguan dairy company Productos Lácteos La Perfecta, which produces and sells milk, dairy products and juices in Central America, with annual sales of $46 million.

A year earlier, Lala bought Nicaragua’s Eskimo S.A., which produces ice cream, milk, yogurt and juices.

Founded in 1950, Grupo Lala has 12 principal production facilities and thousands of points ot distribution in Mexico.

The corporate entity, LALA S.A.B. de C.V., whose stock trades on the Mexican stock exchange as LALA B, had 2016 earnings of $800 mllion from sales of $3 billion.

In Mexico, Lala produces around 3 billion liters of milk annually.

Meanwhile, Costa Rica’s Cooperativa de Productores de Leche R.L., better known as the Dos Pinos cooperative, in 2016 acquired Nicaraguan dairy producer Productos Lacteos La Completa, S.A. for an undisclosed amount.

Dos Pinos is the biggest Central American-based dairy producer, with 2016 revenue of $1 billion.