Rebuilding a nation

Steve Ennen, Editor

A resurgent El Salvador creates a tasty environment for food companies

A man, guitar in hand, emerges peacefully from a jungle canopy. Along the road, women in the shade of palm lean-tos sell coconuts to passing traffic. Nearby, armed guards patrol Mister Donuts, gas stations, strip malls and Wendy's.

El Salvador is a lush, tropical nation of beautiful people overcoming the ugliness of civil war. Yet this contrast is its strength. Its people are dedicated to learning from the past and are passionate about building their future.

The former Cold War battleground now boasts the most stable economy in Central America, and is working feverishly to make its location palatable to food processing companies.

"We are a country learning to live in peace," Guillermo Valiente, Investment Promotion Manager for Proesa, the country's economic development entity, aptly observes.

And by all accounts, they are learning this new way of life quite well.

Proesa, under the direct supervision of El Salvador's Vice President Carlos Quintanilla, is scripting an action plan for growth -- one that offers tantalizing enticements for investment, fertile grounds for agribusiness, and a dedicated workforce.

 "We see ourselves as a government that facilitates investment," Vice President Quintanilla told Food Processing during a November meeting at the presidential palace in San Salvador. "Many potential investors do not know about El Salvador. They still believe this is a country of war. They do not know El Salvador has, for years, been the most economically stable country in Central America."

The country's fertile volcanic soil has always been a draw for agribusiness trade, but the current climate, both economically and topographically speaking, is ripe for business as well as sugar, coffee, and fruits.

"Since the peace accord was signed in 1992, El Salvador has been changing with its reconciliation process," continues Vice President Quintanilla, "and that has allowed us to maintain a stability not only on the economic side, but also on the social and political sides. Investors have a guarantee of stability. We are the fourth consecutive government here and we are every day growing with no inflation, no devaluation. We believe that the climate is a proper business climate for obtaining investors."

"Politically we have grown a lot," adds Jose Carlos Bonilla, president of Embotelladora Salvadorena, the Central American operations hub of Coca-Cola "It has been one of the most successful rebuilding stories of the last century."

Indeed, El Salvador has garnered some impressive recognition for its efforts.

"El Salvador has been cited as the model for conflict resolution by the United Nations," says Beatriz Peralta Avalos, executive director of Proesa and a graduate of the University of Pennsylvania's Wharton School of Business. "In the decade following the ,'92 peace accord, the country has enjoyed the second highest rate of economic growth in Central America, following only Chile."

Green lands and greenbacks

In January 2001, the country dollarized its economy and privatized its infrastructure -- stabilizing the foundation of commerce and trade.

"Dollarization helped two things," explains Bonilla. "It lowers the lending interest rates, lowering the cost of capital, and gives comfort to the foreign investors who come here. It's made our country more attractive to foreign investors."

Sr. Bonilla's point is accentuated by the fact that Proesa has been successful in attracting 65 companies from across the globe to the country in recent years. Late in 2002, Spain's Grupo Calvo, one of the world's top tuna producers, agreed to begin construction of a fishing/production facility that is estimated to bring $39 million in immediate revenue to the local economy.

Like any culture, the more the differences are understood, the more they seem similar. El Salvador is, in many ways, like its northern neighbor. Through freedom comes prosperity. But it takes some getting used to.

"Making the transition from war to peace is very difficult," says Miguel Lacayo, El Salvador's Stanford-educated Minster of Economy. "But we believe in the same values as the United States. Democracy implies responsibility, and there is a link between liberty, democracy and development."

La Constancia, S.A. Brewery   High-tech has certainly made its way to El Salvador. La Constancia, S.A. Brewery is completely automated through a newly installed Ziemann operations system. The plant went on line in 1995, and a completely automated filtration system was added in 2002. The bottler of Cerveza Pilsener, Cerveza Premier and other beverages now produces 1.4 million hectoliters per year, much of which makes it to U.S. markets.   The facility recently installed 12 uni-tanks, each insulated with an ammonia jacket and able to hold 3,600 hectoliters (six brews each). "Fermentation and storage takes place in the same tank," says Carlos Manuel Roca Molina, production manager. The beer remains in the tanks for about 20 days.    "It's very good for the quality because you don't have to move it very often," Molina says.   "Three bottling lines, made of Klockner Holstein and Steitz  and installed in 1996 fill cans liters and the 12-oz. 10 hours per batch and six batches or brews per day   The brewery also installed a new malt milling system, and a fully integrated Buhler control system monitors the entire process with up-to-the-second temperature readouts and adjustments.