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Francisco Camacho, corporate director of Femsa: "Our intention is for Oxxo to continue growing in Latin America"

2023-02-21T10:56:39.278Z


The company will sell its Heineken shares in a maximum of three years to allocate these resources to continue the expansion of its Oxxo, Oxxo Gas stores, pharmacies and digital services


Francisco Camacho during a corporate event in London, in 2016. Jason Alden (Bloomberg)

After more than a century of history in the beer business, Femsa will leave this sector to focus on its brightest sectors: remaining the largest bottler of Coca-Cola in the world, growing its Oxxo and Oxxo Gas retail stores as

well

as

such as their pharmacies and finally, consolidate digital services.

The company announced last week that it would put up for sale its remaining 14.8% stake in Heineken, after 13 years as a partner in the world's second-biggest brewer.

After announcing its decision, Heineken bought a first package of shares for a value of 1,000 million dollars from Femsa, after the Coca-Cola bottler launched a sale of part of its participation in the Dutch group, valued at 3,900 million of dollars

Francisco Camacho, Femsa's corporate director, explains that the planned divestment within an expected period of 24 to 36 months is the result of a strategic analysis carried out in 2022. "We realized that our main businesses, that is, the

retail

, the Oxxo stores in their different formats, Oxxo Gas, our fuel store and pharmacies, generated significant forward growth.

The other one was clearly Coca-Cola and then geographically Mexico is our main country and Latin America continues to be predominant in the future”, he says.

“Going forward, our intention is to participate in companies in which we control the assets, which is not the case with Heineken.

That has nothing to do with the fact that Heineken is a very well managed company, that we have, over the years, been happy with this investment, but yes, our strategy is to participate in companies where we control the assets”, he adds. .

Although the manager declined to make a forecast of the total value that the transaction will have for 14.8% of his shares in the brewery, he has acknowledged that they have had a good response in the market, and he does not even rule out that the divestment process is faster. than expected.

“It is a possibility, but it is an important percentage, we have to do it carefully, taking care of our investment and also taking care that the market does not react negatively, because the value of the Heineken share is also involved”, he settles.

With the resources that will be obtained from this divestment, Femsa will grow its verticals, mainly in Oxxo stores.

“Each year over time we have invested around 1.5 trillion dollars in Mexico and Latin America.

Today we have around 20,000 Oxxo stores in Mexico.

Our intention is to continue growing at a rate of between 800 and a thousand stores per year and in the rest of Latin America our intention is to continue growing in countries like Colombia and Brazil”, he mentioned.

In pharmacies, the company now has 4,000 stores, mainly in Chile, but they are also looking to grow the points of sale in Mexico, Colombia and Ecuador.

"There are possibilities to grow our market share significantly, particularly in Mexico, the number of stores will be 200 to 400 more stores per year," he says.

If 132 years ago beer was the pillar on which Femsa forged its business empire, now it will be

retail,

the bottling of Coca Cola and digital services through its services such as an electronic

wallet

or purse through products such as Spin.

Also included in this digital revolution is its Oxxo Smart format, the first completely digital and unstaffed convenience store at the Tec de Monterrey university in northern Mexico.

However, the company's turnaround will also involve divesting from other lines of business, in this case Camacho eventually acknowledges that they are looking to divest their US logistics business, Envoy Solutions, while their logistics business in Mexico and Latin America there is part that they are complements of their own businesses for what they are still analyzing the alternatives.

“We will look for some kind of exit through a partner that acquires the assets or something that is hybrid, because there are businesses that are

core

enablers for the businesses that we have.

In short, it is an exercise that we will take with due responsibility ”, he adds.

In a regional environment with high inflation rates and a loss in the value of consumer purchasing power, the manager is confident that he will be able to overcome this complex horizon.

“We know that in Latin America or in the big cities where we operate, there is always a certain level of volatility, every year, in one place, sometimes in another place, at another time, and our operators are very good in such environments.

So, 2023 will be a difficult year in some geographies, but we, first of all, are good operators, our people in each market know what to do and what decisions they have to make and 2023 will be a year that we will have to grow." , he concludes.

The former brewery is today a bottler, gas station and, increasingly, a large retail grocer.

The transformation of the Oxxo stores has gone from selling milk and eggs to receiving remittances.

Currently, with a network of more than 20,000 in Mexico and within a maximum period of three years, the brewery that began more than a century ago in the industrial city of Monterrey, with 70 workers, is about to embark on a new business path.

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Source: elparis

All news articles on 2023-02-21

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