International Coatings Scene
LATIN AMERICA
BY CHARLES W. THURSTON
LATIN AMERICAN CORRESPONDENT
THURSTONCW@RODPUB.COM
IFC considers $10 million for
Guatemala’s Lapco
Guatemala’s
Lapco set to
expand in
Latin America.
The World Bank’s investment arm, the International Finance Corp., is only a few weeks away from deciding whether
to invest $10 million in Guatemala’s largest
paint manufacturer, Latin American Paint
Co., or Lapco, for the construction of a larger
facility in Escuintla, according to a spokeswoman for IFC in Washington. If so, production is expected to increase by 30 percent to
20 million gallons as a first stage of modular
expansion, said Yara Argueta, the CEO of
Lapco, which is a unit of Grupo Solid.
Replacing the Villa Nueva plant, near
Guatemala City, in the more industrial town
of Escuintla, and nearer to the port of San
Jose, is the first goal of the IFC funding,
according to Argueta. The second goal is to
increase capacity, which is already being
considered at a level of 25 million gallons per
year in a later expansion phase. The third
goal of the new facility project is a greater
level of automation. New equipment from
Germany, Brazil and perhaps Singapore will
be included in the new plant.
Apart from greater volumes, Lapco plans
to diversify production and pursue more
niche opportunities. A greater presence in
automotive and wood coatings, as well as
sales of paint-related products including
brushes, solvents and other hardware is
part of the plan. The company also hopes to
produce latex resins in addition to the current production of alkyd feedstock.
Lapco already produces twice what the
Guatemalan market consumes in terms of
paint, so exports are key to the company’s
strategy to growth. With over 6,000 points of
sale, the company’s distribution network in
Central America is expected to be strengthened through the loan as well. The company
has offices in Costa Rica, El Salvador,
Honduras, Panama and Nicaragua, apart
from Guatemala. Newer country targets
include Colombia, Cuba, Mexico, Peru and
Puerto Rico. With approximately $100 million in sales, Lapco controls about a third of
the Central American paint market, according to Argueta. “Over the past year our
regional market share has increased, but
because most of these companies are privately owned, the numbers are difficult to
confirm,” she said.
As part of the deal, Lapco will develop a
decommissioning plan for the existing Villa
Nueva plant. Lapco also will implement a
comprehensive plan to handle environmental
and occupational health safety at the new
facility based on ISO 14001 and OSHA 18001
standards. The work will include a new solid
waste plan by end of this year.
Greater proximity to Puerto San Jose, the
largest port on Guatemala’s Pacific coast, also
will improve Lapco’s distribution network from
Escuintla, which is located about halfway
between Guatemala City and the port.
The IFC has been expanding its portfolio
of manufacturing companies recently,
according to Adriana Gomez, a senior communications officer responsible for Latin
America at the organization. Among other
goals in making loans to private companies
in countries like Guatemala are job creation,
general economic improvement, increasing
financial access for small- and medium-sized
companies, and fostering regional trade, she
said. In addition to its direct lending business, IFC also operates it Business Advisory
Service, which helps companies build their
financial profiles and tap global financial
resources, among other activities. CW
