SILVER CROSS FOR SUSTAINABILITY

Colombia 2018 | ECONOMY | INTERVIEW

TBY talks to Carlos Ignacio Gallego Palacio, CEO of Grupo Nutresa, on the strength of purely organic growth, harnessing the right business model, and making sustainability central to all expansion.

 Carlos Ignacio Gallego Palacio
BIOGRAPHY
Carlos Ignacio Gallego Palacio has over 20 years of experience within Grupo Nutresa. His previous roles include president of Servicios Nutresa, director general of Fundacion Nutresa, and president of the chocolate business of Chocolates Grupo Nutresa. He received his bachelor's in civil engineering and a master’s in administration from Universidad EAFIT.

What did the Nutresa Group achieve in 2017?

Nutresa is a Latin American-wide company with direct activities in 14 countries and sales in 75 around the world. In 2017, the group had a less dynamic consumption but gradually recovered toward the end of the year. Real household expenditure also gradually recovered, as did consumer confidence. Nutresa had a good year; it grew 2.5% in sales in Colombia, reaching COP5.5 billion. In the international market, we grew 5.7% in dollar terms. This growth was organic and does not include any acquisitions. Altogether, we reached total sales of COP8.7 billion and profitability of COP1.04 billion, or a margin of 12%, which was our goal. The growth of exports from Colombia was significant in achieving this, and we grew 19.4% in dollar terms in this sector. However, innovation was also important. Of the total sales of Nutresa in 2017, 20.2% were in innovation—products that did not exist three years ago. From a growth in sales and profitability perspective, it was a good year. We had a stronger commercial dynamic outside of Colombia, but there were positive figures in both markets. 2018 should see even greater growth and profitability. Nutresa also continued to be a leading global company in sustainability; we were part of the Dow Jones Sustainability Index for the seventh consecutive year and went Silver Class for the fourth time.

What has allowed you to have this growth?

We have the right business model and strategy. Our business model has three main pillars. First are the people. We work with good people, develop local talent, and invest in human capital in every country in which we operate. The second are the brands. We look for local, strong, and appreciated brands and try to have the best relationship between price and perceived value. The third is our distribution capacity and the ability to deliver the entire value offer. Nutresa has a sustainable and effective innovation frame, to which we added the productivity frame this year. With sustainability, we guarantee results in the medium and long term and work to generate economic, social, and environmental development. The innovation frame also allows us to question what we do to improve processes and products, while the productivity frame help us to make efficient use of all our resources.

How is Nutresa committed to Colombia's development?

At Nutresa, sustainability is not something isolated from the strategy but central to it. We analyze materiality. We care about knowing the related groups and their expectations and needs before integrating this knowledge into the priorities of the company. In addition, we analyze risks and opportunities. When we do these, we set six priorities related to sustainable development and make plans that allow the company to develop and simultaneously contribute to the achievement of these goals. Because of this, we have extensive supplier development projects such as inclusive projects related to cocoa. Speaking of eco-efficiency, we have goals to reduce energy consumption per ton produced, not to mention water and carbon emission. These are our goals for 2020 and are aggressive, but we have made impressive progress. The plan was to reduce greenhouse gases by 33% by 2020, and we have already reached our 10-year goal. For each ton produced, we have 41.4% fewer greenhouse gases. We want to reduce energy consumption by 25% in those 10 years, and have already done so by 17.3%. From the original goal of reducing water consumption by 30%, we have already lowered it by 28.1%.

How will you maintain productivity and growth while lowering your energy consumption?

We have many environmental efforts that are also productivity challenges. If through the redesign of processes, technology, and training we can be more efficient and use resources better, we will improve our competitiveness and lower our environmental impact. There is a lot of human effort and innovation behind these projects.