Company To Watch: Alfa / Mexico


By Gordon Platt

Monterrey-based Alfa, one of Mexico’s largest industrial groups, has four business lines, comprising petrochemicals, aluminum auto parts, processed food and telecommunications.

Earlier this year it became the sole shareholder of Mexican telecom Alestra with the purchase of AT&T;’s 49% stake. Alestra provides telephone, Internet and data services to corporate customers.

Alfa tripled its earnings in the second quarter, as its petrochemical unit, Alpek, benefited from China’s increased demand for polyester and nylon. In October 2010, Alfa boosted its US presence with the purchase of three petrochemical plants in South Carolina from Eastman Chemical for about $600 million. In August 2011, Alfa acquired a PET production facility in Mississippi from Wellman. PET resin is used to make plastic drinks bottles, as well as other consumer product packaging.

Alfa is Mexico’s leading producer of processed meats and cheese through its Sigma Alimentos unit. In September 2011, Alfa bought Braedt, one of Peru’s largest meat products companies, which has a plant in Lima. Last year Alfa purchased US firm Bar-S Foods.

Alfa is about to open a plant in India to supply auto parts to Ford Motor. It already has a plant that makes engine heads in China.

Its subsidiary, autoparts maker Nemak, refinanced a $1.15 billion loan in August to prepay existing debt. It said the deal was the largest syndicated loan arranged by a private sector company in Mexico this year. Alfa shares are quoted on the Mexican Stock Exchange and Latibex, the Latin American market of the Madrid Stock Exchange.