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Wal-Mart Sets The Stage For P.R. Exports Stateside
Initiative to export rice from Cataño-based Pan American Grain to stores in Florida may open the gates to other chains on the island to do the same
BY Marialba Martinez
November 1, 2001
Wal-Marts initiative to export rice from one of its more than forty local suppliers to some 100 stores in Florida may open the floodgates for other multinational chain stores in Puerto Rico to do the same.
By placing its first 120,000-pound order of Arroz Rico from Pan American Grain, Wal-Mart already increased the rice providers production by 10%.
"This first order from Wal-Mart increases our target market population from 3.8 million in Puerto Rico to 18 million in Florida. In five years, with the soon-to-begin $12 million expansion of our Cataño facility, we expect 60% of our production to be sold stateside and 40% in Puerto Rico," said Jose Gonzalez Freyre, president of Pan American Grain.
Pan American Grain, soon to begin the expansion of its $12 million Cataño headquarters, has been selling its Arroz Rico since 1992, first to Wal-Mart subsidiary Sams and later on at the local Wal-Mart stores. The companys expansion will eventually lead to 80 additional jobs to its 300-employee work force, which includes a third shift of 20 employees begun a month ago.
Pan Pepin, La Famosa, Indulac, and Lanco are a few Puerto Rico companies that do business with the retailer, some even producing brand-name products for local sale. Pan American Grain has provided Wal-Mart with its brand name rice, Great Value, for sale in Puerto Rico.
"We are excited about the opportunity for Wal-Mart to become an integral part of Puerto Ricos economy, influencing it positively and raising the standard of living by creating jobs. It is the right thing to do for Puerto Rico and for our customers," said Bill Cahill, president of Wal-Mart Puerto Rico Inc.
Wal-Mart Corporate Affairs Director Federico Gonzalez Denton believes that purchasing locally manufactured products will give an outlet for the local supplier to reach a larger consumer base. This also sets the stage for the upcoming meeting of the Wal-Mart Global Sourcing Teams (GST) visit with 20 Puerto Rico manufacturers.
"Wal-Marts GST is led by the companys former merchandising president John Ryan," said Gonzalez Denton. "The Wal-Mart team will meet [this week] with 20 local suppliers, to explore opportunities for other products to be sold by Wal-Mart stores depending on the companys global needs."
Some of the suppliers in this group participated in the first Manufacturing Fair of Puerto Rican Products held in the Capitols rotunda last August. The activity was organized by House Vice President Ferdinand Perez Roman and the Puerto Rico Products Association, and will be repeated before the end of the year to encourage both public and private sector purchases of Puerto Rican goods.
One government official who is extremely pleased with this initial venture is Puerto Rico Industrial Development Co. (Pridco) Executive Director William Riefkohl. During a CARIBBEAN BUSINESS interview (CB Aug. 16), he announced his intent to encourage multinational and foreign companies doing business in Puerto Rico to export locally manufactured products.
"Wal-Mart has opened the door in this initiative to boost exports of Puerto Rican products. In the past weeks, several chain stores have approached Pridco requesting information about our new tax incentives on local exports with a distinct global distribution objective. And its part of Gov. Calderons initiative to boost sales by local companies," said Riefkohl.
This Caribbean Business article appears courtesy of Casiano Communications.