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Indulac: Diversification Leads To Growth


July 18, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

Industria Lechera de Puerto Rico Inc. (Indulac) reported impressive growth from 1999 to 2000, when its revenue increased a whopping 58.35%. The company is set to grow even more as it concentrates on acquiring the latest technology to diversify its products and increase the markets it serves.

Indulac ranks 143rd on the CARIBBEAN BUSINESS list of Top 300 locally owned companies, with 2000 revenue of $33.4 million. In 1999 the company ranked 205th.

"Indulac is a private, for-profit corporation created under a special law in 1962 which makes it tax-exempt. It was created in 1957, but in 1962 it was bought by the local milk industry, meaning dairy farmers," explained President Juan Albelo. "All the profits made by Indulac go back to the dairy farmers."

The company started by producing powdered milk and cheese. Nowadays, Indulac processes surplus milk to produce UHT (ultra-high temperature) milk and cheese, both under its own name and under the private labels of its supermarket and food-distributor clients. Indulac has 80% of the market for UHT milk in Puerto Rico, including the private labels. In the near future it hopes to produce evaporated milk for U.S. mainland supermarket chains such as Kroger’s and Wegman’s.

"We also produce cheese for private labels such as Borden for Premium Brands, Food Club for Pueblo Supermarkets, Supreme for Jose Santiago Inc., and Milky and Happy Cow for the Women, Infants, and Children (WIC) Program, for which we produce UHT and evaporated milk as well," said Albelo.

There is one problem with relying on dairy products to keep the company going: Cows produce less milk from August to November, when Indulac is forced to shut down. In order to avoid shutting down, Albelo has concentrated on expanding Indulac’s offerings, venturing into broths, soups, and more.

Technology allows more than milk

To make the plant productive year-round, Indulac recently contracted with JCS Controls Inc. for advanced control systems which will allow it to produce different food items at the same time. Its Hato Rey plant has four lines dedicated solely to the production and aseptic packaging of UHT milk. Upon completion of the JCS project, Indulac will be able to concurrently produce and package broths, soups, and milks.

Albelo is proud to announce that this new technology. It has added processing flexibility as well as production capacity, tighter quality controls, and increased process integrity.

"We’re going to be producing chicken broth, beef broth, and vegetable broth, mostly for export to the U.S. mainland market, under private labels for supermarket chains," said Albelo, who noted that these broths have a shelf life of 18 months thanks to their aseptic packaging.

Indulac currently produces 99% fat-free chicken broth under the Holiday Fare brand. "We are looking at the possibility of developing this broth for the local market," said Albelo, "though we would make it more flavorful for local tastes. We are also thinking of producing tomato soup, cream of mushroom, and other soups for the U.S. market."

Albelo hopes Indulac can benefit from announced government tax incentives for companies that export locally manufactured items. The company also plans to improve the efficiency of its operations by investing $10 million to construct a 150,000-square-foot warehouse in Toa Baja’s Campanilla sector. The new building, which is expected to be operational next July, would replace two existing warehouses.

Bidding to protect the local dairy industry

The government sought Indulac’s feedback on the local dairy industry, said Albelo, and how it might be affected by the sale of Suiza Dairy, a locally owned producer of fresh milk. There are already companies, foreign and local, competing to purchase Suiza Dairy. Indulac is one of them.

"The local dairy farmers are worried that if a foreign entity buys Suiza Dairy, it may use the company to import products from other countries instead of supporting local production. This could destroy our industry and leave more than 10,000 people jobless," warned Albelo, who noted that the local milk market produces an average of 300 million quarts of milk per year, which translates into about $300 million in annual sales.


President: Juan Albelo

Type of Business: Food products manufacturer

Founded: 1957

Employees: 156

2000 Revenue: $33.4 million

Rank in Top 300: 143

This Caribbean Business article appears courtesy of Casiano Communications.
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