John C. Ickis
INCAE Business School Costa Rica
By the end of 2004, Pantaleón was the most important sugar producing and exporting company in Guatemala and Central America. Its operations spanned the whole production process, from sugar cane sowing and harvesting to the elaboration and packing of finished products sold both at domestic and international markets. Its market share in Guatemala amounted to 23% and, during the harvest season, the company employed over 12,000 people. Exports were bound to Korea, Russia, the United States, Canada, Malaysia, Haiti, Bulgaria and Chile, among other countries.
For over 30 years, Pantaleón had been a leading sugar company and a driver of Corporate Social Responsibility initiatives. Its chairman, Julio Herrera, and his executive team, including Corporate Human Resources manager, Fausto Chicas, had developed a social interest that went beyond corporate boundaries to reach out to the community and the nation at large. Since 1990, Pantaleon´s management invested in projects aimed at the communities surrounding the mill, featuring educational, health-related and environmental programs. It collaborated with Fundazúcar in efforts targeted at the surrounding communities and it supported Pantaleón Foundation in social undertakings focused on the communities where company workers lived. Several social programs were jointly implemented.
These activities reinforced Pantaleón’s corporate strategy, effectively pursuing infrastructure and agricultural practice updating, vertical integration, internal and regional expansion of productive capacity and markets. The company had managed to improve labor conditions, increase its productivity, become a more competitive company both domestically and regionally, and support family members and nearby communities. Its corporate social responsibility philosophy also reflected on its relationships with internal clients, suppliers, consumers, communities, society and the environment.
This case intends to introduce some notions associated with social private companies’ social endeavors and the links connecting these programs with their competitive strategies.