INSEAD

The Luksic Group: A Chilean Conglomerate in a Global Economy

03/2002-4995

This case was written by Paulina Cuadra, Research Assistant at INSEAD, under the supervision of Lourdes Casanova, Lecturer at INSEAD, and Gonzalo Jiménez, Professor at Universidad Adolfo Ibañez, Chile. We would like to thank the INSEAD MBA participants, Martin de Gooyer, Celeste Hung and Renia Lopez for their collaboration. It is intended to be used as a basis for cass discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It was written using published sources. Copyright © 2002, INSEAD, Fontainebleau, France. N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION.

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A Rocky Start on the Road to Globalization The family business run by the Luksics has enjoyed significant success in its home country of Chile. The firm has holdings in multiple industries, from drinks to copper mining and from dried foods to telecommunications (see Exhibit 1). Their strategy over the years has been to acquire under-valued companies, enhance their assets and sell them for a gain. Despite a string of successful sales (see Exhibit 2), the stock price of Quiñenco1, the quoted holding company 82% owned by the Luksic group, has languished since the initial IPO in July 1997 (see Exhibit 3). Luksic attempted to globalize several times in different industries, but each time the ventures failed (for reasons detailed later). The family business faced opposition because of its history, because analysts criticized its static portfolio, and because it seemed improbable that a global firm could rise out of Chile. But despite their failed attempts, the Luksics were determined that they could globalize, making their investments in the banking industry the flagship venture into global territory. Between 1993 and 1995, the Luksic group allied with the Spanish bank Banco Central Hispano (BCH) in the hope of becoming global strategic partners. First, it merged its banking operations in Chile and Peru and then the rest of the banking assets of both groups. These banks were left under the control of O’Higgins Central Hispano S.A. (OHCH), a holding controlled 50/50 by the Luksic Group and BCH. Quiñenco was in charge of administration and had management control of OHCH S.A. With this joint venture, Quiñenco obtained partial control over the Paraguayan Banco Asunción and the Uruguayan Banco Centro Hispano, both formerly controlled by BCH Moreover, Quiñenco contributed to BCH’s participation in the Chilean Banco de Santiago and Banco O’Higgins. In 1997, the two were merged to form Banco Santiago and became the largest bank in Chile at that time. In November 1998, Banco Santiago sought to go international with the hope of becoming a regional bank. The transaction implied that Banco Santiago would absorb the participation of the OHCH financial conglomerate in Latin America, i.e. at that time, a 100% stake in Banco Tornquist of Argentina, a 88,6% stake in Bancosur of Peru, and a 77,76% stake in Banco Asunción of Paraguay. But there were problems. Chilean and foreign markets discovered that the OHCH holding had overvalued the price of the three banks, affecting not only the shareholders of Banco Santiago but creating a poor market image both for Banco Santiago and Quiñenco.2 According to investment bankers, the price – $425 million – was too high for the shareholders for the combined stakes in Banco Tornquist, Banco de Asunción and Bancosur. The move would have been too risky and complex, putting minority shareholders in a disadvantaged position.

1

The aggregate sales of companies controlled by Quiñenco exceeded US$ 1.6 billion in 2000 (Source: http://www.quinenco.cl/businesses.html).

2

La Tercera December 30, 1998.

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Weeks later, the family was shocked by the surprise announcement that BCH wanted to terminate its relationship with OHCH and planned to merge with Spanish Banco Santander. This created a difficult situation, considering that just as the Luksics were preparing the ground for global expansion the challenge arose so close to home – Banco Santander was its biggest rival in Chile. The two competing firms could not share control of BCH. The options for the Luksics were limited: the family or BCH would have to withdraw from Banco Santiago. Either the family could buy out BCH’s shares in OHCH (valued at US$600 million) and look for another partner, or sell their foreign bank holdings to Santander and leave banking. With the firm’s globalization strategy riding on this advancement, the family could not take any decision lightly. The outcome was a devastating blow for the Luksic group. Quiñenco was pressured to sell its assets in OHCH for $600 million, making a big profit but losing an important asset in the regional financial industry and forcing the group out of Chile’s financial market. It had lost yet another bid for jumpstarting its globalization strategy. Could the firm - which maintained a strong presence in its home country of Chile - recover and pursue global expansion successfully?

Bouncing Back The Luksics still believed that the financial industry was their best bet to enter global markets. Despite the major loss with OHCH, they tried once more. In late 1999, Quiñenco purchased control of Banco de A. Edwards (ranked the sixth largest bank in Chile) by acquiring a 43% stake for US$244 million representing 1.9 times its book value. Quiñenco started purchasing shares in Banco de Chile in October 1999. In March 2001, it increased its interest in Banco de Chile to 52.7% by purchasing additional shares from the Penta Group. The deal was controversial as differential payments were made to majority and minority shareholders, and it occurred just before a new tender offer bill, designed to protect minority shareholders, passed into law.3 Analysts also noted that for the first time the Luksics were ready to pay a premium price (3.7 times the book value) to acquire a stake in a company. Quiñenco’s total investment in Banco de Chile has been approximately US$700 million. On August 7th, 2001, the boards of directors of Banco de Chile and Banco de A. Edwards agreed upon the merger terms – Banco de Chile shareholders would own 66% of the new Banco de Chile and Banco de A. Edwards 34%. This made it possible for the Luksics to create Chile’s largest private sector bank, with around $14 billion in assets, $900 million in capital, controlling about one-fifth of the nation’s US$48 billion loan market. Andrónico Luksic, who runs the family’s financial interests, will be the Vice-Chairman of the merged bank, named Banco de Chile. After three years Quiñenco is back to the top of Chilean’s banking sector. Its financial investments represent 58% of Quiñenco’s assets.

3

LatinFinance February 2001.

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Indeed, at the start of the new millennium, the Luksic group was on the verge of being transformed from a diversified global conglomerate into a financial services holding company with a primary focus on the Chilean market (see Exhibit 4). However, this shift in strategy brought two important new challenges upon the group. • Would the new focus on financial services and Banco de Chile provide the right opportunity for globalization that had eluded the Luksics thus far? Or should the Luksics learn from their previous mis-adventures in globalization and restrict their focus to the Chilean market? • The market was still discounting the stock price of Quiñenco. What adjustments would the family firm have to make to unlock shareholder value in the global economy? How should management styles and organizational processes change to deliver higher performance? The future looked even more challenging for the Luksics than their past.

An Entrepreneurial Past The Luksic family began its first ventures in the Chilean desert, where patriarch Andrónico Luksic bought a mining center and sold it for exponentially more than the original price paid. He subsequently invested those earnings in a variety of businesses, primarily mining and manufacturing services, until the 1960s. This initial success established the Luksic group’s modus operandi: buying companies in financial trouble, rescuing them from the brink, then turning them into profit-making ventures or selling them for a premium price. Exhibit 5 provides a summary of the corporate history of Quiñenco. The political climate had an early impact on the Luksic family. In 1970, they sold precious mining and fishing companies to the government (under President Salvador Allende), a swap for a pass to free-and-clear operations (without state interference). Three years later, General Augusto Pinochet overthrew Allende’s administration in a coup, and the newly installed program of economic liberalization kept the Luksics out of investment circles, locked out of the early deals to privatize government-controlled entities. A twist of economic fate left the Luksics in a good position when the economic recession of the 1980s left many of those early investors hurting. The family had no debt and used cash to grab some of the top Chilean companies of the time at slashed prices. The company began to branch out in the 1990s, moving into neighboring countries like Argentina where it bought a bank, drinks companies and processed-food plants. A dip in profits in 1998 was attributed mainly to the slump in Latin American market after the Asian and Russian crises but Chile and the Luksics were not much affected.4 In Chile, the family’s main holding company, Quiñenco, continued its success with its unique strategy within the local market. The Luksic group approached potential investors by promoting its value as a business group, it’s strong point being: “they know how to do 4

“Strains in Diversity” Institutional Investor, New York, March 1999, Jonathan Kandell, vol 33, issue 3, pp 97-102.

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business.” The group presented itself as a holding controller of companies with value-adding expertise, comprising industrial business know-how and stable management of each owned company for a number of years. However, international analysts viewed the group differently. Despite a highly successful initial IPO (the only Chilean company to raise US$279 million), the international financial markets subsequently battered the Luksic group by continually lowering Quiñenco’s stock value. This was due to several factors. For one, Chile was viewed as a risky nation along with other countries in the region. Also, the conglomerate was punished for its diversified portfolio, which included participation in several different industries. Many international analysts discounted the value of Quiñenco’s stocks because they perceived an inability within the Luksic group to develop new projects and investments. Many still viewed Quiñenco’s structure as a family conglomerate, unresponsive to the challenges faced by a diversified company and unable to confront market globalization. The steep plunge of its stock price after IPO forced Quiñenco to react to the opinions of the international market. The group restructured and hired a professional management team for Quiñenco’s corporate headquarters. The Chairman of the Board of Directors, Guillermo Luksic, defended the company, stating that the reorganization was a reactionary move and that there was no valid foundation for international analysts to discount Quiñenco’s stocks. As the second generation of the family took the helm, Quiñenco implemented a new structure for its headquarters, becoming a business holding (See Exhibit 6). Three new management positions were created: Strategy, Business Development, and Human Resources and Communication. The conglomerate incorporated “top” level professional executives to take charge of all Quiñenco’s management positions. Quiñenco’s new strategy evolved to become based fundamentally on the concept of economic value added and creating value for its shareholders. As stated in Quiñenco S.A. Annual Report 1999, the goal was: “To become the best Chilean entrepreneurial group and one of the most important business conglomerates in Latin America in terms of shareholder returns and the quality of its top executive team.” With top-level executives heading both the holding and the group’s companies, Quiñenco sought credibility from the international financial markets, amplifying its interest in the globalization of the conglomerate. Quiñenco wanted to take advantage of market imperfections, compose a front for multinational corporations aggressively entering Latin America, and benefit from synergies that would enhance the globalization market. The conglomerate characterized its new management era by empowering managers, restructuring its subsidiaries, and changing the Luksic group’s strategy in order to emphasize “real value adding” for the shareholders of Quiñenco.

Building on Connections Expansion - Latin America At the beginning of the 1990’s, a number of Chilean companies aggressively ventured into neighboring countries (Peru, Argentina, Brazil, Paraguay and Colombia) in a strategic move to broaden their business bases. However, few were successful, mainly because they were applying the same strategies they had used in Chile without recognizing the diversity of

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economic systems and markets abroad. Quiñenco’s internationalization process began in early 90’s and by the end of the decade, 24% of Quiñenco’s consolidated assets were in territories outside Chile: Brazil, Argentina and Peru with Madeco S.A., CCU S.A. and Empresas Lucchetti S.A. However, none of the foreign companies had enough power to enable Quiñenco to become a global force. Madeco S.A. Quiñenco first purchased Madeco S.A. in 1983 for $15 million from North American Company General Cable, a U.S. company that chose to leave Chile for political reasons. At the time, North American Company General Cable had lost its monopoly in the sector (the company manufactured copper cables and aluminum, wires, and other products made from copper and aluminum). Through Madeco S.A, Quiñenco strategically expanded throughout South America, becoming a major presence in the non-ferrous metals industry. In 1990, it ventured into Argentina with two major acquisitions. Next came expansion into Peru in 1993, when Luksic purchased Indeco S.A., the biggest cable manufacturer in the country. Three years later, Madeco acquired a 25% share of Peru’s most important manufacturer of packing products, Perúplast S.A., with an exclusive and irrevocable option of acquiring the remaining 75% in 1999. In 1997 acquired FICAP in Brazil. Madeco’s business prospects are affected by the macroeconomic stability and growth of the countries in which it operates. Its main products are cable and wire, mainly copper and aluminum for the telecommunications, construction, energy, and mining industries. The negotiating power of the most important telecommunications customer, Telefonica, increased significantly as it bought large stakes in local telephone companies. The products for the construction, electric power, mining and manufacturing industries, which represent 60% of sales and 62% of operating profits, are basically commodities in nature with little value added. In terms of input costs, copper and aluminum are both commodities, their prices dependent upon world supply and demand factors. Madeco’s EBITDA margins lag behind those of other leading cable producers (in 2000, around 3.2% for Madeco as compared to 16.6% for Condumex of Mexico and 5.6% for Pirelli of Italy). This is partially due to economic instability in Latin America that has resulted in decreased sales volumes for Madeco. Further Madeco’s business profits are dependent upon its cost structure and production efficiency. It has excess production capacity and higher fixed costs than many of its global competitors. Industry analysts believe that the long-term strategic intent of Quiñenco is to divest Madeco. The Luksics are looking for a stronger, more lucrative industry to establish their presence in the global market. CCU The Compañía de Cervecerías Unidas (CCU) is a brewer, bottler, and distributor of beer, soft drinks, and mineral water primarily for the Chilean and Argentine markets and a wine producer for the domestic and export markets. The Luksics purchased CCU in 1986 in partnership with the German brewer, Paulaner Brauerei A.G.5 They paid a total of 5

Paulaner Brauerei A.G. is owned by the Schörghuber Group. In February 2001 Schörghuber announced an association with Heineken, which would give Heineken a 15.4% economic stake in CCU. Quiñenco opposed this association and started legal actions against Schörghuber.

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$14 million for the brewery that had been producing beer since 1902 and had gone bankrupt. This was done with the acquisition of CCU’s foreign debt at a minimum price, given that Chile and the rest of the region was undergoing an economic crisis. Paulaner Brauerei controlled a 50% stake in CCU’s Board of Directors, while the Luksic group controlled the remaining 50%. Two years after the takeover, CCU had become profitable and is currently Chile’s second-largest soft-drinker producer, largest beer producer, third-largest winery, second exporter of wine and largest bottler of mineral water. By 1995, it formed CCU-Argentina, one of the three largest breweries in Argentina with 11% market share. This was mainly due to Budweiser, providing 20% of total sales volume. Total sales of US$77 million from CCU-Argentina represented 13% of the consolidated sales of CCU. As it gained market share in the Argentine market, it acquired and later merged Compañía Industrial Cervecera Salta (CICSA) with Cervecería Santa Fe (CSF). Quiñenco’s investments totaled nearly US$100 million. Anheuser-Busch recently acquired 20% of CCU in stock transactions for US$224 million. The two companies are partners in Argentina where Anheuser-Busch, the world’s largest beer brewing company, owns 11% of CCU’s unit. Anheuser-Busch uses the location for brewing and supplying products for sale in Argentina as well as exporting to Chile and Paraguay. Empresas Lucchetti Quiñenco holds a controlling 93% interest in Lucchetti, the second largest pasta producer in Chile. Lucchetti is devoted to the production and sale of pasta, vegetable oil, and soups. After seeing the potential in its efforts with CCU, Quiñenco planned another bid for globalization that would somewhat mimic its early strategy with CCU in the food manufacturing industry. It planned to become a major player in the Argentine pasta market. For this reason in 1997, Empresas Lucchetti built its own manufacturing plant (production capacity of 26,000 tons) in the Greater Buenos Aires region. Because Lucchetti pasta was already being exported to Argentina, it had a 5.5% market participation as of 1996, an impressive figure considering that the leading Argentinean pasta-producing firm had 10% of the market at that time. Quiñenco also began to distribute pasta through Lucchetti to Peru in 1995. Historically in the Peruvian market, packaged pasta had a small market share, and thus, in 1993, pastas sold by bulk represented 95% of the total sales of pasta in Peru. After a great marketing effort, by the end of the 1995, packaged pasta achieved a 78% market share. The market consolidation that Quiñenco sought came in December 1996, when Lucchetti pasta occupied third place in Peru in terms of net sales. Lucchetti also achieved a solid brand positioning and a market share of 25.3% in Lima, the capital of Peru. Profits in Chile decreased dramatically due to fierce market competition in all product lines. In June of 2001, Empresas Lucchetti sold its Argentine operations to the leading producer, Molinos Río de la Plata, for US$44.7 million. Lucchetti had had low returns for the third consecutive year, and despite seven years in Argentina and 13% of the market, the sale marked a loss of almost US$12 million. The focus then returned to Chile and Peru, where Lucchetti holds 37% and 17% of those respective markets.6 An idea to merge with the Barilla 6

“Chile Lucchetti to sell Argentine business for $44.7 million”, Reuters, Feb. 14, 2001.

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conglomerate from Italy, one of the world’s most important pasta-producing business groups7, fell through. Thus, yet another attempt at globalization by the Luksic Group proved to be a vain struggle. The Old Continent For Quiñenco, investments in Latin America seemed to be paralyzed, but it continued its pursuit of globalization. The Luksic Group decided that its best bet was to enter the European global market through Croatia, a country where the family also had ethnic ties and which it believed could become an open door to the European Union. Therefore, its objective became to create a holding similar to Quiñenco that would manage the group’s companies in Croatia. Quiñenco’s investments in Croatia were in hotels - with control of almost 40% of property assets in Plava Lagoon, the largest hotel chain in Croatia - and in breweries, controlling 34% of Karlovacka Pivovara, the second largest brewery in the Croatian drinks market. Quiñenco believed the Croatian tourist sector would reawaken and become an important industry. Indeed, the Luksic Group submitted a proposal to the Croatian State Government to acquire an important vineyard. According to sources8, the group’s strategy in Croatia was to follow the model developed in Latin America: acquire companies with financial and managerial problems at a cheap price, restructure and consolidate them into large, solid companies. Mapping the Future Despite all its efforts, the performance of Quiñenco’s international companies was not as good as the group had hoped. This was a major point of consideration for the conglomerate’s new management. For example, although Madeco became the largest Latin American company in the production and sales of non-ferrous metals and optic fiber cables, in 1999 it recorded losses of nearly US$90 million. This was mostly due to the low-to-zero growth rate of Latin America’s telecommunications sector during that period. Empresas Lucchetti had a similar experience, reporting losses successively in 1998 and 1999. The markets in Latin America countries were frequently subject to political and economic turmoil, which affected the performance of Quiñenco’s companies. Further, competition from foreign competitors was fierce and put pressure on profitability. For several decades, the Luksics had harbored a fond goal of creating a global firm from local Chilean roots. The path had been arduous and success was still evasive. At the start of the new millennium the time had come for the group’s new management to answer a difficult question: had the time come to give up on the dream of globalization? As part of its corporate refocusing on financial services, Quiñenco had already shed many of its businesses outside Chile. Should Quiñenco go further in shedding foreign operations and restrict its focus to the Chilean domestic market? What were the risks of following such a strategy in the global economy? Then there was the other important question: how could Quiñenco unlock shareholder value? Quiñenco’s stock had been punished extensively on the New York stock exchange. Starting 7

Source: http://www.expansiondirecto.com/latinoamerica/latino3.html (November 17, 2000).

8

El Diario. April 14, 2000.

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from its IPO value of $16.6 in June 1997, it reached its highest point of $16.85 in July 1997 and then had slid steadily downwards, closing in December 2001 at US$7.20. Quiñenco’s management had to answer the important question: what value did they bring to the subsidiary companies in the holding? What synergies existed, if any, across the holding companies? To create shareholder value, management styles also had to change and the whole group had to become more performance orientated. Quiñenco’s purchase of Banco de Chile for a premium price was a far cry from the Luksic family’s traditional business credo: “Money is made when one buys cheap and then sells at a premium price.”9 Was Quiñenco signalling that the time had come to question this buy-cheap-and-sell-premium strategy? If so, management had to be even more critical about the value that they could add as returns would be harder to obtain outside the Luksic’s traditional success formula. Towards the end of the 1990s, management styles were clearly changing. Quiñenco’s new management proved its aggressiveness with the fast purchase of Banco A. Edwards: it took only one weekend to close the agreement and purchase the bank’s stocks. More changes occurred internally, where Quiñenco’s management team developed a series of studies of each company belonging to the holding. The analyses revealed that some of the companies’ capital returns were inferior to their capital costs. Consequently, Quiñenco’s management generated strategies that would allow those companies to improve their performance. The question remained: were these changes enough to compete with other leading global players? What could management learn from the mistakes of the past? Quiñenco’s management claimed that the Luksic group’s competitive advantage was that they “know how to do business” but the question remained if it was a sufficient basis on which to build future economic success.

9

América Economía. November 1997.

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Exhibit 1 Quiñenco S.A.: Holding Structure

The following diagram depicts Quiñenco S.A.’s business structure and companies in its portfolio as of September 2001. Financial Services Full service bank. Quiñenco’s stake 51.2%.

A leading Chilean bank. Quiñenco’s stake 52.7%.

Insurance service. Inversiones Quiñenco’s stake 66.3%. Vita Food and Beverage Beer, wine and beverage products. Quiñenco’s stake 30.8%.

Multinational food company. Quiñenco’s stake 87.0%.

Telecom Telephone provider. Quiñenco’s stake 73.6%.

Long distance and PCS telecom services. Quiñenco’s stake 5.7%.

Manufacturing Manufacturer of copper and non-ferrous metal products. Quiñenco’s stake 56.1%. Real Estate & Hotel Administration Real estate development. Chilean hotel chain. Quiñenco’s stake 50%. Quiñenco’s stake 87.2%. ADR Shareholders NYSE 9%

Luksic Group 82%

Chilean Shareholders 9%

QUIÑENCO S.A.

Manufacturing

Food & Beverage

Telecom

Financial Services

Source: Quiñenco S.A. Annual Report 2000.

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Real Estate & Hotel Administration

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Exhibit 2 Major Sales Within the Luksic Group

Date

Subsidiary/Company Sold

Price Sold (US$m)

18/12/97

VTR’s Startel, a mobile telephone subsidiary.

425

14/10/98

VTR’s Larga Distancia, a long distance telephone subisidiary is sold for US

31/12/98

VTR’s Hipercable, the largest pay television operator

7/04/99

Quiñenco sells Energis

13/04/99

Participation of Quiñenco in OHCH is sold to BSCH

09/00 14/02/01

Net Gain (US$m)

49.9

386.5 27.9

229

138.9

65

12.9

600

280

Quiñenco sells 0.8% of Entel

20

12

Argentina Pasta Unit sold

44.7

Exhibit 3 Quiñenco on Nyse: Share (ADRs) Value (June 1997-December 2001)

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(11.9)

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Exhibit 4 Breakdown of the Luksics Group by Country, by Industry and by Company

Source: Celeste Hung and Martin de Gooyer. INSEAD MBA participants. December 2001.

Percent of assets Croatia Real Estate US$ US$ US$2.1B 2.1B US$2.1B 2.1B 100% Manufacturing Peru Manufacturing Peru

80

Brazil Brazil Argentina Argentina

60 40

Chile

20 0

US$ US$ 2.1B 2.1B

Telecom Telecom

Madeco Madeco Entel Entel

Food & Beverage Beverage

CCU

Financial Financial Services Services

Banco de de Chile Chile Banco Edwards Banco Edwards

By Country

By Industry

By Company

Source: Celeste Hung and Martin de Gooyer. INSEAD MBA participants. December 2001.

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Telsur Telsur Lucchetti Lucchetti

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Exhibit 5 The Corporate History of Quiñenco

Year

Event

1957

Quiñenco is founded as a forestry company

1960

Forestal Colcura is acquired as well as Lucchetti

1970

Hoteles Carrera acquired

1981

Banco O Higgins acquired

1983

Madeco-majority stake acquired

1986

Quiñenco and Paulaner acquired majority stake in CCU

1987

VTR – majority stake acquired

1988

Quiñenco starts purchasing Banco de Santiago shares

1990

Endesa 9.25% stake acquired

1993

Quiñenco and Banco Central Hispano create OHCH

1995

Quiñenco sells 6.2% stake in Endesa; OHCH takes control of Banco Santiago

1997

Quiñenco IPO on NYSE and Bolsa de Santiago

1998

Habitaria is created in association with Constructora Ferrovial de Espana

1999

Quiñenco acquires 51.2% of Banco Edwards; Quiñenco acquires 8% of Banco de Chile; Quiñenco sells Enersis; Buys 14.3% of Entel. Quiñenco takes 100% control of VTR.

2000

Agreement to acquire controlling interest in Banco de Chile; Creation of Inversiones Vita

2001

Argentina Pasta Unit sold; 25% stake in Ficap Optel sold to Corning for US$20m. 8% of Entel shares sold. Completes acquisition of Banco de Chile (52.7%)

Source: Quiñenco S.A. Annual Report 2000.

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Exhibit 6 Quiñenco S. A.: Management Team

Management Team Board of Directors

CEO Francisco Pérez Mackenna Business Administrator, Catholic University of Chile MBA, University of Chicago, EEUU

Strategy & Performance Appraisal

Business Development

Human Resources

Luis Herman Paùl Fresno Civil Engineer, Catholic University of Chile MBA, Massachusetts Institute of Technology, EEUU

Felipe Joannon Vergara Business Administrator, Catholic University of Chile MBA, The Wharton School, University of Pennsylvania, EEUU

Sergio Cavagnaro Santa Maria Industrial Civil Engineer, Catholic University of Chile DPA, Adolfo Ibañez University

Finance and Administration

Legal Cousel

Luis Fernando Antùnez Bories Industrial Civil Engineer, Catholic University of Chile MBA, Georgia State University, EEUU

Manuel José Noguera Eyzaguirre Attorney, Catholic University of Chile

Source: Quiñenco S.A. Annual Report 2000.

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