Sweet Calamity

Sep 1, 2001

Argentina may be falling to pieces, but the country's best companies have learned from the decades of experience that with robust balance sheets, international expansion and steady cashflows, they can do more than just survive. Unfortunately, they are a minority.

Quilmes Industrial, the brewer that produces Argentina's favorite beer, is in remarkably good shape. Carlos Olivieri, the company's finance director, says it has achieved this by obsessive attention to financial health and to improving the quality of its beer - thanks to an alliance with Heineken, which holds 15% of Quilmes International, its Bermuda-registered operating company. Olivieri says Quilmes can access rock-bottom financing: "Our cost of capital is 7%, a quarter of the national average. There is no crisis at Quilmes. We are a like an island. No other Argentine company has the same track record as we have. We are 110 years old and no one can remember ever posting losses." The company's solid financials and offshore status have won it an investment grade rating from Fitch. Over the years, the company has expanded into Chile, Uruguay, Paraguay and Bolivia. Revenues from these subsidiaries may be vulnerable to...

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