News banner image

News

Helping companies in Latin America and the Caribbean grow their business

Diagnostic tool offers business consultancy, solutions for small and medium-sized companies

Three years ago Productos Ujarrás—a well-known family owned Costa Rican company that produces and exports tropical fruit paste, jelly, and jam—was facing several production delays and production bottlenecks.

The situation changed after the company participated in the FINPYME program of the Inter-American Investment Corporation (IIC), an institution affiliated with the Inter-American Development Bank (IDB). FINPYME is a diagnostic tool designed to help small and medium-size enterprises (SMEs) become more competitive and make it easier for them to access longer-term financing. Once a review is conducted, the program helps a company devise and implement a plan to address the problems revealed through the diagnostic process.

Thanks to this program, Ujarrás was able to identify which critical areas needed expansion, improve its production and environmental management, and reorganize production processes to eliminate bottlenecks and delays.

In addition, the IIC approved a $100,000 loan in March 2009 to finance Ujarrás’ plan to increase its production and expand the capacity of its plant, which in turn paved the way for the company to get term financing from other financial institutions. The IIC, which specializes in lending to small and medium-sized enterprises, is one of the four private sector windows of the IDB.

“The diagnosis undoubtedly put on the table the major areas of improvement that the company had to undertake in order to enhance its competitiveness in the country,’’ said Edgardo Rodríguez Soto, Ujarrás’ owner and general manager. The company, founded in 1962, directly employs 40 people, and buys fresh fruit from small growers throughout Costa Rica to make its products.

Ujarrás redesigned its plant to improve production capacity and increase bottling and shipping speed. This was needed to reduce waste. In addition, it hired a financial manager to help control costs and manage the company’s financing needs to upgrade production. As a result of the diagnostic and the implementation of a competitive improvement plan, Ujarrás’ sales increased by 31 percent in 2009.

Ujarrás, with technical assistance from the IIC, is currently working toward obtaining an ISO 22.000 certification as it seeks to expand sales abroad.

“We are now making better use of our working capital, and we are developing new products for important segments and starting to enter new markets,’’ said Francisco Castro Brenes, the company’s project manager. "Thanks to IIC’s confidence in our business, our company became more competitive in terms of manufacturing costs, allowing us to more profitable in the domestic and international markets."

The company exports its products to Central America, including Panama and the Dominican Republic, as well as to Puerto Rico, and has recently begun exporting to New Jersey, in the United States.

About FINPYME

The FINPYME Technical Assistance Program of the IIC consists of several services designed to help SMEs in Latin America and the Caribbean improve their competitive position and assist them in their access to medium and long-term financing. As a result of the IIC’s experience in working with SMEs over the past 25 years, distinctive and recurrent topics have been identified as necessary to help SMEs become more competitive. This family of technical assistance programs includes FINPYME; FINPYME ExportPlus, FINPYME Family Business; FINPYME Integrity; and GREENPYME. These initiatives are primarily funded by the IIC and donors such as Austria, Wallonia (Belgium), Denmark, France, Italy, the Nordic Development Fund, Norway, the Republic of Korea, Spain, and Switzerland.

The FINPYME Diagnostics program was introduced four years ago in five central American countries, Panama and the Dominican Republic with resources from the Republic of Korea through the Korea-IIC SME Development Trust Fund established at the IIC in 2005. The FINPYME Diagnostics program consists of a methodology for the diagnostic review of a company’s strengths and weaknesses with the goal of making them more competitive and providing them with a roadmap for its improvement. FINPYME Diagnostics, which is carried out in conjunction with local universities and business associations throughout the region, began in 2007 in Costa Rica, Guatemala, the Dominican Republic, El Salvador, Honduras, Nicaragua, and Panama. In 2009, the program was expanded to The Bahamas, Barbados, Belize, Jamaica, Trinidad and Tobago, and Colombia.