Codesa: strategy formulation for the National Industrial Development Corporation in Costa Rica

Abstract

The present thesis »«barks on the study of three distinct aspects of the Costa Rican Development Corporations operations.

The first section presents the Ethos under which the organization was created in 1972, and follows the enterprise’s development until the present day in order to analyze how well it has adhered to its fundamental precepts, as well as how significant its contribution has been to the national economy.

The following chapters cover in detail the present state of the four major areas of investment: cament factories, sugar cane based sugar and ethanol production, aluminium semi-processing, and fertilizers. Alternative strategies are discussed for each of the sectors involved, in an attempt to determine their potential to continue as independent on-going concerns.

In the analysis of the Costa Rican Cement industry, national consumption/installed capacity forecasts until the end of the century are included. Also, the comparative competitive position of the Codesa plants (quality, quantity, price, distribution) both nationally and internationally, is discussed. Finally, the impact of new massive construction programs on demand (dams, public housing, etc.), as well as the potential such programs could provide to enhance the expert possibilities by the sale of similar package deals (design, construction, materials (cement), skilled labour, etc.) abroad is presented.

The use of alcohol as combustion fuel, both as a complement to petrol (gasohol), and as an independent combustible, represents the main theme of the sugar cane chapter. A dynamic impact study of the implementation of different oil substitution programs in Costa Rica (land use, alternative energy crops, cost competitiveness with respect to fluctuations in the price of oil, etc.). New technological developments in the production of alcohol from biomass are also presented.

In the Aluminium section, an analysis of the World aluminium industry scene is made, in an attempt to determine the subsidiary company's strategic outlook (currently the company has important limitations in the acquisition of raw materials. The potential for integration: Establishment of backward linkages to secure the flow of raw materials into the process (from national bauxite deposits), as well as forward linkages to establish the production and marketing of end products (and recycling) to improve value-added position are discussed.

In relation to the fertilizers plant, the effort has been focused on two main areas; raw materials and the study of energy usage (including steps for an energy audit, and the establishment of an energy management system). Finally the review of chronic working capital problems of the past and the development of more adequate performance evaluation criteria and pricing policies are suggested.

The final section is devoted to organizational structure. Different organizational set-ups for the company, provided by management throughout the years, are reviewed and a revised structure, more adequate to fulfill the company’s raison d'etre is proposed.