Grupo LALA said the decision was made following an evaluation of its geographic footprint and an analysis of performance and future strategic fit, aligned with the company's strategy to focus on its core markets, increase profitability and improve the return on invested capital.
The company told DairyReporter the facility currently employs 130 people.
The announced closure will have a $3m favorable impact on 2021 full year EBITDA for the company's Central America operations.
Arquímedes Celis, LALA's CEO, said, "After a detailed analysis and review of LALA's Costa Rica operation, we determined that related resources and focus are better allocated towards stronger paths to profitability and shareholder value within the company, while we also remain focused on ensuring that all of LALA's businesses achieve performance targets closely aligned with our goals and expectations. Moreover, the capital freed up with this closure will be re-allocated to our businesses in Nicaragua and Guatemala where there is more potential to achieve sustainable and profitable growth."
LALA's Costa Rica operation represents 0.4% of the company's consolidated sales, with assets comprised primarily of one production plant, one distribution center and 12 distribution routes. Assets associated with the operation will be sold or reassigned within the region.
The closure will result in a $126m-peso impact on Grupo LALA's EBITDA and $480m-peso impact on Net Income for the fourth quarter 2020.
Net Income one-off items are comprised as follows: $404 million pesos in balance sheet and goodwill write-offs (non-cash); and $76m peso accrual for closure expenses and contingencies.
Grupo LALA said it is committed to generating shareholder value by executing on its strategy to increase ROIC through profitable growth.