Alicorp

ALICORP is the main producer and marketer of mass consumption products in Peru. Is the main leader in the mayority of the products it commercializes, with a market share of more than 50%. This has been reached due to the efficient use of resources, good operative and financial leverage and the strategies set up for the future, keeping the leadership nationwide. ALICORP continuously executes andimplements modernization projects for its new facilities as well as production sysems and new marketing strategies.
The Company has growth, in sales 27%, maintaining policies of accounts receivable, inventory, accounts payable in order to obtain enough needs of liquidity and operativity funds (NOF). Eventhough 2008 is a year of international crisis, ALICORP grew 1% in sales, showing a goodmanagement of inventory, reduction in costs and on time financial leverage. The Company operates in a commodity market, as its ingredients depend on the international prices for wheat and soy – products imported from Argentina, Bolivia, Mexico and mainly from the USA.
According to the information provided by the Management, the Company has reported 161 millon soles in utilities for the year 2008,comparatively less than in 2006 and 2007, but they show a solid operative and financial structure.

ALICORP S.A. is making anual investments in the business operations, in the current plant expansión as well as in the possitioning of the brands nationwide. Also the Company is making continuous investments in searching for new products for its commercialization.
The Company has strategic allianceswith other companies related to the group, in order to consolidate united operations such as the development of oils, adquired by Palmas del Espino company (agroindustrial company of Romero Group).
The investments in fixed assets performed in 2008 has been used in the purchase of new production lines, in the cookies’ facilitu in Callao as well as in the improvement of machinery and equipment ofnoodles and ice cream.
The income for 2008 sales has been comparatively more due to the increase in the demand of mass consumption products, to the income increase and the National Gross Income.


ALICORP’S valuation method is of Discounted Cash Flow. This is the most representative method for this type of company and sector.
According to the results obtained from the Cash Flow, discountedto the WACC (weighted average cost of capital), the valuation is: S/. 3,193,125.
The peruvian economy is entering into a new chapter in its evolution cycle. From 2002 to 2004, Peru had a low economic growth but stable prices. From 2005 to 2007, the country experienced high growth period with stable prices. Since mid 2007, Peru has entered in a high growth period but with price volatility andinflation.
In the last years, the PBI (National Gross Income) has overcome systematically the market and government projections. The experts opinión indicate that for 2009, Peru would also have the major growth in the PBI (National Gross Income) for the región, 5% growth.

Peru is the leader in economic growth in the región and will mark the lowest inflation rate for 2009, according to thespecialits, they indicate that for this year the country will have the lowest rate 3.4%.

The entry of the Free Trade Agreement (FTA) has opened the door to the most important market in the world and has shown that Peru is a trustworthy and stable comercial partner. Personalities of various sectors of the industry have considered that despite the current international financial crisis, it wouldnot let the FTA contribute to launch the local economy in the immediate future, from a long term visión, it will promote the commerce between Perú and the United States and foreign investments.
The sector where Alicorp participates is the the food sector. Many of its products are key products in the basic family basket and Alicorp’s sales are the mirror of the consumption growth nationwide and...