Alberto Vollmer, CEO of Ron Santa Teresa and president of the National Investment Promotion Council (Conapri), estimates that Venezuela needs investments in the order of 500 billion dollars over a decade to recover the size of the Gross Domestic Product it had in 2013.
“For me, the problem of the country is not increasing revenue, which must be done, but growing. The macro picture we have shows that we had a 350 billion dollar economy between 2010 and 2013 and we reached a minimum of 40 billion dollars and today we are at 60 billion dollars,” the CEO of Ron Santa Teresa appeals to the data.
“Guatemala currently has a GDP of 80 billion, and we have a larger territory with more resources. How to grow the Venezuelan GDP to 100,000 or 200,000 billion dollars is, for me, the big question we must answer,” Vollmer insists.
The entrepreneur, leader of the fifth generation of his family at the helm of Santa Teresa, points out that the country will have to compete for those investments and, therefore, bold decisions must be made. In his opinion, there are three ways to obtain those funds: multilateral, direct investment, and the stock market.
In a context like the current one, when the country’s institutions are subject to international sanctions, in his opinion, the stock market is an option with wide advantages.
“As we become more formalized as companies, the market will be more transparent and modern, and it will generate more confidence, which is the raw material of finance and the future,” warned Vollmer during his participation in the event “A look at the present and future of the Venezuelan Stock Market,” organized by the IESA Finance Club.
Vollmer: “Being a public company helped us”
Alberto Vollmer, CEO of Ron Santa Teresa, stated that being a public company that trades its shares on the Caracas Stock Exchange (BVC) was one of the key elements that allowed them to face the financial crisis that the more than two hundred-year-old company suffered in the early years of the 21st century.
“Santa Teresa has been public since 1978, and this was done with the intention of making the workers co-owners of the company, democratizing capital, and making everyone feel part of that dream of having a company. Today we have about 6,000 shareholders, including market agents,” he explains.
And he adds: “That’s why we issued Type B shares in 2020, to involve everyone in the company with the new company strategy.”
“When we undertook the restructuring, what helped the most about being a public company was the rules, which require transparency and protect minority shareholders and management from majority shareholders, not because they wanted to harm minority shareholders, but because they often did not understand the importance of those shareholders,” explains Alberto Vollmer.
In summary, being in the stock market imposes less discretionary management and very clear limits.
“The rules that benefit the minority also benefit the majority shareholder. Restructuring debts with shareholders, foreign investors, suppliers, customers also allowed us to set rules for those actors. That’s how we were able to save the company in 1999,” he points out based on his experience of the importance of trading on the stock market.
Independent directors, also for state-owned companies
“There are companies that have boards of directors focused on control, and when they think about control, they are not thinking about the future. We had to rebuild a board that was completely independent. Now we only have two family members on the board, the rest are independent. That demands a lot from the organization, beyond the norms of good corporate governance, because it imposes transparency and results,” says Alberto Vollmer.
Alberto Vollmer, CEO of Ron Santa Teresa, maintains that boards of directors are essential and must be constituted based on the corporation’s strategy to be truly useful.
“State-owned companies should also have independent directors. The day when the State has transparent accounts, with directors in its companies who know about sovereign bonds and when every citizen can see what is happening with their resources, the country will begin to grow steadily,” he insists.
Vollmer is in favor of Venezuela creating a sovereign fund like Norway’s, which receives a portion of the oil production resources and stimulates domestic productive investment, but “it should be managed competently and independently.”
“Independent directors are not chosen according to personal taste, but based on the strategy,” he insisted.
Referring to the distribution joint venture that Ron Santa Teresa agreed with the international rum giant Bacardí, Alberto Vollmer also values the benefit of trading on the open capital market.
“Bacardí wanted to buy and the fact of being a public company protected us and in the end, we achieved the agreement without selling a single share,” he affirms.
“We are just starting internationally, but we are already in 90 countries,” says the executive.
“We plan to grow 40% in international operations this year, but we are investing between 80% and 90% of sales in different markets. The number one market is the United States, which is one of the largest and most profitable in the world, then we are prioritizing France, Spain, and others,” Vollmer explains.
In his opinion, “this is the best time to invest” because there are undervalued assets in the market that have very high growth potential.
“It’s true, sanctions are a problem to be solved, and if we do it with agreements between different sectors of the national economy to give an image of consensus, we will strengthen ourselves a lot,” concludes Alberto Vollmer.
