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In preparation for the North American Free Trade Agreement (NAFTA) and the increased competition it will bring, a growing number of Mexican companies are joining forces with each other in an effort to make their operations more efficient and productive. One of the most ambitious examples of this strategy in the agricultural sector is Grupo VITEP, a coalition of 40 independent egg producers in the state of Jalisco.
JOINING HANDS
The egg producers in Jalisco once operated independently of one another. Each company had its own feed plant, its own administrative office, its own packaging plant, and so on. In the late 70s they began to seek ways to streamline their operations through mutual cooperation, and in 1979, they jointly invested in the construction of a plant to produce the vitamins and minerals commonly used in feed mixtures. The new company, PREVITEP, marked the initial stage of what has proven to be a highly successful integrated services strategy.
"There are two or three companies that have become very large in the chicken and egg industry in Mexico," says Cesar de Anda, President of the Union of Chicken Farm Associations of Jalisco and one of the driving forces behind Grupo VITEP. "But the rest of us are medium-sized producers. We realized that it was in our interest to unite with one another along the lines of the European and U.S. agricultural cooperatives. Our group has two main objectives: reducing costs and improving sales."
De Anda, whose family owns the Avicar egg company, and is a partner in Grupo VITEP, explains that Jalisco is Mexico's number one egg producer. The state is divided into six principal egg and poultry producing regions: Ciudad Guzman, Cocula, Guadalajara, Tepatitlan, San Juan de Los Lagos, and Lagos de Moreno. Of these, Tepatitlan, the home of Grupo VITEP, is the most important with approximately 50 independent producers...