Bain & Company hired to review TASA operations in Peru

09 May 2018

Peruvian fish oil and fishmeal producer Tecnologica de Alimentos Somos (TASA) brought in Bain & Company to boost profitability after a poor 2017. The management consulting firm has recently completed its analysis and has provided strategic planning advice. The results of the analysis will not be made public. 

TASA brought in the Bain & Company to shake up it’s business model and reshuffle management amid over $100 million in revenue losses. In 2016 the company’s revenue was roughly $330 million however last year, that number fell to just over $200 million. At its hight, TASA was turning over $500 million a year. 

In the recommendations that the consulting firm offered TASA were management and structural initiatives aimed at increasing the pre-tax profit margin. They include shedding less profitable divisions of the company, a management reshuffle and staffing cuts. 

The company has begun implementing some of the suggested changes from the study conducted by Bain & Company. TASA's research and development (R&D) department has already been axed and the company is considering cutting the less profitable human consumption fishing unit. The consulting firm is also said to have suggested hiring a younger, more diverse workforce, recruiting new executives and strategically letting people go. 

"We have concluded a strategic planning process to define plans and actions for the next three-to-five years. It is a usual process that we do periodically in TASA, in order to seek improvements and efficiencies in the operations,” said one TASA spokesman.

Tecnologica de Alimentos Somos or TASA call in Bain & Company in Peru

“We are convinced that TASA will continue to be a benchmark of leadership, ethics, solidity, quality, transparency, efficiency, innovation and sustainability in the fishing industry world in the future," he added.

Another option which the spokesman said was not a strategic recommendation from Bain was focused on selling the company. However, Grupo Breca, the parent group who owns TASA said that they were open to a “good offer”. The company is also considering expanding into into China with the forecasted sale of China Fishery Group later this year, in a bid to increase productivity. 

The firm worked with Bain & Company's offices in both Mexico and China for the operational review. Bain & Company is one of the world's leading management consulting firms. Their office in Mexico City consists of over 80 consultants from countries including: Mexico, Colombia, Peru, Venezuela, Costa Rica, Guatemala as well as the United States, Italy, Estonia, Spain and Austria.

The consulting firm has been operating in Northern Latin America since 1996 and has extensive expertise in strategy, marketing, organization, operations, technology, digital, advanced analytics, transformations, mergers & acquisitions and private equity. 

The TASA spokesman said that the company was “pleased” with Bain’s work on the project. “We are very satisfied with the conclusions of the strategic planning, which obviously we are not going to make public.”

Avianca Brasil needs major restructuring effort to stay flying

18 February 2019

Brazilian airline Avianca Brasil will need to sell 14 of its 50 aircraft and improve its operational efficiency, if it wants to continue flying while being able to repay its creditors, according to an analysis by Galeazzi & Associados. 

The São Paulo based management consultancy was hired by Avianca Brasil in December shortly after the airline filed for bankruptcy protection. Consultants of the firm have since assessed the financial performance of the company and crafted restructuring plans in a bid to turn Avianca’s fortunes. Galeazzi & Associados is also exploring future options for the airline, which include finding a partner, a buyer, or even filing for bankruptcy.

Following a number of payment defaults, Avianca’s main creditors, aircraft lessors Aircastle and General Electric Capital Aviation Services, sounded the alarm bells on the company’s financial position. The two creditors have in the meantime been seeking to repossess their planes, however, their attempts have so far been successfully fended off by Avianca, allowing the company to maintain its current flight schedule. According to Reuters, consultants from Galeazzi & Associados have visited the carrier’s creditors to discuss scenario’s and potential measures. Concrete results have though not materialised.Avianca Brasil needs restructuring effort to stay flying

In the background, Avianca is negotiating with Elliott Management, a hedge fund, about a 250 million real ($69 million) loan, sources close to the matter disclosed. As part of bankruptcy protection process, any investment would need to happen within the regulatory guidelines, likely in the form of debtor-in-possession financing. Brazil’s fourth-largest airline plans to ask the judge overseeing its bankruptcy for more time to reach a final deal, pointing at the progressive loan talks held with Elliott Management. 

In the analysis by Galeazzi & Associados, the advisors conclude that a major restructuring effort is required for Avianca Brasil to continue its operations. Around 14 of the 50 aircraft would need to be disposed, in order to optimise the capacity usage of the fleet. As per the plan, 36 aircraft would combined be capable of achieving 235 flights per day. The sale of the aircraft would provide a needed buffer to repay creditors.

On top of this, the airline will need to reduce its operational expenses and attract investments to the tune of $75 million to stay afloat.

Last year, another Latin American airline, Aerolíneas Argentina called in the help of an external consulting firm to reshape its loyalty program.