Cautious optimism about future
Every picture tells a story. So does every business. Each
Heineken operating company has its own story to tell,
about its past and its future. Heineken International
Magazine paid a visit to El Aguila (Spanish for: The
Eagle) and discovered that this brewery, one of Spain's
oldest, had more than just a story to tell.The story
turned out to be one of a business showing a new zest for
life as it crawls up out of a deep abyss. But 'crawls' is
hardly the right word. Under the Heineken banner El
Aguila with its 3,600 employees is zooming towards
recovery at rocket-like speed. Hard work and
inventiveness: these are the slogans of the management
team in Madrid. And yet the team members temper their
optimism with the right dose of caution. "We've still got a
long way to go" is one remark we frequently heard. But
Heineken International Magazine found out that El
Aguila is at least heading in the right direction.
Improvisation
Efficient
History
Antiquated
No forced redundancies
PLENTY OF NEW FI2
AT EL AGUILA IN SP
General manager R. Strobos:
"Heineken has created confidence in
Spain.
Production manager M. Kakebeeke:
"Investing in improving quality and
productivity.
Speed seems to be the keyword
at El Aguila. From the
moment that Heineken
acquired a 38% shareholding (and
management control) in September
1984, Spain's biggest brewery group
has been moving along at breakneck
speed. But it clearly knows where it's
heading, the aim being to return to
profit by 1989. R. Strobos, El Aguila's
general manager, has this to say about
the speed of action: "In the first
couple of years you have to push
through the plans you feel are urgent.
But, once you've settled in, you no
longer tend to do that.In August last
year Heineken acquired the majority
of the shares. El Aguila is now 51%
Heineken-owned.
The changes at El Aguila over the past
two years can almost be described as a
revolution.The Spanish employees
can take credit for part of this success.
"As a Heineken management you
may want to get all sorts of things
done, but if there's no willingness from
the Spanish side to accept new
developments, then you might just as
well forget it. We've found that the
Spaniards can adapt very quickly and
are very good at improvisation.Those
are the qualities that work to El
Aguila's advantage", says marketing
manager F. Bot.
When it acquired El Aguila in 1984,
Heineken was fully aware that a great
deal needed to be done. By
Heineken's standards El Aguila was a
highly archaic business. Two
examples to illustrate this: the
accounts ledger was still being written
by hand, and there were no electric
typewriters. To enable efficient
working practices, changes needed to
be made in all sectors of the business.
The biggest changes took place in El
Aguila's seven breweries. In the past
each brewery had been headed by a
general manager. He was in charge of
both marketing and production. Not
much influence was brought to bear
on him from the head office in
Madrid. And so each manager was
able to follow up his own ideas about
the beer's quality and taste, about
advertising and selling. This meant
that El Aguila's image and
presentation differed depending on
the region. In other words: a glass of
Aguila beer brewed in Cordoba did
not taste or look the same as one from
the Valencia brewery.
This organisation structure - far from
ideal by Heineken standards - had its
roots in El Aguila's past history. El
Aguila was founded in Madrid at the
beginning of this century. Over the
years the business grew strongly by
taking over existing breweries and
building new production units of its
own. For many decades El Aguila was
Spain's biggest brewer. In 1970 the
business was the market leader; one-
quarter of Spain's total beer output
came from the seven Aguila
breweries. During the 1970s the
brewery got into difficulties.The
market was expanding, but El Aguila
failed to seize its chances. As
management responsibilities were
spread so thinly between the various
brewery units, the central
management in Madrid was unable to
take the necessary steps to benefit
from this growth market.Though the
business was still the country's biggest
brewer, it was operating at a loss. In
the early 1980s, mainly because of the
very high interest rates, the financial
problems worsened.
One of the consequences of those
financial problems was a backlog in
the maintenance of machines. El
Aguila had made no new investments
in new machines for more than ten
years. Its seven breweries - in Algete
The brewhouse in Algete. Apart from the familiar copper brewing kettles, stainless steel kettles have o
(20 kilometres north of Madrid),
Cordoba, Valencia, Zaragoza,
Merida, Cartagena and Alicante -
were antiquated.The new
management from Heineken spent
several months studying the question:
how many breweries do we need so
that we can at least maintain the
capacity (4.5 million hectolitres),
whilst not forgetting the commercial
and social factors involved. Various
options were examined and the
ultimate decision was that the
breweries in Merida, Cartagena and
Alicante would have to be closed.
M. Kakebeeke, responsible for
production at El Aguila, explains why:
"Those three breweries were the
oldest and smallest ones in the group.
Renovating them would have cost too
Bottles of Aguila are filled with great
speed.
muchSo we transferred their capacity
to the four remaining breweries. A
major capital expenditure programme
has been drawn up for the
modernisation of those four
breweries. Up to 1991 some Ir.£124
million will be invested in improving
quality and productivity. Let me give
an example: in earlier days the seven
breweries had as many as 25 bottling
lines, for the simple reason that each
separate brewery bottled and packed
all types of Aguila beer. Now exactly
the same capacity can be handled by a
mere seven lines in the four
breweries."
The closedown of three breweries
obviously had consequences for their
Bottles of Aguila beer, ready for