CERVECERIA POLAR - Company Profile, Information, Business Description, History, Background Information on CERVECERIA POLAR



Apartado 2331 Carmelitas Zona 101
Caracas
1070
Venezuela

History of CERVECERIA POLAR

Little-known Cerveceria Polar, a Venezuelan brewing company, supplies 85% of that nation's beer. In just under 50 years, Polar has grown from a small family operation to become Venezuela's largest private company. It now ranks 13th among the world's breweries.

Dr. Lorenzo Mendoza Fleury, a Venezuelan lawyer, inherited a soap factory from his family during the late 1930's. Although this factory proved to be a financial failure, Fleury established a business style worthy of future success; he soon sold the soap factory in pursuit of a more profitable industry. The search ended in 1941 when he established a brewery in Antimano, a suburb of Caracas. The rapid expansion that followed is the legacy of Mendoza Fleury's far-sighted decision.

The Antimano facility enjoyed sufficient success that by 1950 a second brewery, Cerveceria de Oriente, could be established in the Venezuelan city of Barcelona. A year later production demand required the construction of a new brewery with large scale capacity. Also located in Caracas, this establishment eventually became the headquarters for all Polar's activities. The company trademark, a polar bear looking across a body of blue water, emerged from this facility.

By 1960, at a time when large Venezuelan corporations lacked confidence in the country's beleaguered economy and thus turned their attention to overseas markets, Cerveceria Polar decided instead to expand at home. This decision marked a significant turning point in establishing Polar as the pre-eminent Venezuelan brewery. Soon Cerveceria Modelo, the company's newest brewery, was in operation in Maracaibo in Western Venezuela.

During the following decade Cerveceria Polar captured 50% of the domestic market. The continual pursuit of product stability and production quality required adaptation to climatic conditions and the eventual automation of all Polar's activities.

Beer sales tripled during the 1970's. To maximize existing capacity, the company introduced a number of improvements in the production process. They included the implementation of high-gravity brewing, first fermenting wort of 14% extract and then correcting this to 11.3% extract. Three week cycles of fermentation and storage followed this process. Tight production schedules were maintained.

By the end of the decade yet another brewery, Cerveceria Polar del Centro, began operations in the city of San Joaquin. A major innovation, signifying a technological breakthrough in the brewing process, was initiated at this site: the San Joaquin facility became the first brewery in the world to use a one-tank system with cylinder-conical tanks from the start of production. The efficiency of the process marked the end for the company of the kind of beer supply shortages which had occurred in the past. The small Antimano brewery now outlived its usefulness and was duly closed.



Cerveceria Polar's brewing process begins with water, supplied by municipal sources, that is passed through sand and activated carbon filters and then decarbonated by weak-acid ion exchangers. Since Venezuela's climate precludes the cultivation of malt or hops, these supplies are imported from countries as diverse as Canada, Finland, Czechoslovakia, and Australia. Pre-cooked rice flakes are used as an adjunct, and wort is extracted by the infusion mashing method and lautering. Flavor stability is guaranteed through the separation of the hot trub.

The fermentation process follows over the next 21 days. Except at the Caracas brewery, where conventional fermentation continues, all other Polar facilities use cylinder-conical tanks. Fermentation occurs at 11° to 14°C. Then after reducing total diacetyl to under .1 mg/l, the beer is cooled until it reaches 1°C.

Automation at the Cerveceria Polar breweries takes the form of milling, mashing, lautering and wort boiling. Later, automation is used for filtration and cleaning. The company's future plans to automate the one-tank fermentation process promises to increase production capacity. The bottling process, using both European and American equipment, involves two different size glass bottles and standard aluminum cans. Once in the containers the beer is pasteurized in tunnel pasteurizers.

Cerveceria Polar conducts its operations with careful attention to water conservation and environmental protection--the recycling of condensates, the use of air coolants for diesel engines, and the condensation of exhaust steam. Waste water is treated with activated sludge to eliminate 95% of the organic load. In an attempt to extend their environmental activities, the company has recently begun to demineralized treated waste so that it can be reused for indirect processes. Polar works in close cooperation with Venezuelan universities in conducting research on uses for sludge produced in waste water treatment. Possible uses for the sludge range from improving sandy soils to forming an ingredient in cattle feed.

Research and development at Polar concentrates on process innovation. Numerous laboratory tests involve investigations into methods of improving beer flavor stability. Venezuela's climate subjects the country to year-round sunshine; high temperatures cause product variability. At Polar laboratories a method was devised to deal with this problem peculiar to tropical climates. A simple means of measuring oxygen content in the bottles eliminated flavor instability. The method has subsequently been adopted by other breweries around the world.

Distribution of Polar products takes place under the direction of eight wholly-owned regional distributors, and Polar beer can be found in even the most remote regions of Venezuela. Although transportation conditions are at times precarious, Polar has succeeded in the consistent delivery of its products.

Polar also operates its own in-house advertising agency, Cadesa, which directs a highly effective campaign using patriotic messages. A popular example is the short film entitled, "Traveling with Polar." Here viewers share in the celebration of images of national scenery and cultural heritage.

By 1984 Cerveceria Polar controlled an 85% share of its domestic marketplace. New areas of expansion include the production of alcohol-free malt beverages and the penetration of overseas markets. The establishment of a food division has signalled Polar's attempt to become a more diversified business. Prior to their use of rice flakes, the company had used imported cornflakes as an adjunct to the brewing process. Corn, however, is an indigenous crop to Venezuela. Instead of continuing to import, Polar purchased a small local corn mill to produce cornflakes. This operation was the precursor of Polar's food divisions which now produces corn oil, animal feed, and the traditional Venezuelan "arepa." Today, over 500,000 tons of corn are processed annually. The company has subsequently expanded into other agricultural activities, including poultry farms, pork production and slaughterhouses.

Over the course of its history Polar has acquired several subsidiaries to augment company growth--Superenvases Envalic, a manufacturer of two-piece aluminum cans; Plasticos Metalgrafica, a manufacturer of plastic beer cases; and Industria Metalgrafica, producers of crown corks. All three of these subsidiaries supply products not only to Polar but also to industry competitors.

Whether Polar will always remain a private company remains to be seen. The need for capital to support Polar's growing activities might encourage the public listing of shares. In the meantime, the company continues to capture a majority of Venezuela's market for beer. All accounts indicate that Cerveceria Polar will maintain this strong market share in the future.

Principal Subsidiaries: H.A.T., C.A.; Cadesa; Transpolar, C.A.; C.A. Inversora Exitos 2000; Plasticos Metalgrafica S.A.; Industria Metalgrafica; Superenvases Envalic, C.A.; Fabrimonca, San Joaquin; C.A. Suplidora Venezolana.

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