Telephone: (56) (2) 690-7000
Toll Free: (56) (800) 200-220
Fax: (56) (2) 672-5119 or 696-5063
Incorporated: 1934 as Compania de Petroleos de Chile S.A.
Sales: CLP 2.66 trillion ($4.48 billion) (2003)
Stock Exchanges: Borsa de Comercio de Santiago
Ticker Symbol: COPEC
NAIC: 113110 Timber Tract Operations; 113310 Logging; 114111 Finfish Fishing; 212299 Other Metal Ore Mining; 311712 Fresh and Frozen Seafood Processing; 322110 Pulp Mills; 321212 Softwood Veneer and Pulpwood Manufacturing; 447110 Gasoline Stations with Convenience Stores; 454312 Liquefied Petroleum Gas (Bottled Gas) Dealers; 454319 Other Fuel Dealers; 522210 Credit Card Issuing
"The Copec companies adhere to a vision of business that provides for a constant rhythm of growth, while also buffering them against the adverse effects of economic euphoria or the pessimism that characterizes difficult times." --Felipe Lamarca C., chairman
1934: Compania de Petróleos de Chile S.A. (Copec) is founded.
1964: Copec is the biggest commercial company in Chile.
1977: Copec enters the forestry business with the purchase of two companies.
1980: Copec acquires a fishing company and two electricity suppliers and distributors.
1985-86:Anacleto Angelini Fabbri buys a controlling interest in Copec.
1989: With 26 affiliates, Copec is Chile's largest holding company.
1992: Copec's Igemar is the biggest fishing and fish-processing company in Chile.
1995: Forest products account for 70 percent of Copec's sales.
2000: Angelini buys International Paper Co.'s 30 percent stake in Copec for $1.23 billion.
2002: Copec is the world's sixth largest producer of cellulose.
2003: Following reorganization, Copec becomes Empresas Copec S.A.
Empresas Copec S.A. is the largest privately owned company in Chile, and its consolidated sales represent no less than 5 percent of the nation's domestic production. It leads all Chilean companies in the distribution of all types of fuels and owns several hundred gasoline stations operating under the Copec name. Its Arauco subsidiaries make it the leading producer of forestry products in the country and, indeed, the largest forestry enterprise in South America, and its fishery subsidiaries are located in one of the world's most important fishing zones. Copec also has a substantial stake in other economic sectors: services, mining, and electricity. The company is majority-owned by AntarChile S.A., which functions as the holding company for the interests of the Angelini group.
Big Fuel Distributor: 1934-64
Compania de Petróleos de Chile S.A. was founded in 1934 by a team of Chilean entrepreneurs with the goal of importing and distributing fuels in the national territory. The objective was to assure the flow of these supplies, which had been undermined by the scarcity of Chilean currency that occurred with the onset of the Great Depression. Although faced by competition from the major world oil companies, Copec was able to establish a national distribution network, with service stations and storage tanks, and to make itself the national leader in its field.
Copec's first venture outside its original business started in 1941, when it began selling vehicles, machinery, and tires and accessories. In 1943, when fuel supply shortages began to bite again due to World War II, the company created Sociedad de Navagación Petrolera (Sonap), which acquired an oil tanker, the first to sail under the national flag. In 1956, in collaboration with two other oil companies, it formed the pipeline company Sonacol. The following year Copec joined with Mobil Oil Corp. to construct a modern plant for the manufacture of lubricants, with the purpose of producing and distributing a complete line of fats and oils under the Mobil name. In 1961 the company took a stake in Abastible S.A., an enterprise distributing liquid natural gas to homes and industry. It gradually took control of this company, which eventually became ABC Comercial Ltda., through successive augmentations of capital. Copec, in 1964, joined with the Chilean subsidiaries of Esso--that is, Standard Oil Co. of New Jersey--and Shell Oil (the Royal Dutch/Shell Group) to establish Sociedad de Inversiones de Aviacion Ltda. (Siav), dedicated to the supply of fuels, lubricants, and other aviation products. By this time Copec was by far the richest commercial company in Chile.
Forestry Foremost: 1977-96
In 1939 the government of Chile had established the Corporación de Fomento de la Producción (Corfo), a state body, to plan and direct the nation's industrial development. Aside from providing subsidies to private companies and protecting them from foreign competition with high tariffs, Corfo took a considerable stake in many enterprises, especially in sectors such as electricity, steel, and petroleum. Following the military coup that overthrew the left-wing socialist government of 1970-73, a wide program of privatizing state enterprises was instituted. The nation's largest holding company of this period, representing the Cruzat and Larraín families, took control of Copec. They put the company into the forestry business by purchasing government-owned Empresa Forestal Arauco Ltda. and Industrias de Celulosa Arauco S.A. in 1977 for $90.63 million. This network of forest tracts, sawmills, and cellulose (wood-pulp) plants was augmented in 1979 by the purchase from Corfo of Celulosa Constitución S.A., which was merged with Celulosa Arauco to form Celulosa Arauco y Constitución S.A. At the same time, four new forestry subsidiaries were established to develop forestry resources in southern Chile for parent Copec, which was now the largest privately owned enterprise in the nation.
The Chilean forestry industry was being aided by climatic conditions that were thought to foster the rapid growth of the radiata pine, which was introduced into the country from the Monterey Peninsula of California. These conditions included large shifts in temperature each day, nutrient-rich soil, an environment relatively free from disease, steady and reliable rainfall, and proximity to the sea. A government forestry official told Shirley Christian of the New York Times, "Here, the radiata pine has found a better place to grow than its place of origin." In addition, the forestry industry was diversifying its roster of customers. Once heavily dependent on Argentina, Chile was selling forestry products to more than 70 countries in 1988.
By 1980 Copec also had branched out into computation, tourism, and durable goods. In that year it purchased a fishery, Pesquera Guanaye Ltda., and two electricity suppliers and distributors, Sociedad Austral de Electricidad S.A. (Saesa) and Empresa Eléctrica de la Frontera S.A. (Frontel). The following year it invested in coal deposits in far-southern Chile, a joint venture with British investors that gave rise to Compania de Carbones de Chile (Cocar S.A.). But the severe financial crisis that ensued and that affected all of Latin America found Copec hobbled by bad financial investments and high foreign-currency debt in the wake of the virtual collapse of the Chilean peso. The Cruzat-Larraín group could not pay its debts and had to surrender the enterprise. Anacleto Angelini Fabbri, owner of the fourth largest group in Chile, acquired 41 percent of the company's shares in 1985-86, including Corfo's 14 percent holding.
Angelini was an Italian immigrant who, after arriving in Chile in 1948, founded a paint factory with a few machines and $100,000 in capital, and later established a construction firm. In collaboration with Chilean associates, he acquired, in 1956, a fishery, Pesquera Eperva S.A. In 1975 this company bought, for only $1.14 million, the state's controlling interest in Pesquera Indo S.A., which became the first modern enterprise in Chile for the large-scale production of fishmeal and fish oil. In 1977 Eperva and Indo bought the government's 76 percent share of Pesquera Iquique, a fish processor dating from 1945. Iquique became the second largest company in its field and grew sevenfold between 1977 and 1987. The largest was Pesquera Chilemar S.A., a fishing fleet that dated from 1961 and also was owned by Angelini. Angelini entered the forest products business in 1958 by means of an investment in the company Sociedad Maderas Prensadas Cholguán S.A. Twenty years later, Forestal Cholguán S.A. was split off from this company to take charge of the strictly forestry end, including 9,114 hectares (22,512 acres) of pine plantations.
Angelini was financially prudent and thus in a position to acquire the interests of the debt-ridden conglomerates such as Cruzat-Larraín that emerged in the privatizations of the 1970s but failed in the 1980s. He was allowed to do so even in basic resource industries, although (as of 1985) he had not taken Chilean citizenship, not wanting to renounce his Italian nationality. His partner in Copec was Carter Holt Harvey Holdings Ltd., a New Zealand conglomerate that converted $160 million of Chilean debt that it held into equity and added $50 million of its own cash. Angelini and Carter Holt Harvey jointly held 60 percent of Copec through a holding company, Inversiones y Desarrollo Los Andes S.A. With 26 affiliates, Copec was the major holding company in Chile at the end of 1989. Angelini was chosen as the entrepreneur of the decade by the business magazine Gestion.
Angelini more or less ignored the petroleum-distributing aspects of Copec to concentrate on export growth in the forestry and fishing sectors. To provide more raw material for paper, Copec opened the most modern cellulose plant in Chile in 1991, and it united two fisheries in 1992 to form Pescuera Iquique-Guanaye S.A. (Igemar), the largest in Chile. Eperva acquired Chilemar in 1992 and Indo in 1994, subsequently absorbing both companies. Copec established Aserradores Arauco S.A. in 1993 to consolidate its sawmill activities and added Paneles Arauco S.A. in 1995 to produce wood strips and panels. Celulosa Arauco y Constitución bought Argentina's largest wood-pulp producer and its only wood-pulp exporter, Alto Paraná S.A., in 1996. That year Copec entered gas distribution in Santiago by taking a stake in Metrogas S.A., which had become the principal company in this field. The conglomerate's holdings in electricity distribution became larger with the acquisition in 1996 of Empresa Energía Río Negro S.A., which was active in southern Argentina. From 1991 to 92, Copec had entered mining by organizing a company to explore hydrocarbon deposits in Colombia and by taking a majority share of Compania Minera Can-Can S.A., which began mining metals in 1994.
Raising the Stakes: 1997-2003
By 1997 Copec was valued on Chile's stock market at more than $5 billion. It held nearly half of the fuel distribution market in Chile, with about 1,500 service stations, which included cafeterias, stores, and minimarkets, and its own credit card, TCT. But the chief enterprise in importance was Celulosa Arauco y Constitución, representing 70 percent of its profit and exporting to 70 countries. In 1998 it was Chile's largest exporter outside of the mining sector. Despite low prices for wood pulp, Arauco, as the lowest-cost producer in the world, was earning a profit. Perfectly symmetrical rows of fast-growing pine trees from the company's more than one million acres of forest were being sent to sawmills and factories for conversion to bleached pulp, and eventually into paper products, particle board, and furniture.
Relations with Carter Holt Harvey had deteriorated after International Paper Co. purchased majority control of the New Zealand firm in 1995. In 2000 International Paper's stake in Copec was purchased by AntarChile--Angelini's holding company--for $1.23 billion. To pay for this, AntarChile raised $613 million by a public offering of stock and also took out a five-year, $525 million loan. Also in 2000, Copec purchased Angelini's Forestal Cholguan for $300 million. This brought the company 63,000 acres (155,610 acres) of forest, a sawmill, and two processing plants, one of them making a highly sought-after wood-and-fiber panel called Trupán. In 2001 Copec earmarked $1.2 billion for a second huge cellulose plant in Valdivia, and the following year it opened two wood-panel plants, one in Chile and one in Argentina. To help pay down the debts it had incurred, Copec shed its electricity distribution interests in 2000-01, including the sale of its longtime distributors Saesa and Frontel for some $250 million.
By 2002 Copec--chosen company of the year by the Chilean business magazine Capital--was the world's sixth largest producer of cellulose, turning out more than 1.5 million metric tons of pulp a year. Its 12 sawmills had a capacity of almost 2.2 million cubic meters per year. The five wood-panel plants had a combined capacity of nearly one million cubic meters. The Valdivia cellulose plant, scheduled to come on line in 2004 with capacity to produce 600,000 metric tons a year, was to be accompanied by sawmills and other works. Copec already had in mind still another cellulose plant, in Itata, that could be operating at the end of 2010. Wood pulp had become Chile's second largest export, after copper, but commodity prices often fluctuated, as, for example, when the 1998 financial crisis in Asia seriously reduced demand from some of the product's chief customers. Copec and its Chilean competitors had by then begun focusing on turning out wood products of greater added value and less price volatility. Copec's wood panels and moldings, for example, were strips of pine highly prized for their clear, knot-free wood.
Despite strong results, Copec was finding that investing in the forestry sector was expensive, given that new plantings of trees were continuously required but could not be harvested for at least 20 years. Copec's purchase of Alto Paraná was attractive because land was cheaper in Argentina, trees grew faster, there were fewer environmental regulations, and no problems--as in Chile--of conflicts with Indians who lived in the most heavily forested zones. Chilean forestry companies also were being courted by Uruguay. In 2004 Copec owned 930,000 hectares (2.3 million acres) of forests in Chile, 233,000 hectares (575,000 acres) in Argentina, and 28,000 hectares (69,000 acres) in Uruguay. About two-thirds of these holdings in Chile and about half in Argentina and Uruguay were in plantations, chiefly of radiata pine or eucalyptus.
Copec's fuel distribution business had 613 service stations in 2002, plus an industrial channel that was supplying fuel to 3,039 construction, electrical, fishing, forestry, and mining customers. The company also held 40 percent of Metrogas and, through Abastible, remained in the business of distributing liquid natural gas. Fishing was a poor-performing sector of Copec's holdings, although it held 8 percent of the world fishmeal market, but in 2002 Igemar returned to the black after years of incurring losses. In all, Copec earned CLP 332.9 billion ($560.6 million) on revenues of CLP 2.66 trillion ($4.48 billion) in 2003. Fuels accounted for 63.3 percent of sales but only 22.6 percent of profit; forestry for only 32.5 percent of sales but 73.1 percent of profit. The company's long-term debt at the end of the year was CLP 1.15 trillion ($1.94 billion). At 89 years of age in 2003, Anacleto Angelini, rated the fourth richest man in Latin America, was still in charge of Copec, with his nephew Robert Angelini waiting in the wings to succeed him as head of an experienced managerial team. Following a reorganization of the enterprise, Copec became Empresas Copec S.A. in 2003.
Principal Subsidiaries: ABC Comercial Ltda.; Abastecedora en Combustibles S.A.; Alto Parana S.A. (Argentina); Celulosa Arauco y Constitución S.A.; Compania Minera Can-Can S.A. (51%); Pesquera Iquique-Guanaye S.A. (82%).
Principal Competitors: Empresa CMPC S.A.; Esso Chile Petrolera Ltd.; Shell Chile S.A.C.
- "Anacleto Angelini Fabbri," Gestión, December 1985, pp. 14-16.
- Brown, Greg, "Green with Envy," Latin Trade, July 2001, p. 70.
- Castillo, Nancy, "La amenaza extranjera," Capital, May 18-31, 2001, pp. 56-59.
- Christian, Shirley, "Chile Promotes Forestry Industry," New York Times, October 31, 1988, p. D8.
- "Desde una caja a un piano," Gestión, April 1990, pp. 15-16.
- "El empresario de la decada," Gestión, January 1990, p. 38.
- García de la Herta, Carolina, "Big Money," Capital, January 1997, pp. 46-48.
- "Los Hombres Clave en las Decisiones del Grupo Angelini," Gestión, June 2002, pp. 32, 34, 36, 38.
- "Liderazgo obliga," Capital, August 1996, p. 73.
- Medel, Lorena, "Salto cuántico," Capital, December 20-29, 2002, pp. 84-86.
- Pérez R., Soledad, "El nuevo imperatore," Capital, October 10-23, 2003, pp. 22, 24, 26, 28.
- Torres, Craig, "Chile Squeezes Last Drop from Factories," Wall Street Journal, November 24, 1999, p. A15.
Source: International Directory of Company Histories, Vol.69. St. James Press, 2005.