San José, Costa Rica, since 1956
Don't mess with my guayabitas

Gallito candy, chocolates won't be 'Made in Costa Rica' anymore

Morenitos, Violetas, Milanes, Guayabitas, Tapitas and other Gallito brand sweets that Costa Ricans have traditionally identified as Tico-made will no longer be manufactured here.

Illinois-based parent company Mondelēz International said Wednesday that it will close its Costa Rica factory on July 30.

The closure means the dismissal of 300 local employees, some of whom worked for decades at the company that started as a small shop in downtown San José more than 100 years ago.

Mondelēz Corporate Affairs Manager Silvia Alvarado Marenco said the company has yet to define where it will move the manufacturing of the iconic sweets that happened here.

The Costa Rica plant also produced powdered drink mix brands Tang and Clight, and Royal gelatin. Production of these products will move to the company’s factory in Puebla, Mexico.

Alvarado told The Tico Times that the Puebla factory “has a larger capacity and more advanced technology, enabling us to increase the scale of production.”

The decision to relocate the manufacturing process was based on recent evaluations showing that Costa Rica is a better fit for the company’s administrative and services operations, she said.

Last year, Mondelēz opened a shared services center for its Central America operations that currently employs 320 people in Santa Ana, west of San José. The center provides support in information technology, human resources and other administrative services.

“Our services center and our administrative offices will remain in the country,” Alvarado said.

She denied any link between the factory closure and the country’s business and manufacturing environment, unlike some other transnational companies that have closed or downsized in recent years.

“We need to maximize our production scale in order to meet our growth goals in the long run,” Alvarado said. “We have larger and more advanced manufacturing plants in other countries.”

Latin American operations director Juan Ignacio Muñoz said in a news release that company leaders decided to tell their employees about the closure three months in advance in order to help them face the transition.

“We will offer our employees all the support we can. We will comply with all severance payments established by law and even give them some additional benefits,” he stated.

Business leaders lament exit

José Manuel Hernando, president of the Costa Rican Food Industry Chamber, said Gallito’s exit is bad news for the industry.

Hernando said that while relocations of global companies are normal in the international context, for Costa Rica the exit of such an important and traditional company “is a call for political leaders to rethink” the country’s loss of competitiveness in recent years.

Francisco Gamboa, executive director of the Costa Rican Chamber of Industries, said he understood Mondelēz’s decision. He said given the country’s obvious loss of competitiveness, local companies must compensate in other areas, such as innovation.

Century-old company

Tico businessman Raúl Odio Herrera opened El Gallito in 1909 as a small shop right across the street from the central market in downtown San José. Odio, who was just 17 years old at the time, started selling ground coffee. Soon after, he started making chocolates and candies.

In 1947, he moved his factory to a larger building in Guadalupe, under the name of El Gallito Industrial, where the company operated for some 50 years and became a popular landmark north of San José.

He also moved the small store in San José to a bigger space on the capital’s Avenida 2 and turned it into El Gallito Comercial, a distribution company for his sweets and for industrial equipment and supplies. That new company, known as Almacén El Gallito, expanded to six locations.

International company Kraft Foods acquired El Gallito Industrial in 1994, and in 2000 the company relocated its manufacturing plant to its current location in Belén, Heredia.

In 2012, Kraft Foods became Mondelēz International.

Almacén El Gallito closed all of its locations in 2015, arguing financial problems caused by a legal conflict with a supplier. The company dismissed more than 200 employees from stores located in San José, Heredia and Alajuela provinces.

Gallito TV spots and jingles were very popular in Costa Rica during the 1970s and 80s.

Recommended: What to expect in your Tico trick-or-treat bag

Contact L. Arias at larias@ticotimes.net

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Ken Morris

How is it bad news for Costa Rica when a company opens a service center providing 320 white-collar jobs in one year and closes a manufacturing site providing 300 blue-collar jobs the next? The net gain is 20 jobs, and the 300 jobs lost are replaced by 300 better jobs.

I understand that job losses are never fun, and further understand that Costa Rica continues to have a human capital pool in which some aren’t qualified for white-collar jobs but need blue-collar jobs. It would be nice to have both kinds of jobs.

But in the bigger picture, this shift in jobs by one company is evidence that Costa Rica is on the right track economically.

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ccdagp

Ken,

So how many used cars have you sold today? Or is this your first one.

Or did I misunderstand your comment? Maybe your auditioning as Prostitute Solís pimp?

I’ve always been anti-drugs, but you have sold me, I need to start smoking what ever you are smoking!

#1. Call centers are fly-by-night operations, up with in several months, and out over night.

#2. Call center, white-collared job? An adult working in a call center is the equivalent of a teenager working in a fast-food joint. How many people do you know who have retired from a call center.

#3. The brand “Gallito” is not a fly-by-night operation, when Ticos purchase “Gallito’s” products there’s a since of pride knowing its made in Costa Rica.

#4. You say a loss of 300 blue collar jobs to a gain of 320 white collar jobs is evidence that Costa Rica is on the right track economically. So I ask you how many more Ticos came of age that were added to the employment pool this year, not to mention the number of foreign workers? And while Solís may not have created the Routa 32 situation that will employ dozens if not hundreds of foreign workers, he backed the deal. Why should Solís care that foreign workers are going to work for the Costa Rican Goverment, it’s not like the Solís Administration is going to pay for it. Because it will be Ticos paying for it! It’s a matter of logistics, China needs to get it’s foreign made products from Limon to the masses in San Jose!

I nominate Ken for used-car salesman of the month.

P.s. as-is-no warranty!

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CHRISTIAN VILLEGAS

Mr. President, your performance is so lousy that I believe you will go down in the history as one of the worst leaders ever. Amazingly even worst than Laura and Pacheco, which is a lot to say !. You are killing the Costa Rican industrial base, thus creating a terrible vacuum, condemning this trained work force to go and find a Job in any of the call centers in town, making LESS MONEY of course. Frustration at all levels !.
I have not been able to determine if this lack of character of yours is based on Ignorance on what you are supposed to do, or you are intellectually challenged !. Either way, the results of this government speak by themselves !. GO HOME !

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Bobpiazza

Sorry to see this happen. Exactly what the US has been experiencing for decades now. Guess it could be worse. At least they are not relocating to China.

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landshark

Some of the operations are going to Mexico, but not all. China is losing manufacturing jobs to Malaysia, Vietnam, Laos and parts of India. The whole globalization and greed dynamics are destroying communities and countries.

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