A bit of everything: Supermaxi-La Favorita still has a lot of market to cover in Ecuador before looking outside.

Sidney Wright, son of an Irish admiral, arrived in Ecuador nearly eight decades ago. He never imagined that his small grocery store, opened in 1934, would become a local leader in the service industry. Grupo Supermaxi-La Favorita now operates a chain of 80 super- and mega-markets nationwide, with specialty stores in home goods, toys, clothing, even real estate.

Wright also didn't plan to turn his business into the one with the highest market cap in Ecuador, nor the one with the highest liquidity, or one of the heavyweights in the Ecuindex index in Quito's Stock Exchange. In 2006, according to data from the exchange, from a total of more than 220 million circulating shares in the service industry, 84% belonged to La Favorita. Its capitalization rose to US$1.33 billion last year, compared to $224 million in 2001.

With revenues totaling $857 million in 2006, 22% higher than the previous year's $703 million, Supermaxi-La Favorita projects to increase that amount by no less than 20% this year, placing it among the most successful business groups in Latin America. Despite its homegrown success, the group has no immediate plans to expand outside the country. "We still have a lot of market to cover in our country," says Javier Vasquez, marketing manager for the chain.

Controlled by the Wright family since its founding, the company went public in 1975, allowing for an accelerated and sustained growth. "Currently we have more than 7,500 stockholders, between individuals and companies," says Vasquez.

According to Diego Garces, former head of the national stock market regulator, the group's advantage was in seeking to going public when that type of operation was virtually unknown in Ecuador. "Now its shares are the most liquid in the market and that reflects the magnitude of the enterprise," he says.

Ramiro Galarza, manager of LRG Consulting, says La Favorita has achieved a level of competitiveness superior to that of similar consortia in neighboring countries such as Peru and Colombia thanks to innovation and competitive pricing. However, he warns, there is a need for a law that promotes competition within the industry, to put the brakes on the effects of a monopoly in the service sector.

Conglomerate. The group is made up of 21 enterprises, foremost among them El Jugueton, the region's largest toy store, which was born from an alliance with business people from Central America and South America. In 1986, Comhogar was created, which groups together specialized brand stores such as Sukasa, a seller of home goods, and Radio Shack, a world brand concessioned in 1992 to Cirkwitos, a subsidiary of Comhogar. Bebelandia, Bebemundo and Yazzu, long-established Ecuadoran companies, became part of the consortium in 1996.

October 1988 saw the birth of Tventas, the first TV shopping network in South America, which sells the group's products, and the Interwood Shopping Network. Electricity generation and distribution is another sector into which the group moved in 2004, when it received an $18 million loan from the Andean Development Corporation to build its own mini hydroelectric plant of 12 megawatts, of which the company uses 70% and sells the remaining 30%.

Among its other concerns are a poultry plant, fruit and vegetable plantations, pork farms, cattle ranches and other production lines that have allowed it to sell in Ecuador 440 products that carry the Supermaxi label. According to Vasquez, the policy of offering store brand products was born in 2002 and the list of items will continue to grow.

In 2005, the Wrights, seeing how their Supermaxi supermarkets were crowded, placed their bets on the construction of Megamaxis, introducing in Ecuador the concept of hypermarkets. They were so widely accepted that this year they will finish building the fourth Megamaxi in Quito, a second one in Guayaquil, aside from one launched in the central part of the country two years ago.

Meanwhile, the group continues with positive contributions to the Ecuadoran economy. Vasquez points out income taxes paid in the sum of $10 million and another $60 million in import duties. The group also generates more than 4,500 direct jobs and at least 100,000 indirect jobs, among them jobs with suppliers, transport workers and others.