Virutex Ilko | Strategy

Constantly shifting strategy showcases company's flexibility

Chilean consumer goods company Virutex Ilko has produced and sold some of the most sought-after products since the inception of the COVID-19 crisis: cleaning supplies and cooking accessories. Sales of both groups of products skyrocketed as families sheltered at home to slow the spread of the virus. According to Juan Martín Monsalve, the company’s chief executive officer, the pandemic modified some of the company’s strategic objectives while accelerating other plans – demonstrating a capacity to shift strategy quickly in reacting to shocks in the marketplace.

“We’ve had to move fast, make quick decisions, and change direction when needed, thinking long term but also operating on a daily level in a pandemic,” Monsalve says.

The 76-year-old family-owned company got its start in the cleaning products business literally from the ground up – selling disposable sweeper-mop pads. Today, Virutex Ilko manufactures more than 2,000 products representing kitchen and cleaning goods under one roof; the Virutex brand includes items such as disinfectant wipes, while the Ilko label markets kitchen essentials such as utensils and cookware. The company has factories in Chile, Colombia, and Peru. It has nationwide distribution operations in Argentina and Mexico, as well as importers in other parts of Latin and North America. More than 1,000 workers supply its products to retail chains, small convenience stores, and institutional customers. In response to the pandemic, the company began direct-to-consumer sales, launching an e-commerce site carrying products from both sides of the business.

“We've had to move fast, make quick decisions, and change direction when needed, thinking long term but also operating on a daily level in a pandemic.”

With growth comes environmental responsibility, Monsalve says. Chile is the second-biggest producer of waste per capita in Latin America. The country banned the use of plastic bags in 2018, providing a two-year period for retailers to completely phase out the bags. In 2020, Virutex Ilko opened a new manufacturing plant that accepts recyclable material and turns it into recycled garbage bags. The process involves taking in plastic, making pellets, then turning those pellets into new bags. The site has the capacity to receive 10,000 tons per year, and has created about 400 jobs.

“We're changing packages and products, and working with our vendors to reduce their carbon footprint, too,” Monsalve says. “We want to be as sustainable as possible, and we’re committed to science-based target initiatives in the markets where we operate.”

Another dimension of the company’s strategy involves investing in its suppliers – providing a financial boost to keep up with product demand. The deals involve favorable terms that allow the manufacturer to fulfill orders. For instance, Monsalve describes the high-growth category of wet floor wipes. Companies that have the machinery needed to cut and produce the wipes have been stretched thin in the pandemic so Virutex Ilko helped one of its Chinese suppliers buy new machinery to keep up with demand.

“These are long-term relationships and that’s part of our vision with our suppliers,” Monsalve says.

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