You are Elena Zúñiga Bardales, chief executive of Andicorp Manufactura, a Peruvian appliance maker with plants in Lurín and Arequipa. The board wants S/ 47 million out of operating cost in two quarters, and your largest client decides in five months whether to stay. Before anything has a saving attached, you must say what the tooling shop is.
The situation
Andicorp makes small kitchen appliances under its own Hogarsa brand and manufactures under contract for two multinationals: S/ 520 million of revenue a year, a 12% EBITDA margin and 1,850 people. About 70% of its inputs arrive through the port of Callao. In the first quarter of 2026 a weaker sol and a nine-week port backlog pushed the cost of those inputs up 22%, while home demand cooled. On unchanged operations the margin falls to a projected 7.5%, and net debt moves from 2.9 toward 3.4 times EBITDA against a bank covenant capped at 3.0 times.
The board has frozen growth capital and wants 15% of operating cost, about S/ 47 million, out within two quarters, without losing the quality edge that wins contract renewals. The largest of those renewals is five months away: a multinational buying S/ 166 million a year, 32% of revenue, whose procurement team has tabled a cost-and-service clause while a Mexican contract manufacturer quotes it 8% below Andicorp.
The obvious target is the in-house tooling and mold shop. It costs S/ 11 million a year in fixed cost, runs at about 60% of capacity, and is the function competitors most often buy in; an outside toolmaker has quoted a saving of about S/ 4.5 million a year. It is also the origin of Andicorp's quality reputation and of the speed with which it turns a client's design change into a producible part. Fernando Velarde, who chairs the board for the founding family, said on Friday that the shop is what the family built the company on. You have argued for three years that "we make almost everything ourselves" is a habit, not a plan.