Mexican tycoon Carlos Slim's first steps in business: a candy store under the stairs and a savings book

16/04/2021

Mexican businessman of Lebanese descent, Carlos Slim Helú, is the richest man in Mexico, and one of the richest in the world. In addition, he was considered the richest man in the world in 2010 by Forbes magazine. Slim owns several companies that have made his fortune grow to the level we know today. Today, his fortune is estimated at 64.5 billion dollars, but how did the businessman's fortune begin?

Magnate Carlos Slim gives his opinion on the Government's economic performance. Photo: Flickr
Magnate Carlos Slim gives his opinion on the Government's economic performance. Photo: Flickr

Since he was a child, Slim began to develop his taste for business, since at the age of 10 he used to buy candies and resell them to his uncles and cousins, installed under a staircase of his house, located in Lincoln Park. He studied Civil Engineering at the National Autonomous University of Mexico (UNAM), where, at the same time he was studying, he taught algebra and linear programming.

From a very young age, he began to invest in the purchase of businesses, something he learned from his father, Julián Slim Haddad, a Lebanese immigrant who arrived in Mexico at a very young age, in 1902, and who in our country managed to have businesses that gave him a very good economic solvency.

Slim received his first entrepreneurial teachings since he was a child, since his father gave each of his children a savings book along with his "Sunday", week by week so that they could learn to manage both their income and their expenses. Julian would review this book with his children, they would see the expenses, the purchases they made, and the movements they made. In this way, Julián Slim's parents kept their own personal balance sheets and saw how their own patrimony was developing.

At the age of 12, Slim was able to open his first checkbook and buy shares of Banco Nacional de México. At the age of 25, in 1965, Slim began to establish what would be the beginning of what is now known as Grupo Carso, as he founded Inversora Bursátil and became the chairman of its Board of Directors.

Among other things Carlos Slim has done, he created, in 2000, the Mexico City Historical Center Foundation, with the objective of rescuing and revitalizing the area. 

In 1966, he founded Carso Real Estate, three months before marrying Soumaya Domit. In 1982, when the country was going through a severe crisis, Slim and his Grupo Carso began to invest intensely and actively and acquired Cigatam, Hulera el Centenario, Bimex, Reynolds Aluminio, among others. Later, the purchase of Seguros de México was completed, thus forming Grupo Financiero Inbursa.

In 1967, he founded and presided over the companies Promotora del Hogar, S.A., dedicated to the commercialization of housing, and GM Maquinaria, in the purchase, sale, and rental of construction equipment. Later, in 1968, he acquires and manages Mina el Volcán SSG Inmobiliaria, S.A. In 1969, three new companies start operations: Bienes Raíces Mexicanos, S.A., Nacional de Arrendamientos, and Invest Mentor Mexicana. In 1976 acquires 60% of the label and calendar printer Galas de México, significantly improving its operation.

In 1980 Grupo Galas was created, today Grupo Carso, whose main activities at that time were industry, construction, mining, commerce, food, and tobacco. In 1985 Grupo Carso acquired Artes Gráficas Unidas, Fábricas de Papel Loreto and Peña Pobre, as well as the majority of Sanborns and its subsidiary Dennys. In 1990, it acquired TELMEX, in partnership with SBC and France Telecom, and the following year the Calinda Hotel chain (today, OSTAR Grupo Hotelero), among several others.

Slim Helú received the Medal of Honor for Business Merit from the National Chamber of Commerce of Mexico City in 1985. In 1986, the Carso Foundation A.C., now the Carlos Slim Foundation, was created as a non-profit philanthropic organization with the purpose of serving Mexican society: to contribute to the development and formation of human capital through permanent programs of high impact and coverage.

At the end of 1990, Slim won the bid to acquire Telmex, together with Southwestern Bell and France Telecom, and later Carso Global Telecom, Telmex's holding company, was created. The Telcel brand is also created, from Radiomóvil Dipsa, S.A. de C.V. From then on, Slim has acquired several companies that have helped him achieve what he has today.

CarlosSlim's little-known businesses outside of Mexico

The Mexican magnate has an appreciation for some companies that helped him build his empire, but this has not stopped him from diversifying into sectors ranging from car racing to bakery and confectionery. Mexican businessman Carlos Slim Helú is known in Latin America not only for being the richest man in the region but also for his large investments in the telecommunications and commodity sectors.

But beyond these two areas with large investments, Slim has in Mexico a series of businesses that are little known beyond Aztec lands and include stationeries, cafes, restaurants, chocolates, the health sector, music, computer sales, clothing, and cigars, among others. In the short term, it is not ruled out that some, such as Sanborn's chain of stores, restaurants, and coffee shops, may have an expansion in countries such as Brazil or Argentina, two economies that are currently among the priorities of the entrepreneur.

For those who live in Mexico, the name Sanborn is as common as talking about the weather. With 165 branches in the third quarter of 2017, nine fewer than in 2016, it could be said that this business is present throughout the national territory. For Slim, the money is important, but also the affection he can develop for some of his businesses, and two of the most beloved are precisely Sanborn and the Sears stores, a brand that declared bankruptcy in the United States, but that the tycoon has kept alive in Mexico as one of the favorites of the upper-middle class.

"Sanborn was the first company registered in the stock market that Slim bought, it had a huge social prestige," Luis Enrique Mercado, a journalist who met Slim in the early seventies when he was a broker at the Mexico Stock Exchange, told Infobae Mexico. Securities (BMV). It was founded in 1903 in the center of Mexico City by Walter Sanborn, an American pharmacist, under the name of "Sanborn American Pharmacy."

After the Mexican Revolution of 1910, Sanborn rented and remodeled a historic building known as "La Casa de los Azulejos". He turned it into a luxurious restaurant, tea room, soda fountain, gift shop, pharmacy, and candy store. It became the meeting place of the high society of the time. In 1946, after opening a series of branches in the capital, Frank Sanborn sold the chain to Walgreen Drug Company of Chicago, which took over until 1990. Despite the transaction, the coveted Casa de los Azulejos joined the portfolio of the company until 1978 when the heirs, who rented it to the owners of the Sanborns stores, sold it for the high cost of maintaining it.

Eleven years later, the Mexican entrepreneur appears on the scene, buying most of the company's shares and initiating the restoration of the historic building built in 1737 as a priority task. The chain handles several own brands, such as the traditional chocolates that are also owned by the businessman, who at some point participated in the confectionery through Hershey's, in which he had a package of shares.

Sanborn became one of the three pillars of Grupo Carso, with sales exceeding 49,768 million pesos in 2017 (USD 2,603 million). The holding company has Sears brands in its portfolio; the iShop stores, a partnership with Apple; MixUp, dedicated to the sale of music and tickets for big shows, the luxury stores Saks Fifth Avenue and DAX stores, dedicated to the sale of perfumery and cosmetics.

"He has always been a visionary man since he was the auction floor operator at the BMV." In the early seventies, he bought a bankruptcy printing company called Galas, also a sand mine, he was always looking for diversifying, "Mercado recalled. "He has done something very remarkable with brands that were already in the history of the United States such as Sanborns and Sears, where he has not been very successful is in Saks," he says.

Mercado adds that the tycoon was always clear that Latin America was a big market and that the future of his investments was in countries like Brazil or Argentina, which after his economic crises have given him the opportunity to apply the formula that has always worked for him. : buy cheap and sell expensive. It has also been able to land investments that Mexican regulation has complicated, such as pay television.

"The Latin American market was very clear for many years, and by 2012 or 2013 it was saying that the GDP (Gross Domestic Product) per capita of the region was going up, that from USD 10,000 it would go to 14,000. for him, he had to go to Brazil and Argentina, and now after Mexico is where he is most present, "he said.

The little-known businessman's business does not end with clothes. One of the companies that he keeps close to his heart, like Sanborns, is Cigarrera La Tabacalera Mexicana (Cigatam), which he bought in 1981. He produces brands of cigars such as Marlboro, Delicados, and Benson & Hedges. Although in 2007 it sold most of the company to Philip Morris it retains 20% of the stock package.

For the tycoon, this company is the model of its success, since, during the first 25 years after its purchase, it gained 1.5% on average of the market share every year.

In the Mexican crisis of 1982, when the country was broken and nobody dared to invest, Slim took the opportunity to buy a whole series of companies at very cheap prices, no matter what area they belonged to. Thus, it was made of important shareholder packages or of the total of companies like one called Hulera El Centenario; Bimex, the manufacturer of bicycles; the hotel chain Calinda, now known as Oscar Grupo Hotelero; the tire companies Euzkadi and General Tire, insurers ... The list is endless, everyone wanted to sell to the only man who ventured to buy in those years of instability.

In the mid-nineties, he bought El Globo, a chain of confectionery stores founded in 1884 by the Italian immigrant family Tenconi, then sold to the Mexican Bimbo. In 2000 he ventured into the sale of office supplies through the US chain OfficeMax, where he bought a 7.5 percent share package. A decade ago, through its Impulsora del Desarrollo y el Empleo en América Latina (IDEAL) and the Star Médica Group, he ventured into the business of building private hospitals. One of these projects, located in the State of Mexico, adjacent to the Mexican capital, includes a shopping center.

The commercial plazas are another of the magnate's businesses. To the south of the Mexican capital, it has two that are of its property: Plaza Loreto and Plaza Cuicuilco. Both were old paper mills from the late nineteenth century that he rescued to become thriving businesses. "He is also associated with the expansion of Santa Fe Shopping Center in Mexico City (one of the most expensive in Latin America), which is another place that was made with Slim's capital," Ignacio Martínez, coordinator, told Infobae. from the Foreign Trade Analysis Laboratory (Lacen), a Mexican think tank dedicated to business promotion.

Justo is Cuicuilco square which houses offices of its various companies, including those of Grupo Financiero Inbursa through which the bank of the same name operates. Due to its level of capitalization, Banco Inbursa is considered by the National Banking and Securities Commission as the seventh most important in the country. Although he is fond of baseball, particularly the New York Yankees, in 2012 he became the new player of Mexican soccer with the purchase of 30% of the clubs Pachuca and León of the first division. Later, along with Pachuca, he bought the rising team Estudiantes Tecos.

Excited with the purchases in Aztec soccer, also in 2012 he invested 2 million euros in the Spanish club Real Oviedo, becoming the majority shareholder. However, it was not the first time that Grupo Carso invested in sports; Through the Telmex team, it sponsors Mexican pilots of different categories. After 23 years of absence, he managed to take Formula 1 back to Mexico.

The sky has not escaped from the tentacles of the entrepreneur. In 2007, he invested in Volaris, a low-cost Mexican airline, but in 2010 he sold his share package. Through its company, CICSA obtained the construction of the terminal building of the new International Airport of Mexico (NAIM), a four-story structure through which an estimated 68 million people were thought each year. However, the construction of NAIM was cancelled by President Andrés Manuel López Obrador.

Until the end of 2015, it was estimated that he owned approximately 180 companies. Not to mention his first purchase, in the late sixties, a small business called Embotelladora Jarritos del Sur, a soft drink factory.

Carlos Slim's 5 favorite books

In the book Slim. Political Biography of the Richest Mexican in the World, written by one of the most renowned journalists in Mexico, Diego Enrique Osorno, the five favorite books of the Mexican magnate are revealed, ranging from biographies of successful men to business stories.

The first of these is the book Ling: The Rise, Fall, and Return of a Texas Titan, by author Stanley Brown. This book, published in 1972, tells the story of Jim Ling, a successful American businessman who had only a high school education and was an electrician. He owned a successful company named Ling-Temco-Vought, which declined in the '70s due to an economic crisis in the United States. Ling died in 2004 of esophageal cancer.

The second book mentioned is Vesco, by American writer Robert A. Hutchinson. The book tells the story of American businessman Robert Vesco, the son of an Italian father and a Yugoslavian mother who, despite being uneducated, became a millionaire at the age of 30. Vesco was accused of defrauding a Swiss company, for which he was forced to flee, and settled in Cuba until he was also accused of defrauding a nephew of President Fidel Castro.

Another one of Slim's favorite books is Jean Paul Getty's A My Way and How I Made My Fortune. Getty was an American oil businessman, founder of the Getty Oil company, and became one of the first people to amass a fortune of more than one billion dollars. In these books, Getty recounts his life and some of the events that helped him build his empire. He died in 1976.

The fourth book he mentions is Mr. Baruch, by Margaret L. Coit. This book tells the story of Bernard Baruch, an American businessman who made his fortune in the sugar market. He was one of Wall Street's best-known financiers. He was a war advisor to President Franklin D. Roosevelt when the United States entered World War II. He died in 1965.

The Fords. An American epic, by Peter Collier and David Horowitz, is the last book mentioned. It was first published in 1987 and tells the story of the three generations of the Ford family, focusing on the conflicts that existed between fathers and sons when one of the leading automotive companies in the United States and the world came into being.

In Diego Enrique Osorno's book, he narrates how Slim, who is the son of Lebanese immigrants, added his mathematical ability to his business vision to create his global emporium, in a country where there are 50 million poor people. It narrates the magnate's origins, his family and social ties, his financial maneuvers, and his personal passions, one of them, baseball.