Instituto Nacional de Industria (INI) was created in 1941, by Act on September 25th, as an answer to the need to rebuild and promote Spanish production, two years after the end of the Civil War. INI should make the investments which the private sector was in no position to make, on the basis of an autarkic economy model, for which it received a 50 Million grant form the State.
In the Act on which it was created it was stated that: 'This Instituto Nacional de Industria, a public-law entity, is created with the purpose of promoting and financing, at the service of the Nation, the creation and recovery of our industries, especially of those which have as their main objective solving the problems originated in the defense requirements or which aim to favor our economic autarky, offering Spanish savings a safe and attractive investment.'
Taking as its reference the Instituto per la Ricostruzione Industriale (IRI), created by Mussolini in 1938, INI was conceived by its founder and first Chairman, Mr. Juan Antonio Suanzes, as an industrial policy tool, which allowed the State to intervene into the Economy, and as a result it would be a key element in Spain's economic, industrial and technological evolution.
As an industrial holding, INI carried out its activity through the incorporation of its enterprises and its participation in others, together with the private initiative, controlling their management and defining their strategies, according to the Government's industrial policy. Equally, as a financial entity, it provided financing, both directly and indirectly, to its enterprises, giving them the resources which they required for operating.
At the start, its assets were earmarked to building a strong industry in strategic sectors, mainly in three sectors - electricity, iron and coal, which made up what Suanzes called the 'industrializing trilogy'. Later, to these sectors would be added those of transport, shipbuilding, oil refining, automobiles and other.
As a result of the investment projects, INI was for many years the first Spanish corporate group, and due to its size, it was among the ten largest in the European Community. The number of companies in which it had a direct and majority shareholding during its history, as a result of their incorporation or acquisition, is close to 180, with a total workforce for the INI Group which, in 1980, exceeded 250,000 persons.
STAGES IN INI's HISTORY
The ups and downs in the country's industrial policy and in the economic situation itself determined the different roles which were given to INI at different times, and which marked the history of this institution:
Creation and growth (1941-1963)
It spans since its creation till the start of the 'Development Plans'. It corresponds to the period during the Chairmanship of Mr. Juan Antonio Suanzes, who reported directly to the President's Office.
During this period took place the most ambitious projects and the most important state-owned companies were incorporated, and which marked the history of the INI Group.
- 1942: Adaro and the E.N. Calvo Sotelo (ENCASO)
- 1943: E.N. de Aluminio (ENDASA) and E.N. Elcano
- 1944: E.N. Electricidad (ENDESA) and IBERIA
- 1945: EN. Hidroeléctrica del Ribagorda (ENHER) and E.N. de Autocamiones (ENASA)
- 1947: E.N. BAZÁN
- 1949: Refinería de Petróleos de Escombreras (REPESA)
- 1950: E.N. ENSIDESA and Sociedad Española de Automóviles de Turismo (SEAT)
During the fifties, the group of companies expanded and INI increased its presence in several industries thanks to the incorporation of some very significant companies:
- Electricity - Gas y Electricidad (GESA), Hidroeléctrica Moncabrill, Hidroeléctrica de Galicia, E.N. de Electricidad de Córdoba (ENECO) and Unión Eléctrica de Canarias (UNELCO).
- Oil Refining - E.N. de Petróleos de Aragón and E.N. de Petróleos de Navarra.
- Coal mining - E.N. Carbonífera del Sur (ENCASUR).
- Shipbuilding - Astilleros de Cádiz.
- Rolling stock manufacturing - La Maquinista Terrestre y Marítima (MTM).
- Chemical - Three state-owned cellulose companies, that of Huelva, Motril and Pontevedra.
- Defense - Santa Bárbara.
- Air transport - AVIACO.
In the Suanzes 'Age', technical questions dominated over financial ones. The objective was to maximize production, regardless of the cost involved. All is subordinated to the main objective of increasing the supply of goods and services as fast as possible, without any consideration being given to international competition. Until 1957, the financial resources for the holding and its enterprises came from the State, which provided them directly from the State Budget or indirectly through the issue of debt earmarked for that purpose.
Subordinated role and modernization attempt (1963-1976)
With the Stabilization Plan in 1959 begins the liberalization of the Spanish Economy, and there is a gradual opening to other countries, and the autarkic strategy pursued during the previous two decades is abandoned A period of growth begins, which follows market criteria, and the private sector has a bigger role.
During the years 1963-1969, characterized by the application of the Development Plans, INI played a lesser industrializing role and began to play a subordinated role, limited to providing support to the private initiative. Its function as a financial holding was predominant, accentuated because its financial channels were much altered, as the contributions by the State decreased and it was forced to seek resources in capital markets, which worsened its stockholders' equity.
As a result of Decree 480/1968 on March 14th, INI was attached to the Ministry of Industry, whose main objective was the promotion and support of the private sector. This transfer deprived it of its privileged link with the President's Office, and made it more vulnerable.
Since 1963 to 1969, the most important incorporations were the following:
- ENTURSA, for tourism promotion,
- HISPANOIL, for oil exploration abroad,
- UNINSA, which resulted from the merger of three Asturian iron & steel companies,
- HUNOSA, which was also the product of the merger of a number of coal mining companies in crisis,
- E.N. de Celulosa (ENCE), which was incorporated in 1968, and
- Astilleros Españoles (AESA), incorporated in 1969
Since 1970, there were significant changes in INI, among them the entity's reorganization, with the purpose of updating and modernizing its operations, and a financial reform, which renewed State contributions and allowed it to tap foreign markets. An attempt was made to instill into INI more entrepreneurial spirit and more financial rationality, so that the Group could operate with the efficiency and profitability characteristic of modern industrial corporations.
There was also a reorganization of its portfolio and a reshuffling of its shareholdings. Between 1970 and 1973, INI sold or liquidated more than twenty companies. At the same time, between 1970 and 1976, a number of companies were acquired or incorporated, among them: ENTASA, ENUSA and ENAGAS, in the energy industry; ASTICAN and ASTANO shipyards; in the fertilizers industry took place the incorporation of ENFERSA; in software services, SECOINSA, and the creation of ENDIASA, with LESA and CARCESA, in the food industry.
To the help of private enterprises in crisis en crisis (1976 - 1983)
INI's activity was deeply marked by the anti-cyclic role which was given to it in the seventies, as a result of the crisis in which found itself the international Economy since 1973, and which in Spain was aggravated since 1976 as it coincided with the difficult situation resulting from the political transition from dictatorship to democracy.
The arrival to the INI Group of private enterprises which were in a dire financial situation, especially during the years 1976-1983, turned this entity into a veritable private enterprises 'hospital', and as a result, it entered into a situation of overcapacity and growing losses.
Saving private enterprises in times of crisis had as its main objective preventing social tensions at a time of political uncertainty, preventing the closure of the enterprises and job losses. The most significant and relevant precedent of this kind of salvage activities was the nationalization of companies in Asturias coal mining area, which resulted in the incorporation by Decree 486/1967 on March 9th, of the company HUNOSA, which in 1970 became wholly owned by the State.
After HUNOSA, between 1971 and 1983 more than 25 private companies became part of INI, increasing its workforce with around 95,000 workers. Among these companies were ASTANO, BARRERAS, Astilleros Españoles, Babcock Wilcox España, ENSA, AHM, MTM, ATEINSA and SEAT, which was wholly owned by INI after the exit of its private investor FIAT.
A very significant event during those years took place in 1981, when the spun-off from INI of the oil and gas companies (EMPETROL, HISPANOIL, ENIEPSA, ENAGAS Y BUTANO) gave birth to the Instituto Nacional de Hidrocarburos (INH). On the other hand, INI incorporated six companies for promoting the economic development of relatively backward regions (SODIAN, SODICAL, SODICAMAN, SODICAN, SODIAR and SODIEX), and others such as PRESUR, ENISA, INISOLAR and CARBOEX.
Industrial reorganization and adaptation to the market (1983-1995)
Since 1984, within the framework of a global industrial policy which faced in a coordinated way the reorganization of industries in crisis, INI abandoned for good its subsidiary and supplementary role with respect to private capital, replacing it with that of competitiveness, with the aim of turning itself into a public holding which might compete with the private sector. To that end, it carried out a number of actions for adjusting its capacity, reducing its costs and reorganizing its finances.
Most of the industrial reorganization processes which took place within the INI Group continued until 1988 and mainly affected the enterprises belonging to the sectors such as Iron and Steel (ENSIDESA, FOARSA, AHM/SIDMED), Shipbuilding (AESA, ASTANO, ASTICAN and BARRERAS), Capital Goods (BWE, MTM, ATEINSA, ENSA, Fábrica de San Carlos), Coal Mining (HUNOSA and FIGAREDO), and Defense (BAZÁN CASA and SANTA BÁRBARA). But other enterprises were also subject to feasibility plans (Grupo INESPAL, ENFERSA, IBERIA, AVIACO, ..).
The shareholdings portfolio of INI experienced an important change during this period, as a result of the application of rationalization measures, which consisted in the following:
- Total divestments, between 1983 and 1991, in up to 16 majority owned enterprises, in order to guarantee their feasibility in a new and more competitive environment. Among them, SECONINSA, SKF Española, Textil Tarazona, Viajes Marsans, SEAT, ENTURSA, LESA, CARCESA, MTM, ATEINSA, ASTICAN, ENFERSA, ENASA or GEA. It also started the sale of part of its participation in a number of enterprises in the Stock Exchange. That was the case of such enterprises as GESA, ENCE and ENDESA.
- The reorganization of the Group of companies along industry lines, which resulted in the creation of groups of companies in some industries, as in electric power, with the ENDESA Group; in the aluminum industry, with the INESPAL Group; in the electronics industry, with the INISEL Group; besides other reorganizations in steel and iron, air transport or defense.
- The incorporation of enterprises taking into account the Group's strategic interests, in order to gain weight and capacity in specific industries.
Since 1989, INI was no longer an Autonomous Entity and became, in accordance with that stipulated in paragraph 123 in Act 37/1988, of the General State Budget for 1989, in a Public Law Entity, which continues to be attached to the Ministry of Industry and Energy and which must govern itself in accordance with private law and operate according to the profitability and efficiency principles, without prejudice to supporting the fulfillment of general interest objectives.
In 1992, due to the envisaged restrictions in state aid by the European Community, INI incorporates the public limited company TÉNEO, which brings together those of its companies which are able to be managed and compete in the market without those state aids (Act 31/1991, on December 30th, of the General State Budget for 1992). Those companies which due to their nature could continue receiving state aid, such as those belonging to defense, steel, shipbuilding or mining, continued being directly attached to INI itself.
In 1995, Instituto Nacional de Industria (INI) disappears, as a result of Law Decree 5/1995 on June 16th, which became Act 5/1996 on January 10th, for the Creation of Certain Public Law Entities. In accordance with the same norm, Instituto Nacional de Hidrocarburos is suppressed, and SEPI is created, bringing together TÉNEO and the INH companies, as well as the Agencia Industrial del Estado, to which were attached those INI companies which receive state aid.
Chairmen of Instituto Nacional de Industria
Juan Antonio Suanzes Fernández (October 17th, 1941 to October 30th, 1963)
José Sirvent Dargent (October 30th, 1963 to April 25ht, 1969)
Julio Calleja y González-Camino (April 25th, 1969 to April 24th,1970)
Claudio Boada Villalonga (April 25th, 1970 to February 1st, 1974)
Francisco Fernández Ordóñez (February 1st, 1974 to November 8th,1974)
José Mª Guerra Zunzunegui (November 8th, 1974 to March 14th, 1975)
Juan Miguel Antoñanzas Pérez-Egea (March 14th, 1975 to January 21st, 1977)
Francisco Jiménez Torres (January 21st, 1977 to May 2nd, 1978)
José Miguel de la Rica Basagoiti (May 2nd, 1978 to April 24th, 1981)
Carlos Bustelo y García del Real (April 24th, 1981 to December 22nd, 1982)
Enrique Moya Francés (December 22nd, 1982 to October 3rd, 1984)
Luis Carlos Croissier Batista (October 3rd, 1984 to July 28th, 1986)
José Claudio Aranzadi Martínez (August 1st, 11986 to July 12th, 1988)
Jorge Mercader Miró (July 15th, 1988 to October 11th, 1990)
Francisco Javier Sala Collantes (October 11th, 1990 to July 31st, 1995)