This research concerns the history of an enterprise founded in l908 by four brothers who were members of the Colombian social elite. It is not completed but is sufficiently advanced to allow the presentation of some findings and the description of the methodology.

First known as Caballero Hermanos, the initial project was rather unpretentious. The intention was to found a chocolate factory, a small sugar refinery and a distilleryon a privately-owned rural estate (hacienda) situated in an isolated rural zone of the province of Santander, some 200 kilometres from Bogotá. But in l912 the project changed when Belgian and French capital allowed the creationof a textile factory, which in l916 represented about 10% of Colombian textile industry. The preceding activities were expanded and a wheat mill was added to this agro industrial complex, which then was called Sociedad Industrial Franco Belga (SIFB). However the founders lacked industrial and commercial experience and had little capital of their own. Furthermore they were unable to appreciate the consequences of the isolation of the enterprise which was situated in a mountainous region with no means of communication other than muleteer paths. There were no other industrial activities in the area, no commercial and financial services, no qualified labour accustomed to industrial discipline. As for the foreign investors, it is obvious that they had no more realism than their Colombian associates. All these unfavourable circumstances led to the failure of the firm.

One of the aims of this research is to explain the causes of this failure : why it was not possible to make this experience a model for a way of rural and industrial development.

This study brings new elements to the history of the industrialization of a sector which was the most dynamic in Columbia during the first half of the 20th century, namely the textile industry. It provides a comparison between the situation of a declining region about whose industry close to nothing has been written (Santander) and the situation of the Medellin province (Antioquia) about which there are quite a number of studies.

The obstacles that were met in this very early example of foreign investment in Colombian industries are studied. The last thing that the founders expected from their association with foreign bankers was difficulties, believing, on the contrary, that this alliance would be the best guarantee of the modernization of the enterprise.

The lack of experience of the Colombian founders and the fact that the European investors did not know the country were the decisive factors in the failure of the Sociedad Industrial Franco Belga.; The Caballero were members of the land-owning aristocracy. They invested, taking out mortgages on their landed property, whereas their rivals in Medellin had progressed during several generations, accumulating considerable capital in gold mines and in the transformation and commercialisation of coffee. The research helps understand what initial conditions in addition to the characteristics of the investors brought about the failure of this project. Besides the factors already mentioned, it is necessary to take into consideration the lack of availability of raw materials, the technological backwardness and the maladjustment of the products to the market

To fully understand this project and its evolution it is indispensable to analyse the mentalities of the founders and of the main managers of the firm The personality of Lucas Caballero Barrera is particularly studied. He was an influential thinker as well as a actor in the political, administrative and economic modernization of Colombia. This lawyer, after having been a General in the liberal armies during the Civil war known as the “One Thousand days war” (1899-1902) was one of the signers of the peace treaty that put an end to this conflict. Later he became an eager defender of the national reconciliation between liberals and conservatives.

The research will also include a study of the attitudes and strategies of the Belgian and French management that led the firm without much success between l918 and l944. The relations between the workers and the proprietors are particularly interesting. It was marked by a conflict of mentality between the European management, whose attitude was often latently colonialist and the labour force, of rural origin, which soon organized in order to defend its rights.

The transformations in the social and economic situation caused by the sudden appearance of an industrial undertaking in an isolated rural region are also contemplated.