When Alberto Vollmer appeared with Hugo Chávez earlier this month on the Venezuelan president's Sunday television show, viewers could have been forgiven for thinking someone had handed out the wrong script.

At first glance, the president's supporters might have considered the tall and fair-haired Mr Vollmer as just the sort of "rancid oligarch" that the rumbustious Mr Chávez regularly insists is plotting the overthrow of his leftist "revolution" for the poor.

But, instead of grilling a hapless victim, Mr Chávez heaped praise on Mr Vollmer as a model entrepreneur. It would seem that Mr Chávez shares common ground with the high priests of Harvard Business School.

And for good reason: Mr Vollmer's management of Ron Santa Teresa, a rum company, is exemplary, both in turning round a near-bankrupt enterprise and in piloting it through a sea of social and political obstacles that would have left many businesses adrift.

Today, Venezuela's Santa Teresa produces one of the world's finest premium rums, unique in its distilling method, regularly winning medals for flavour.

Mr Vollmer, 37, has strong feelings about the social role of an entrepreneur. "It is the responsibility of those with most talent, wealth and vision to safeguard society's health." He warns: "To not pay attention to this reality can lead to enormous costs in the long term."

The road to success for Mr Vollmer has been an unusual one. After college in France and training as a civil engineer he worked for four years in a Caracas barrio, or slum, helping the poor to build homes. He eschewed the rum business that had been passed down through four generations to his father.

The Santa Teresa hacienda, or estate, located in a lush valley 60km west of the capital, was founded in 1796. It was acquired by Mr Vollmer's great-great grandfather, a German adventurer. Santa Teresa began to produce rum in 1896, and modernised its distillery through the 20th century. In the 1970s it expanded its portfolio of rums and forged an alliance with a local whisky distributor.

But the company suffered in Venezuela's volatile economy. Currency fluctuations led to financial problems, whisky imports crimped the rum market and Santa Teresa faced tougher competition. Ron Cacique and Pampero, the two main competitors, were taken over by Seagram and United Distillers, respectively. (Diageo later took over United Distillers.)

In an attempt to hold its position, Santa Teresa sold 20 per cent of its shares to Allied Domecq. But after a clash of management styles and a succession of chief executive officers, Santa ­Teresa had lost its sense of direction.

It was not until he entered the Santa Teresa distillery in 1996 as a bottling supervisor that Mr Vollmer realised the source of the family's wealth was on the rocks. The banks were calling in overdue loans, and some board members were plotting. "It was in bad shape," recalls Mr Vollmer.

Mr Vollmer and his brother, Henrique, decided to propose a management takeover plan to their father, who was then Venezuela's ambassador to the Vatican. "We got on the first plane to Rome and we said to him: ‘If the company is to be saved we need a major restructuring, and soon'," recalls Mr Vollmer. "He agreed."

In 1999 the board granted Mr Vollmer full decision-making powers, and he began a painful restructuring. "It was a critical moment. We had lost two-thirds of our capital and we had $25m in overdue debts," he says. "The company didn't know if it was a producer or an importer." Mr Vollmer fended off threats to call in the receivers and restructured outstanding loans. Crucially, he also refocused the mission of the company.

"The aim was to refocus on our core product - rum - and dignify the brand," he adds. Most of the company's 260 products were eliminated, leaving only 17. Mr Vollmer says: "We focused on them and grew by 25 per cent in three months."

While Santa Teresa's sales since 1998 have steadily risen, to a projected $39m this year, its margins have been transformed. After several years in the red, the company recorded a profit of just over $1m in 2001. This year Mr Vollmer forecasts it will reach almost $5m.

The world rum market accounts for about 60m cases per year, but Santa Teresa's strategy is to aim for the top quartile of the market, specifically drinkers who favour premium rums. Rum used to be seen as a commodity favoured by sailors, and in Venezuela the drink of prestige is still whisky. But trends are changing.

Exports are expanding. From only 2 per cent of total sales five years ago, export revenue is forecast to reach 15 per cent this year.

Turning around Santa Teresa's finances, however, has been only half the challenge. Venezuela under Mr Chávez, in power for the past seven years, has been gripped by political turmoil, presenting perhaps the toughest business environment in the Americas bar Cuba.

"We survived the restructuring. But immediately a new front opened up: the social one," says Mr Vollmer. "In February 2000, only 15 days after completing the debt restructuring with the banks, we were invaded."

About 250 local families took over 30 hectares of the 3,000ha estate, demanding housing. The land invasion was organised by a former soldier and comrade-in-arms from Mr Chávez's military days. Encouraged by the government, there has been a surge in land invasions in recent years.

Enter Mr Vollmer's experience in the Caracas slum. "We had to rethink our ideas. I had learnt a lot about the problems in the barrios. It was clear: if we didn't invest heavily in the social area, we were not going to survive."

Mr Vollmer and his closest managers offered to donate the land, on the condition that the company design a housing project. Today, the area has about 100 plots with family homes.

Mr Vollmer, however, argued that what was needed was not philanthropy, but sustainable development. "We completed the housing project but realised that we had to invest in the community to avoid this happening again." Santa Teresa has experimented with local tourism to develop the adjacent town, blighted by unemployment, and sponsored sport and medical facilities.

Perhaps the biggest test came in 2003, when members of a local gang attacked one of Santa Teresa's security guards. Mr Vollmer's response was again enlightened: he proposed to two of the youngsters that either they work for three months without pay or they would be handed over to the police. The whole 20-strong gang turned up. To work.

The idea was christened Project Alcatraz, and adjusted to allow the youths to work in the morning and attend social values classes in the afternoon. Since Alcatraz's inception, four gangs have passed through - and the local incidence of crime has fallen by 35 per cent.

Pedro Gallardo, 32, who spent 18 months in Project Alcatraz, says: "Alcatraz has been fantastic. Your wallet wouldn't be safe in your pocket when I was around. I have learnt to be less of a rebel."

Alcatraz has now been expanded to include a housing construction workshop. "It is an issue of turning a crisis into an opportunity," says Mr Vollmer, who adds that while Santa Teresa invests about 2 per cent of its profits in the social projects, it has attracted about three times that amount from other sources.

The Andean Development Corporation, or CAF, was the first institution to back Project Alcatraz. Ana ­Botero, CAF's director for cultural and community development, says it is a model that should be ­replicated elsewhere. Mr Vollmer has already been invited by Colombia to advise on its programme to return guerrilla fighters to civilian life.

Experts are also convinced that the model adopted by Santa Teresa is not just prudent politics, but also the most appropriate blueprint for business success in places with multiple problems such as Venezuela.

"The management of Santa Teresa has wisely recognised that its viability and profitability are dependent not only on its ability to produce a superior product, but also to generate social value for its surrounding community," says Professor James Austin of Harvard Business School's Social Enterprise Initiative. "Generating business and social value synergistically is the new paradigm for success throughout Latin America."

Mr Vollmer is certain Mr Chávez would agree.

ALBERTO VOLLMER'S VIEW ON PHILANTHROPY

■On the societal role: "It is a mistake to believe that the responsibility for a society's well-being is the exclusive remit of the state. A company can grow fantastically but still leave its environment mired in poverty. The ultimate responsibility for ensuring a community's health lies with the entrepreneur.''

■On why philanthropy is good for business: "The wealthy can profit from the rich, but not from the poor. The objective is to undertake activities that foster development and reduce poverty. That can be investment in infrastructure, education or technology."

■On restructuring: "It's more important to do anything and get it wrong than to not do anything at all and blame others.''

■On how to execute community investment: "A company needs to define the ‘territory' in which it plans to influence development, and then agree on a plan with the community before inviting the public sector to execute the ideas."

Copyright The Financial Times Limited 2008