Latam, Falabella, Nike and Norwegian, among which announced their departure from Argentina
The pandemic and the economic consequences that the quarantine caused in the private sector triggered business decisions such as those announced yesterday by the Chilean retail chain Falabella, which will close four stores in Argentina and seek a strategic partner in the coming months. In this case, the isolation by Covid-19 and the impact on the results was the reason for the decision, but many international companies had been analyzing the business model in the country since before the implosion of the virus.
Entrepreneurs say that although the current situation does not leave a choice for many companies -especially of the items that are still paralyzed, as was the case of Latam-, the lack of rules of the game, the growing tax burden and the signs against investment help in making these types of decisions.
« I think it is a very bad sign and reflects the investment climate that exists in the face of so many negative signs for private investment with changes in the rules of the game, new taxes and restrictions of all kinds on private activity. In addition to what happened with Lan, Walmart’s intention to also sell, the cancellation or postponement of investments (Amazon, for example) and the transfer of auto parts companies to Brazil ”, he told Infobae the coordinator of the Convergence Forum and director of IDEA, Miguel Blanco.
The Swiss Medical businessman added that although he does not know of specific cases, he believes that There will be in the future « if there is no change in the measures contrary to private investment and the freedom of decision of companies. »
« I do not see a stampede, but I do see one more bleeding effect where changes in business models will begin to register, although others will invest; it will depend on the sector. Anyway, if we compare with 20 years ago, the Argentine market got smaller; returns were reduced. Now the phenomenon of the pandemic is added, ”said the head of another important business entity.
And he added that if the projection of some of the most important sectors of the economy is analyzed, the expectations are not good. In the case of tourism, it is being thought that the same levels of 2019 will be reached only in 2024; in energy matters, if progress is finally made in a new regulatory framework, the same production values would be reached as last year only in 2023; in telecommunications, all investment projects for the arrival of 5G were suspended (for USD 3,500 million) as of decree 690; while in the knowledge services sector, companies are still awaiting the enactment of the new law.
“I do not see the Latam process as a trend, but I do not rule out the closure of plants or a change in the business model. It happened with Nike, which went to a franchise model and they reduce the risk ”, considered the businessman.
The Chilean retail store will close four stores in the country and seek a partner
At the UIA, the concern is great. Although activity is improving, in some sectors more than in others, « there is uncertainty wherever you look, in the midst of the pandemic and with a government that has only been in office for eight months and is full of inmates, » said sources from the factory headquarters.
Although there is good dialogue with the authorities and, unlike the government of Mauricio Macri, industrialists admit that there is a clear defense of manufacturing activity by Alberto FernandezIn the institution, they question the lack of an interlocutor to guide entrepreneurs on how they plan to solve the problems of the macroeconomy. « We have an exchange gap, loss of reserves, controls of all kinds. The roadmap is unclear. And there is no seduction to foreign industrial capital”Affirmed a UIA leader.
“Dismantling a business is not the same as an industry. Foreign industrial capital must be seduced so that it does not go to Brazil or Mexico. Although we do not have a survey, it is natural that the exodus occurs in the sectors most affected by the current crisis and that are not tempted to stay ”, added the businessman.
The Association of Autocomponent Factories (AFAC) published a report a few weeks ago in which they affirmed that in the last ten years some 47 companies had left Argentina, and 17 in the last year. « In the case of those who made the decision now, I think it was because the pandemic created conditions to accelerate decisions that were being evaluated.« , Said the president of the entity, Raúl Amil.
Among those that decided to leave Argentina this year are the paint company Axalta; the Saint-Gobain Sekurit and Basf windshield, which announced that it would stop production next year.
“The exodus is multi-causal. The main cause was the lack of scale. Many companies decided to concentrate their operations in Brazil and supply Argentina from there. The country’s competitiveness problems are more than obvious. For many years we have come with a high tax and labor burden. And the low profitability that occurs in companies meant that we have not had more than exoduses. It is very worryingNot only because of the jobs that are lost, but also because the departure of suppliers takes away the sustainability of the industry ”, the businessman remarked.
I kept reading:
Laspina: « No country in the world raised taxes amid the pandemic »
Moroni, Minister of Labor: « I do not see that there is a particular situation that causes the exit of companies »