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By Jonathan Raed. Published in noticias.perfil.com
After a hard 2018 product of the greatest drought of the last 50 years, the agricultural sector recovers with a good harvest. From 2016, Los Grobo faces a stage of integral restructuring that left Gustavo Grobocopatel with 24% of the company and the Victoria Capital fund -based in New York and South America- with the remaining 76%. Jorge Arpi, the company's new CEO, explains that the group "came to this crop well", but clarifies: "We do not see it as an extraordinary harvest, but as the level of production that Argentina is going to have as a floor from now, depending on the technical capacity of the producers and the area sown, which will not be reduced in the future".
Mariano Bosch, CEO of Adecoagro, is also enthusiastic: "We have good expectations, the crops are being developed under optimal conditions and we hope to have a good harvest. We are very excited about our dairy project, we are doubling the amount of milk produced and we have incorporated two new processing plants for our Las Tres Niñas and Apóstoles brands. " In relation to the more traditional crops such as corn, wheat and soybean, it remains "optimistic, despite the fact that international prices are going through a low cycle" due to the trade war between the United States and China. "In rice we continue developing new products of the brand Molinos Ala", adds the CEO of Adecoagro, which is listed on Wall Street and is in the hands of various investment funds such as EMS, Route One and Brandes.
Far from suffering a crisis, the citrícola tucumana San Miguel had a 2018 marked by expansion at the international level, with the incorporation of Peru and South Africa as new sources of production. Lucas Méndez Trongé, Director of Institutional Relations and Sustainability of the Miguens Bemberg group and the Otero Monsegur, estimates: "The production levels for this season will be relatively similar to the 2018 campaign, so we hope to continue strengthening our strategy of growth as a global multi-origin company based in Argentina. We expect to have new business opportunities in destinations such as China and India. With the advance in the maturation of grape, avocado and tangerine crops, we are going through a year of great challenges and opportunities for growth. With the incorporation of each new productive origin, San Miguel approaches the goal of maintaining relationships throughout the year with its customers."
When it comes to complaints, the macroeconomic situation does not mean a headache as big as the tax pressure. Arpi, of Los Grobo, argues: "We are an activity with a very large amount of its dollarized costs and of course with dollarized revenues. Therefore, there is no significant impact of the crisis. But we have had a retention scheme different from before because there have been retentions to wheat and corn. In turn, we have had a change in the retentions of soybeans. We want and we wish that this time it is fulfilled that the retentions are transitory. At the same time, because of the way in which the retention is armed, over time, the percentage impact it has on the business will become a little lower".
Méndez Trongé, from San Miguel, explains: "Beyond the value of the dollar, our activity has been dragging some obstacles that need to be resolved, such as the high national, provincial and municipal tax burden, infrastructure limitations, such as routes, ports, transportation , connectivity, etc .; the high labor costs in terms of social charges; the lack of accessible credits for the producer. And that's not to mention the closed markets or the requirement of phytosanitary protocols and tariffs of countries of destination in open markets".
For Méndez Trongé, "the challenge is to get governments to understand that to the extent that they mitigate the tax pressure the producer would turn those resources automatically to generate more activity and take advantage of existing business opportunities."
Bosch, from Adecoagro, says: "We are not oblivious to the macroeconomic situation, and its effects are felt to a greater or lesser extent in each of our businesses and their own processes. Mainly, the cost of financing is the first to suffer. " Exemplifies: "In 2017, we issue an international bond in terms and conditions that today can hardly be achieved." Regarding the variations in the exchange rate, he comments: "A high dollar negatively affects our internal mass consumption business; However, this negative result is mitigated by the effects it has on our export business".
In terms of production, Bosch says: "We have increased the peanut production area to supply our new processing plant as well. Argentine peanuts are recognized in the world for their exceptional quality and we hope to take them to new markets".
San Miguel. Méndez Trongé points to lemons: "They are undoubtedly a product highly valued in the market, both fresh and in its variants of processed products, such as oil, skin, pulp and juice. But also the oranges and tangerines without seeds begin to be very demanded at international level".
Los Grobo puts the focus on Agrofina, which represents 43% of its operating cash. It is the crop production company, "leader of local companies and the only one in Argentina that does all the process that has to do with agrochemicals: research, development, chemical synthesis, fraction and distribution".
With respect to its original business, the distribution of inputs (sale of seeds, fertilizers and agrochemicals in 30 locations) is 21% of the Los Grobo box; agricultural production, 16%, and the collection (origination and trading of grain), 20%. The company's objective is a five-year plan, which began in 2017. It includes a strong territorial expansion, with four new branches per year at strategic points in the country, reforms at the Zárate plant, changes in operation at the trading desk, Priority of profitability over volume and restructuring debt. This would allow to increase the operating cash flow by almost 500%: from US $ 20 million to 119 million. "This growth is unusual and seems very ambitious, but we are already spending half of that growth in the second year, which allows us to see that goal with great optimism," says Arpi. Los Grobo "grows in a consistent and balanced way; it does not depend on climatic factors or the dollar or any particular variable", he adds.
Automatic translation from spanish.