Exodus: List of Multinationals Announcing Their Departure From Argentina

RIO DE JANEIRO, BRAZIL – Falabella intends to flee the country. The news was announced yesterday and had a strong impact in Argentina. The Chilean retail store group has been in the country since the 1990s and operates over 20 stores. “We are looking for a strategic partner,” said the company, rather than directly announcing that they would be leaving or providing details of their exit strategy. Falabella is not an isolated case.

Throughout this year, before and during the pandemic – and even in the final stretch of 2019, after the PASO scandal and the currency depreciation – several multinational companies announced that they would stop operating in the Argentine market or would move part of their production to other countries in the region.

The context is unfavorable and, in some cases, the exit is not only related to the pandemic and the impact of quarantine. Argentina is the second-worst performing country in the development of foreign direct investment in the 21st century, out of 202 countries analyzed by the United Nations.

With the Chilean store chain, the list of multinational companies that announced their departure from the country, reducing part of their local businesses or moving them to other countries in the region, was enlarged.

Falabella

“Falabella is currently considering options to make its subsidiaries’ operations in Argentina profitable, which could include the incorporation of a strategic partner,” the company confirmed yesterday in a statement in which it clarified that it also launched a voluntary retirement plan for its employees and that it will soon close four of its 19 stores.

“The pandemic has expedited the process of retail digitalization and has impacted results. To adjust to this new trend and to make the operation sustainable in time, Falabella and Sodimac have decided to close four of their stores in Buenos Aires in the coming months,” stated from the Chilean holding company.

LATAM

The most relevant case to date was that of LATAM Airlines, which confirmed its departure from Argentina in mid-June when it began to negotiate with its 1,700 employees. Although many of them accepted the voluntary retirement package offered by the company, negotiations are still ongoing with another group of workers.

The Chilean-owned airline had been operating in Argentina for 15 years. Until flights were suspended due to the quarantine in late March, it operated flights to 12 local destinations and held a 16 percent market share.

Air New Zealand

Amid a very unfavorable global context, with the commercial aviation industry as one of the most battered sectors by the coronavirus, several companies announced that they will not resume their flights to Argentina after the current restrictions on preventive and mandatory social isolation measures are lifted.

Air New Zealand was one of the first – after LATAM and given the delay in the return of flights – among airlines that had routes linking their countries to Argentina and have since announced that they will not resume them once the flight restrictions are lifted.

Emirates

In August, the company confirmed the suspension of its operations in Argentina for an indefinite period and offered a voluntary retirement plan to employees working at Ezeiza International Airport, although it maintains its commercial operations in its Buenos Aires offices.

“Buenos Aires is one of the many cities where Emirates operations remain suspended due to current travel or flight restrictions related to the Covid-19 pandemic. Emirates remains committed to Argentina and we hope to restart our operations in Buenos Aires when it is commercially and operationally feasible. We will make a formal announcement should there be any progress in this regard,” company sources said.

Qatar Airways

Also late last month, Qatar Airways announced the cancellation of its flights to Argentina and became the third international airline to stop flying to the country since the start of the pandemic.

“After a review of operations, Qatar Airways has announced the decision to suspend its services from Doha to Ministro Pistarini International Airport, Buenos Aires, due to the global impact on airlines and the market’s current adverse conditions,” confirmed a company source at the time.

Norwegian

Last year, the European Norwegian low-cost airline also left the Argentine market and sold its domestic operation to JetSmart.

In a complex global context, Norwegian decided to leave the country a few days after Alberto Fernández took over as President of the country. The hike in dollar costs after the 2019 depreciation and the rumors that Kirchnerism would not boost the economic flight model, prompted the decision.

BASF

The company will not completely abandon the Argentine market but plans to move its production of OEM (original equipment manufacturer) automotive paints to São Bernardo do Campo, in Brazil, in the second half of 2021.

However, the German company’s Tortuguitas plant will continue to work with automotive paint, automotive refinishing, and household and personal care chemical industries.

Axalta

A colleague of BASF, the American chemical company announced that it will stop producing automotive paints in Argentina. It has closed its plant and the administrative offices in Escobar, where some 100 people were working.

The plant had been inaugurated just three years ago, in January 2017, with an investment of US$18 million. “Although we sought to exhaust all possible means to preserve our operations in the country, the evolution of the pandemic has proved unsustainable to our business in Argentina,” said the company.

Saint Gobain Sekurit

The French auto parts company Saint Gobain Sekurit has closed its windshield plant and moved its production to Brazil.

The company agreed to the voluntary retirement of its 150 employees and closed its plant in Campana, Buenos Aires. The French company has production  facilities in 19 countries. Its plant in Tortuguitas will continue in operation.

Pierre Fabré

In mid-July, French laboratory Pierre Fabre announced the sale of its active pharmaceutical ingredients plant, located in the province of Buenos Aires, to the Argentine laboratory Sidus.

According to official information, its departure from Argentina was part of a global strategy to increase its industrial presence in France.

Nike

The sportswear company confirmed its departure in February this year.

“Nike announces today that it is making a transition of its business model in Brazil, Argentina, Chile and Uruguay with strategic alliances with distributors, thus allowing the development of a more profitable, capital-efficient, and higher added value business. This move reflects Nike’s continuous focus on optimizing its operating models in countries in its global portfolio, with a clear focus and investment on greater growth opportunities through direct consumer outreach,” said a statement issued by the company.

Nike has transferred its local and other countries’ operations to Mexico’s Axo.

Gerresheimer

The German company, which produced packaging for the pharmaceutical sector, sold its Argentinean operation to the local compny IMAP and left the country.

Source: infobae

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error