the two keys that explain the temporary closure of its four plants

the two keys that explain the temporary closure of its four plants

The temporary interruption in the production of the Acindar steel mill known in the last week does not come alone. From Villa Constitución, the Santa Fe town that lives off the steel mill, to the construction and public works, automotive and even home appliances, the decline is explained by the decline in these sectors. In turn, the closure feeds back into the drop in sales of these items.

Normally, a large company such as the one belonging to the ArcelorMittar groupusually communicates plant shutdowns justifying system maintenance or machinery cleaning needs.

However, the institutional spokesperson, led by Facundo Velasco, this time was clear: the one-month stoppage responds to a 40% drop in demand and did not rule out that the paralysis could extend beyond April. “If the steel is not selling, neither are its customers selling. And if the economy cools so much, this impacts activity and employment.“, warns industry expert, Leandro Mora Alfonsín.

Acindar: the domino fall of construction and public works

Thus, the closure of all four floors from Acindar, which specializes in long steel and profiles for construction, frames and feeds back the negative outlook for the industry linked to the steel industry.

For example, the construction has already shown through the latest data from the Build a Group drop in the sale of materials of 29.2%. The figure has a correlation in the paralysis of public works.

“National public works they are completely stopped. The situation is critical in the sector, the UOCRA has already announced the dismissal of 150 thousand people in this context,” warns Mariano Schor, president of CAMARCO Rosario delegation.

The provincial governments and the private sector are the only actors that support local works, but the reference points out that “without national financing nothing can continue to be executed.”

In the city of Rosario itself you can see the actions of the adjustment. As Schor explains, every route system that is not under maintenance, “will create road chaos”. At the same time, the expansion of Rosario and Santa Fe (city), the restoration of the Flag Monument and the work on the Saladillo waterfall, which foresees the reconditioning of the Molino Blanco bridge, were stopped.

In any case, the construction sector understands that “will bear” the lack of production thanks to the stock of the distribution companies, but the problem would potentially appear after April, if Acindar’s decision is extended. This is not the case of Francisco Paolini, CEO of the Paolini family, who assures that, as long as the stock drops, yes there will be a reduction in the availability of the resource.

The impact of the stoppage around Acindar

Sebastián Pannocchia, president of the Industrial Chamber of the Constitución Department, says that the activities of the homonymous area are closely linked to Acindar’s production, so it will be the first affected. “We came with talks and direct communication with the factory. Suspensions of shifts, vacation settlement or compensatory francs were expected and not a total stoppage”, he admits.

According to the head of the entity, external workshops and outsourced workers who work within the factory will be the first affected, although for now “there was no drop in spare parts purchase contracts”. The shops adjacent to the factory will continue in the chain.

The photograph of the crisis in Villa Constitución shows the following: according to a private survey, the 37.6% finds the situation in his sector much worse. Going forward, the 90.9% of companies do not see the possibility of incorporating workers in the coming months.

Automotive and metallurgy sectors are going through a critical situation

Another sector linked to the steel factory is the automotive sector, which also showed a drop in the production of automobiles. 16.7%, according to ADEFA. “It is completely stopped,” explains Pannocchia, which complements with the first estimates of car sales in dealerships, which are a 28% below. For its part, the patenting of motorcycles suffers the same fate, with a decrease in 19.2%according to ACARA.

The route of the crisis makes a stop at public works and continues to metallurgy. The ADIMRA association, representative of the sector, understands that the closure of Acindar is “complex.” One of the reasons for the stoppage in its production has to do with the fact that metallurgical production itself decreased, in this case a 7.6% year-on-year. “The sector has not fallen by this magnitude, in a single month, since June 2020“, they conclude in the entity.

Thus, the rate of decline that comes from 2023 worsens. According to INDEC, throughout last year a drop of 1.6% at the level of activity; which began to deteriorate in the second half of the cycle.

Source: Ambito

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