The production of agricultural machinery, year-on-year, fell 15.2%, capital goods 20.4%, medical equipment Medical equipment 22.2%, bodies and trailers fell 23.2% and foundries 22.3%, among others.
In the general average, we are experiencing a very strong drop, at levels exiting the pandemic. The utilization of the installed capacity is giving us 42.5%. A brutality.
-However, metallurgy is also linked to strategic sectors that the Government is betting on for economic growth, such as energy, oil, gas and mining.
It’s true. These items are performing relatively well, but some ghosts are beginning to fly: imports and RIGI.
The conditions are in place to import, today there are no restrictions of any kind. An import authorization is requested and in 24-48 hours you have it executed. It is not manifesting numerically yet, because the market is very down. But by this we mean that, under this scheme, any recovery we have will go to imported products.
And the other ghost that is flying is the RIGI, if it is approved in Congress and how. While waiting for definitions, there are many purchase orders that have been stopped. The incentives of buying abroad with RIGI are very tempting.
Has the industry lost competitiveness during these months? In any case, don’t you think that Argentina has been encountering difficulties for a long time in addressing a more virtuous process of international insertion?
The competitiveness problems in Argentina go back a long time and have to do primarily with the technological gap.
For this to be reduced, investments, cutting-edge technology must be produced, training must be provided, and scientific-technological complexes must be built that contain the productive system.
All of this is a program that can only be given if the conditions are long-term, but here they vary constantly. Currently we are going from an absolutely closed economy, like the one we had before, to an absolutely open economy. If we are serious about the race for productivity and competitiveness, Argentina will have nothing to envy of any country.
-The focus you raise is interesting, because when a businessman is asked what should be modified to be more competitive, they prioritize the tax structure and labor costs.
The issue of taxes is important, as is labor reform. But on this point we must speak more clearly. The proposal discussed in Congress includes a voluntary retirement system. In our case, we do not see it as a point of virtuosity. Metallurgy keeps an average worker employed for thirteen years, that is, it is not an industry that is constantly laying off workers. So for us to accept the proposed changes would mean increasing the cost of the product.
-Do you consider that the President’s economic program, despite the current recession, aims to promote investment in the long term?
We at ADIMRA agree that there is an incentive regime for large investments. The problem is that this regime has to include the national industry.
The example of the agricultural machinery and agriculture industry is interesting. Argentina has natural conditions where it has an exceptional humid pampa for the rhythm of crops and so on.
Next to this natural resource, an industry developed that enhanced it. The agricultural machinery industry, exported to more than 100 countries around the world, developed precision agriculture, which exports to the world not only the machine but the way of doing it.
Oil, gas and mining can be Argentina’s development levers in the future, and we want to actively intervene there. 50% of industrial mining purchases are metallurgical. 70% of industrial oil and gas purchases are metallurgical. If we think about the future of our country, we cannot let others do it, nor go overboard with what we offer. Improving conditions compared to what other countries that have the same natural resources offer is enough.
-In that sense, does the Government receive them every time they request a meeting? Have they proposed an industrial program or policies that focus on the development of national business?
The Government welcomes us every time we ask for a meeting. But I’m not sure there is a vertical line of work between the different layers of power within management. The Government is doing a lot of macroeconomics and I think the time has come to deal with the real economy, the economy of all Argentines. We have to start working on that, because organizing the factory is good, but if we don’t make it generate…
-If the factory still does not generate, how does an entrepreneur take the possibility of investing in more machinery, infrastructure, or incorporating more employees?
Difficult. The metallurgical industry is 95% SME with national and absolutely federal capital. Small and medium-sized companies with national capital have no way of migrating elsewhere, we have to stay here, but the margin is becoming increasingly limited.
It is also true that we export to more than 150 countries, but the preponderance in the domestic market is strong. Today we are with both doors half closed: that of local consumption, due to the recession, and that of the foreign market, because it is more expensive.
Faced with this panorama, if conditions do not change from now on, if we do not begin to register a recovery and greater competitiveness, we will be difficult to sustain ourselves.
-Can these complications translate into layoffs?
For now we see a drop in employment since December to this part of 3% or 4%, on a base of 300,000 direct workers, that is, the SME industry is holding on, because there are many towns that live off their factories, where the The owner of the company meets the worker in the warehouse. Furthermore, these workers were trained, there was an investment in human resources, it is not just a number.
However, if this situation continues at these levels, greater layoffs will begin to occur, because reserves begin to run out.
-When an SME closes its blinds, how easy is it to open them again?
It is very difficult to return from the same place. When capital begins to be destroyed, there is part of the fabric that is not recomposed, nor are the intentions of those who seek to invest.
Source: Ambito
