The perfect storm in agriculture: layoffs, closures and millionaire debts

One of the most notorious cases is that of Granja Tres Arroyos, the largest chicken producer in the country. The company requested a Crisis Preventive Procedure (PPC) with the intention of dismissing hundreds of employees or, failing that, reducing wages by 21%. This decision is directly related to the loss of the Chinese market due to the avian flu in 2023, which affected its income. To this are added the tax pressure and the uncompeitive exchange rate, which have increased the operational costs and decreased their profitability.

The truth is that the fall of purchasing power in the domestic market also had a lot to do and this same factor is complicating the operation of other large agri -food firms. For example, Recently the Nestlé dairy announced that it will suspend production during the month of March, temporarily, in one of its industrial plants located in the province of Córdoba. The firm explained that the decision responds to the need to readjust stocks, something logical in the face of the fall in sales that affects the entire dairy sector, fundamentally to those firms that have their business focus on the commercialization of products with greater added value .

But the crisis is not limited to these companies. Sancor, Los Gobo, Agrofina and Surcosall companies in the sector, requested the opening of creditors competitions due to their delicate financial situation. Together, they accumulate debts that exceed US $ 700 million.

The reality is that Sancor, the iconic dairy cooperative, has dragged financial problems for years and currently faces a debt of US $ 400 million. Despite multiple restructuring attempts, including the sale of assets and reduction of personnel, the company has failed to stabilize. In recent months, he had to fire 300 workers and drastically reduce their operation.

In the case of the Grobo and Agrofina, the indebtedness exceeds US $200 million. Affected by drought, exchange delay and financing problems, both companies They entered into cessation of payments and requested the preventive contest to avoid total collapse. The meanwhile both signatures continue to accumulate rejected checks, according to the records of the BCRA, currently total $ 7.2 billion.

The situation of grooves is very similar. The Santa Fe company specialized in the production and commercialization of phytosanitary, It also faces serious financial problems with a debt close to US $ 100 million. Within this framework, he not only requested the opening of the creditors contest but also requested before the Secretary of Labor a preventive crisis procedure (PPC) that aims to reduce its labor campus, but with a remove in the corresponding compensation. So far, he already disconnected more than 50 workers and the cut is expected to continue advancing.

In the rigor of truth, the crisis affects both small, medium and giant companies. Cargillone of the largest marketers of agricultural products globally, announced a 5% reduction of its world staff, equivalent to about 8,000 layoffs. In Argentina, the company cut 600 jobs in its local plants. This measure responds to the 10% drop in its global income due to the decrease in international prices of agricultural commodities, which forced the company to adjust its costs.

Now, What is really happening in the Argentine Agro? The situation is the result of a combination of factors that have been hitting the sector for a long time. On the one hand, The macroeconomic context is adverse: interest rates are high, financing restrictions complicate access to credit and profitability of the sector fell strong in the last year. In parallel, Many companies made management mistakes, betting on expansion plans that could not sustain in a changing market.

To this are added external factors such as drought and volatility of international prices. Agricultural production depends largely on climatic conditions and, when they do not accompany, the effects are felt throughout the productive chain. Globally, the low commodities prices reduced the gain margins of exporting companies, forcing them to restructure to survive.

The consequences of this crisis are not minor. Many of these companies have their plants in locations where they are the main economic engine, so their financial problems fully impact regional economies. In this context, according to the sector, it is expected that many other companies progress with restructuring plans. The year just begins.