The national agricultural inputs company faces criminal complaints for alleged deception of investors and is going through a delicate financial crisis.
After the criminal complaint filed by the National Securities Commission (CNV) for alleged deception of investors, Grooves, one of the main national companies dedicated to the commercialization of agricultural inputs, is going through a serious financial crisis. The company reported that it will exercise its right to defense and confirmed that precautionary measures were decreed, such as the general inhibition of assets and an embargo that exceeds US$5.5 million, in addition to an additional sum to cover interest of US$2 million.
The current situation of Surcos was triggered after the failure to make payments on stock market notes and a marked drop in sales, in line with the general contraction of the phytosanitary market. ANDLast November, the firm attempted to renegotiate its financial commitments, but only reached agreements for 30% of the outstanding amounts. The situation worsened in December, when it announced that it would not be able to meet its remaining commitments.
In a statement, Sebastián Calvo, president of Surcos, assured that the company is working on a comprehensive restructuring proposal to preserve its stability. However, the picture is complicated by the complaint from the CNV, which indicates that the firm would have issued Negotiable Obligations without adequately reporting its financial situation.
The phytosanitary market in Argentina, valued at approximately US$3 billion, experienced a significant contraction, affecting all companies in the sector. Surcos, with a market share close to 4.5%, reported in its last fiscal year that its sales had fallen by 32%.
Additionally, 90% of the raw materials used by the company come from China, making it vulnerable to international trade fluctuations. This dependence, added to the drop in domestic demand, has exacerbated its financial problems.
a little history
Founded in 1974 under the name Ciagro, the company began as a small veterinary supplies business in the north of Santa Fe.. Over time, it expanded its reach to the agrochemical and phytosanitary products market, consolidating itself as a leading player in the sector.
In 2008, after a split of the original firm, Red Surcos was born with a renewed focus on its own production of phytosanitary products. Currently, the company has two production plants: one in Florencio Varela, Buenos Aires, specialized in high-tech and low-volume solutions, and another in Recreo, Santa Fe, intended for higher volume products.
With a network of 14 warehouses and 10 distribution centers in strategic points of the country, the company also exports to markets in the region, such as Uruguay, Paraguay, Bolivia and Colombia. Its portfolio includes more than 100 products, standing out in the formulation of herbicides, which represent 70% of its sales.
Source: Ambito
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