Spain is the second largest foreign investor in Argentina with more than 300 Spanish companies installed mainly in the financial, telecommunications, metallurgical and automotive sectors, which makes our country one of the main trading partners.
The investment stock accumulated by Spain is currently over 5,800 million euros, a figure only surpassed by US investments in the country. Spanish investment in Argentina, yes, is not experiencing its best moment. The investment record occurred almost a decade ago, in 2010, when the figure exceeded 9,150 million euros. Since then, especially after the legal insecurity generated in the last years of the government of Cristina Fernández de Kirchner.
The turning point occurred in 2012, with orders ordered by Kirchner, which dealt a severe blow to relations between the two States in a crisis that lasted for almost two years. This same year, in March, King Felipe VI visited Buenos Aires in an attempt to relaunch relations between the two countries after a previous state trip by Argentine President Mauricio Macri to Spain, which was promoted during the G-20 meetings. .
The President of the Spanish Government, Pedro Sánchez, and the Argentine President analyzed at the Summit held in Buenos Aires at the end of 2018 the investment opportunities that Argentine infrastructure had for Spanish companies.
Change with Macri
Macri wanted to show signs of change in the country and even improved the existing conditions in some cases, as in the case of Naturgy, with which it reached an agreement along with the other eight distributors in the country, to set an exchange rate of 1, 38 dollars. Argentina corrected the tariff period that ran from spring 2018 to spring 2019 and plans to start rolling back the debt incurred in October 2019. In fact, the president of the Spanish company even made a recent visit to the country.
Argentina has forced distributors to make it clear by contract that they will not be able to pass on to users the cost of the devaluation of the Argentine peso. Companies will have to seek financial coverage to cover this type of risk.
Argentina also has a significant presence of the two large Spanish financial institutions: Banco Santander and BBVA, which has just unified its name, as well as Codere or Seresco. Mapfre, Inditex, ACS, Acciona, Indra, Prosegur and Elecnor also have a presence in the country, as well as Dia, with more than 900 stores.
Telefónica, in fact, seriously considered last year placing a part of its company in Argentina on the stock market to reduce its exposure to the country, but finally the valuations it obtained as well as the situation in the country itself left the operation deadlocked. Argentina represented 4.7% of Telefónica’s revenues last year and 4.2% of the operator’s ebitda.
Currently, according to Icex, Telefónica has the largest Spanish investment in the country, with a project of 2,200 million euros, followed by Banco Santander, with a project of 1,800 million, and Gas Natural, with 400 million.
Dia, one of the most exposed
The Spanish supermarket chain Dia, now controlled by the Russian tycoon Mikjail Fridman, is one of the companies most exposed to the economic ups and downs of the third largest economy in Latin America, after Brazil and Mexico. Dia arrived in Argentina 21 years ago, in 1998 with a supermarket in Buenos Aires, and currently has more than 930 stores open, with a market share of 14.1%.
The Spanish company had sales of 1,747 million euros last year in the South American country, almost 17% of the company’s total worldwide sales, which last year reached the figure of 10,334 million euros. Dia currently has stores open in Buenos Aires, Salta, Santa Fe, Corrientes, Córdoba and Entre Ríos.
Telefónica, Santander, BBVA, Gas Natural, Mapfre and Prosegur are the other large Spanish multinationals with a strong presence in Argentina. The Spanish operator entered 3,495 million in 2017, 27.8% of its total business in Latin America. BBVA, for its part, controls Banco Francés in the country, of which it owns 66%. The Santander Group owns the subsidiary Santander Río, the leading private bank in the country by volume of loans and deposits, with 3.6 million customers, nearly 480 branches and more than 9,000 employees.
Facebook Comments
Disqus