Beyond the economic crisis, high inflation, stocks and the lack of dollars, Luis Pagani, CEO and president of Arcor, observes two realities. “What worries him most is that Argentina has split in two,” he says, but clarifies that he is not referring to the rift that politics is going through. “There is a country that consumes and another country that doesn’t make ends meet”explained the entrepreneur in a long exclusive interview with clarion.
Arcor is the largest food company in Argentina and the group with the largest number of open markets in the world. The company is in 2nd place in the Merco ranking for the 3rd consecutive year, after driving it in the first 10 editions. The group has 45 industrial plants, 20,000 employees and in June this year opened a candy and biscuit factory in Angola, Africa, to serve a market of 400 million consumers.
Despite this, Pagani reiterates the urgency of reaching consensus. “There are 30,000 Argentines in Qatar to see the World Cup and there is the reality of social movements. Ultimately, this is everyone’s responsibility and one day we will have to agree on 3 or 4 key points to get out of it, without political factions in the way,” he says.
Do you think it is possible to reach an agreement right now?
-I think it is the responsibility of the entire leadership, including business people, to reach a consensus. Business thrives in a country that thrives. Hopefully it will be achieved even if I see it difficult now because there are elections next year. But it is hoped that an understanding will be reached in the short term. What worries most is education, which has been in decline for 20 years. This is a business problem, because education has to do with skilled work. I lived in a country with public education. That country existed.
– Can inflationary escalation be stopped with the recipe for freezing prices? Can it work this time?
-As regards programs or tariff plans, Arcor has always participated and collaborated. Personally I am a supporter of the free market, I believe that competition is a stimulus for creativity. But like Arcor, we are aligned with government policies and the company plays by the rules of the game.
-This year we finished with 100% inflation and a similar or higher rate is expected for next year. What are your projections?
-It is not necessary to talk about 100%. By the time inflation reaches double digits it is already out of control. There have been several complicating factors, such as the war in Ukraine and there have been spikes in inflation in many countries. The interesting thing is that there is a new geopolitical order and now Latin America is more important. Because of the resources the region has and because there are many corporate decisions that seek to reallocate investment. This is why Mercosur regains importance. I am confident that now with Lula we will once again have a strong and powerful market that has attractions to attract investment.
-Many believe that Mercosur has not given results and that it does not work. Apparently he thinks otherwise.
-As an Argentinian I see Mercosur as very active, even if Brazil has taken advantage of us. For industrial exports, the Brazilian market is the main destination because it is very close. If there’s a market to win, it’s Brazil. I am a defender of Mercosur, and now that there is so much talk about dollarization, I think it is better and more advantageous to create a common currency with Brazil, or a Mercosur currency.
According to the latest financial statements, Arcor had a turnover of 2.9 billion dollars in 2021. It is the world’s leading producer of hard candies, has 7 industrial farms (where 50,000 liters of milk are produced per day) and is the largest producer of packaging paper and corrugated cardboard. It also has sales offices in Uruguay, Paraguay, Bolivia, Ecuador, Mexico, the United States, Spain and China.
-How will consumption close in 2022 and what do you expect for next year?
-It’s up between 2.5 and 3% by volume so far this year. Economists expect a contraction for the first half of 2023, but it hasn’t happened yet. But there are also two realities here. What you always see is the consumption in the AMBA area, which seems to be the most affected, but something different is happening inside the country and it is growing more than in the metropolitan area, there is also another mood .