This was revealed by a survey by the Argentine Industrial Union (UIA). more than 80% of companies have import problems. According to the survey, this creates difficulties in obtaining financing and complicates production.
Last October, the Integral Import Monitoring System (SIMI) was replaced by another mechanism called the Import System of the Argentine Republic (SIRA). over 80% of companies indicated that application approval times with the new system are longer than with the previous system“, underlines the industrial survey that was published this Friday.
For 4 out of 10 companies, imported inputs account for between 25% and 50% of their costs. “All imports have difficulties, however, inputs are the ones that suffer the most,” they point out.
Added to this is that the increase in payment terms “has exacerbated problems in obtaining finance for imports from companies”. According to the survey, almost 90% of companies declared that they had difficulty in obtaining financing needed to import inputs according to the flow of operations.
The consequence is that seven out of ten companies have declared that the difficulties in the supply of inputs could generate stops in some production lines. “The non-approval of the applications and the delay in the deadlines were the reasons most cited by the companies as risks of partial shutdowns of the plants”, reads the industrial report.
31% of companies indicated it 60-day payment terms are the most frequently approved. Terms of up to 90 days accumulate for 78% in micro enterprises and 65% in small ones, while 22.6% of companies indicate that payment terms of 180 days are the most frequent. 32.1% of medium-sized companies and 68.4% of large ones have to pay every six months.
Faced with this situation, “the UIA continues to deal with the competent national authorities the cases of SIRA complaints observed by industrial companies whose production is affected by the delay in the approval of import permits and is working to resolve it”.
brake on growth
In the first ten months of 2022 the industry recorded 7.8% year-on-year growth, which made it possible to resume the production levels of 2015.
However, the report states that “in the third quarter, we started to see a slowdown in growth, by local and external factors. This list identifies the international rise in energy prices, the acceleration of inflation levels and tensions in the foreign exchange market, with a smaller surplus of the trade balance of goods and its impact on the reserves of the Central Bank “This has triggered greater restrictions on imports of key manufacturing inputs”.
The survey found that the percentage of farms with production increases dropped for the third time in a row and reached only 21.5% of farms in October, down from 41.8% a year ago. While, an increase in the percentage of farms with production losses is observed: 30.2% of them indicated that their production decreased in October compared to the third quarter average.
In the case of exports, the drop in the percentage of companies that reduced their sales abroad is more marked (37.7% in October vs. 26.3% in July).
The percentage of companies with positive expectations about their economic situation thus fell to 28.2% (from 33.5% in the July survey). The same can be observed in the expectations of companies on the situation of their sector: only 24.3% foresee an improvement. Moreover, lower expectations for the country’s economic situation have also been observed since then only 14.1% of companies expect an improvement.
The fourth CEU-UIA survey was conducted in November and December and was answered by 486 companies, 92% of which SMEswith broad regional and sectoral participation.
AQ
Source: Clarin
