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The largest dairy in the world has sold its plant in Argentina and fled the country

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Even if he came to the countryside “by chance” in 2015 for buying a company in Mexico that had assets in South America, after 7 years of operation, the dairy giant Lactalis has decided to close everything in Argentina and bet for now on Brazil.

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The France-based company, which owns the brands Parmalat and Presidentamong others, he had kept the La Mucca Dairylocated in the city of Díaz, in Santa Fe.

That business was shrinking and finally at the end of last year Lactalis sold the plant where around 85 people worked to “a rosary group”, whose name near the sales signature I prefer not to reveal and it didn’t transcend even in the sector, even if it would not be related to the dairy industry.

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In addition to the production activities, Lactalis had offices in Buenos Aires from which it managed the other branch of the business – the import of its French flagship products – which it will also close at the end of March “indefinitely”.

After selling the Santa Fe plant, the French group had tried to keep the business with export agreements with third parties which would allow them to obtain dollars to be able to import, amid official restrictions.

Lactalis was born in 1933 and is dedicated to cheeses and fresh dairy products.

Lactalis was born in 1933 and is dedicated to cheeses and fresh dairy products.

However, this project which was launched between October and February it did not thrive and, finally, the game was decided. The company he didn’t even want to leave a distributor in the country sell their products, as has happened with companies that decide to stop having a direct presence in a market, such as Nike or Edding.

Its decision may have been driven by the small presence it had in Argentina compared to its business in Brazil, for example, where after the purchase of DPA, a joint venture between Nestlé and Fonterra, became the number one dairy at the end of 2022 from the neighboring country, where it already operated, with nearly 11,000 employees.

In Brazil it has 23 of its 266 factories, distributed in 51 countries. In UruguayWhile, I’m in third place in the dairy sector.

According to industry experts, Lactalis was small in Argentina for what the company was in the world and had a long history of looking for alternatives to grow.

Ranking of the largest producers of dairy products worldwide, according to Rabobank.

Ranking of the largest producers of dairy products worldwide, according to Rabobank.

One of the options, for example, was his attempt to stay at SanCor: in 2005 he was among those interested in the functioning of the cooperative who were looking for a partner to get out of the financial crisis. It seemed that Adecoagro was winning the battle until Néstor Kirchner closed a deal to export powdered milk with Venezuela in exchange for financing, which ended up sinking the local dairy company.

“I don’t know if because of that small business or because he got tired of trying in a highly hostile economic scenario. The fact that there are export rights, foreign exchange delays for foreign companies and controlled prices -Fair or Careful- in the market internal means that no company that does not have solid foundations, such as Nestlé, Saputo (Molfino/La Paulina) or Savencia (Milkaut/Santa Rosa), I estimate they will look at the 2024 scenario to see what happens, but the current scenario is very adverse” a company insider explained.

Long list of multinationals in retreat

The exit of Lactalis, a group with a turnover of 20,000 million euros and 85,000 employees, joins a long list of multinationals that they stopped having Argentina on their direct investment radar. The particularity of the internal crisis has been added to the shock that the pandemic has represented for the finances of all companies.

Other large companies that have left the country have been Walmart, which has sold its assets to the De Narváez group, or the Italian Enel, which has already decommissioned the Costanera and Dock Sud power plants and is looking for a buyer for Edesur.

There were companies that directly closed their businesses such as Chilean Falabella and airlines LAN and Norwegian in the domestic air market. And a third group that has left its brands in the hands of third parties (Nike, Asics, Edding, Shell).

Source: Clarin

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