The facility was inaugurated in the presence of Firmenich CEO Gilbert Ghostine and other senior company executives, yesterday, and serves as plans to extend the company’s global reach, particularly in the Latin America market.
The company says the new facility will serve more than 100 customers across ten markets globally, while also increasing the company’s footprint in Argentina.
Long-term investment in Argentina
Firmenich is one of the biggest ingredients players in the world, and has been aiming to build its presence in the Latin America to tap into significant growth potential.
“We have been in Argentina since 1956 and our multi-million dollar investment in this cutting-edge plant, underpins Firmenich’s long-term commitment to our customers in the region to deliver the most innovative, consumer-focused fragrance and flavor solutions in the market,” said Gilbert Ghostine, CEO Firmenich.
Indeed, the opening of the facility coincided with U.S. President Obama’s official state visit to the country, yesterday, which was designed to establish stronger ties with the newly formed right-wing government.
New Argentine government promises liberal trade
The election of the new government has beckoned in some big changes that are expected to benefit both the Argentine economy and international trade in a number of areas, including fast moving consumer goods.
The new government, headed up by President Mauricio Macri, began to rebuild the country’s economy with the tough measure of devaluing the country’s peso currency by approximately 37%, a move that is likely to hurt many international businesses initially.
But after two months in power, the government is also ushering in revised trading conditions that should help liberalize the economy and facilitate a higher level of business in the longer term.
A more positive consumer and business sentiment
P&G CFO Bob Shanks estimates that the company has taken a $300m hit from currency devaluations worldwide in January and December that were mainly attributable to Argentina, the fact that the company has upped its investment stakes in the country for 2016 – 2017 reflects the growing optimism.
Just yesterday the company confirmed that it was investing a further $50m to expand production of a number of leading cosmetic and personal care products that it markets in the country.
Indeed, the United States Chamber of Commerce in Argentina has stated that US business could rise by as much as $18bn in the course of the next few years – a three-fold increase on the current annual level of $4 – 7 bn.