Arcor preparing European assault

Related tags South america Latin america

Arcor, one of the success stories of South American business, has
grown rapidly from its roots as a family-run confectioner and now
has major operations throughout the Americas. But the opening of a
new international HQ in Barcelona is the prelude to the launch of
its products in five or six European markets next year.

Arcor, the Argentine confectionery group, has set up a new international base in the northern Spanish city of Barcelona, from where it will co-ordinate exports throughout the world, beginning with six key European markets in 2003, reports the newspaper Expansion​.

The South American company has set itself ambitious export targets, and within the next five years is hoping to push export sales to the same level as those registered in its traditional markets of Argentina, Chile, Brazil, Peru and other neighbouring countries. It also has a strong base in the US.

It is four years since the company first began selling its confectionery products outside the Americas, and Arcor clearly believes that this can be better managed from Barcelona than from Buenos Aires. But the new European HQ will not only focus on European markets - it will manage all of Arcor's non-South American export business - Central America and the Caribbean, North America, Asia, Africa and the Middle East.

Arcor's export sales are currently valued at around $220 million (€217.7m), or 20 pc of total turnover. The aim is to lift this to around 50 per cent over the next five years.

The company makes a wide range of products, from caramels and chocolate to biscuits and canned foods, and has been highly successful at expanding its business from a small family-run company in Argentina to one of the biggest companies in South America.

One of the key factors in expanding its business outside South America is the fluctuating economies in these markets, which will take their toll on Arcor's results this year. Sales in 2001 reached just over $1 billion, but the currency crisis in Argentina will shave at least 20 per cent off this figure this year.

But expanding to Europe will not be easy, not least because of the high duties imposed on Argentine goods by the EU - around 35 per cent at present. "The best help the international community can give Argentina is to let us export,"​ Arcor's international director Alejandro Siniawski told the paper

Once it does become established in Europe, however, Arcor will be able to bring many years of experience to bear. It already has extensive knowledge of producing in foreign markets, with facilities in Chile, Brasil and Peru, and also controls a number of milk and sugar processors and packaging producers.

Gustavo D'Alessandro, Arcor's European director, is cited in the paper as saying that the company will target five or six key markets there from the start of 2003, presumably including Spain, where it currently has no market presence. There was no indication as to which other markets would be targeted, but he did confirm that the focus would be on confectionery products rather than biscuits or canned food.

Related topics Processing & packaging

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