The expropriation of YPF, no concern to Catalan businessmen in Argentina

Barcelona (ACN). – “The lack of legal certainty in Argentina is not new, it started many years ago, so the firms that do business there remain unconcerned about the expropriation of YPF because they have learnt to coexist with constant changes in the legislation of the country”. In such terms José Manuel Aguirre, Sales Director at the Catalan company Aplicacions d’Intel·ligència Artificial (AIS) expresses his opinion about the economic situation in the Latin American country. Other Catalan companies located in Argentina consulted by CNA, such as Gas Natural, Codorniu, Abertis and Miquel y Costas, show similar lack of concern about the nationalisation. Sixty Catalan companies are established there while a further 2,438 businesses export there.

Since 2006, Catalan companies have made a profitable investment of €447 million in Argentina, without including the participations in foreign securities and bonds. According to data from the Spanish Institute for Foreign Trade (ICEX, in its abbreviation in Spanish), in 2011 Catalonia exported to Argentina goods for a value of €260 million and imported a sum of €467 million.

The announcement of the expropriation of YPF was a relative surprise, inasmuch as investors in South America are used to constant changes in regulations. “Personally, I think that this trend of nationalising can go on, it is like a tango, like a pendulum. In the 1990s everything was privatized, in the 2000s everything was nationalised...like what already happened with Aerolíneas Argentinas”, considers José Manuel Aguirre, who is back in Barcelona, in the central HQ of AIS, after living for four decades in the Andean country.

AIS have been working in Argentina for 12 years, developing software for financial institutions in the Latin American country for 12 years. Before the ‘corralito’, business in that country made up between 20% and 30% of the overall turnover of the Catalan company, but nowadays it is down to 10%. “Expropriation does not affect nor worry our company”, adds Aguirre. What really affects them, he stresses, is the closing of the foreign exchange market in the state governed by Cristina Fernández de Kirchner, which complicates the movement of funds.

The cava business

One of the 10 wineries that Codorniu has around the world is in the Argentinean province of Mendoza. In this sense, sources within the company express that they are not worried due to the length of time they have been established in the country. Freixenet also has business in the same region.

Highways and catering

Abertis, company that manages infrastructures for mobility and telecommunications and bills €4 billion every year, has a “limited exposure” in the country, since it is only present in two highway concessionaries: it owns 35% of Ausol and 48% of GCO. In the past, Abertis was affected by the tariff freeze, but now the situation has entered a phase of normalisation. In any case, “there is no concern” for a possible nationalisation of the Argentinean highways and, anyway, “the impact would be small” in the overall business of the company.

The service firm Areas –which prefers to make no statements about the expropriation– has been in Argentina since 1999 and has a turnover of €9.4m in the Andean state. With 18 establishments in the country, it employs 260 people and offers catering trade services to airports and shopping malls in the capital.

Cigarette paper, washing machines and casinos

The Miquel y Costas paper manufacturing company has been working in Argentina for 35 years. During that time the firm has already gone through many crises, which make them take a calmer attitude despite the Argentinean government’s decision about YPF’s property. The material they produce is mainly destined to exportation. The group Girbay also has a subsidiary in Buenos Aires and is dedicated to the provision of laundry equipment. 

In the gambling sector, the group Cirsa, which declines to make any statement about YPF’s nationalisation, has two casinos in ships in the Río de la Plata, a bingo hall in Buenos Aires and also owns the biggest casino in Latin America, located in Rosario.

Gas Natural Fenosa and Agbar

Meanwhile, Gas Natural Fenosa is also showing a calm exterior with regards to the threat of expropriation and is confident that the Spanish Government will give a sensible answer to defend Repsol, according to the president of Gas Natural Fenosa, Salvador Gabarró in a recent press conference. The company is in Argentina since 1992 through the firm Gas Natural (BAN) (whose 50.4% stockholding is held by Gas Natural Fenosa), which executes the distribution of natural gas in 30 municipalities in the north and west areas of the province of Buenos Aires. The gross revenues in 2011 in the South American country were €27 million.

Even though many get used to legal obstacles, others abandon the ship. Agbar, a company dedicated to water and environmental management, renounced its water supply concession in Buenos Aires and other two provinces 6 years ago after the disagreement with government, then lead by Néstor Kirchner, the late husband of Cristina Fernández de Kirschner.