LATIN AMERICA
BY CHARLES W. THURSTON
LATIN AMERICAN CORRESPONDENT
THURSTONCW@RODPUB.COM
Argentina’s Madersol scales
up on growth
2010 with expected economic expansion of
2.2%, compared with the contraction of 2.3%
which has taken place this year, according to
a consensus forecast by Latin Focus, which
relies on projections by leading banks that
follow the market.
Madersol
looks to
expand
market share
as Argentine
economy
shows signs
of recovery.
Fledglingpaintandcoatingsmanufac- turer Madersol S.A., which already claims to hold six percent of the
Argentine architectural segment, plans to
invest $4 million to quadruple its current
500,000 liters per month capacity. The
investment includes the recent purchase of
a plant that can produce two million liters
per day, according to Mauricio Pugliese,
director of Madersol. The acquired plant is
the third largest in the country.
Sales by the company, operated by brothers Cristián and Mauricio Pugliese are projected to hit $22 million this year, buoyed by
the recovering Argentine economy. Exports
to Uruguay added to sales this year, and initial exports to Chile and Peru are expected
to begin next year. The company hopes that
exports can grow to reach 50% of all sales,
which will offer protection against foreign
exchange pressures, according to Pugliese.
Among leading brands that Madersol
markets are: Polacrin, a premium architectural line; Acurel, a professional architectural line; Maderin, a wood finishes line;
and Sintecrin for acrylic and other synthetic formulations. The company also markets
adhesives and paint-related chemicals.
Madersol hopes to move up from its rank
as eighth largest in the architectural segment to compete with the largest players in
the market over the next five years,
Pugliese said.
Madersol relies heavily on advertising
within entertainment venues, including soccer games and car racing. Maderin is one of
the many lines carried by El Ferretero, the
hardware retailer. Madersol also markets
its products through direct Internet sales.
Growth opportunities in the Argentine
paint and coatings market should rise in
“Madersol hopes to move up from
its rank as eighth largest in the
architectural segment to compete
with the largest player in the market
over the next five years.”
One of the greatest limits to real growth in
Argentina remains inflation, however, and
the consensus for 2010 is an increase to 8.4%
inflation from 6.6% this year. Pricing of products, costs of imported raw materials and foreign exchange variations with export markets
will provide a challenge to Madersol. The dol-lar-peso exchange rate has moved to 4.0 pesos
to one dollar from 4.2 pesos this year, according to Orland J. Ferreres & Associates.
While the Brazilian real has slid in value
against the Argentine peso, the two countries are engaging in a foreign trade tiff.
Argentina has restricted imports overall,
and Argentine trucks have been blocked at
the Brazilian border recently.
A restructuring of sovereign debt by the
Argentine government now underway could
help loosen the credit market for industrial
borrowers in the country. The 2001 default
by the Argentine government on $95 billion
in bonds has frozen the country’s ability to
borrow abroad, in turn, limiting the potential for domestic lending. CW
