Korea’s Hyundai reached an agreement with the Argentine government by which it will compensate its 91 million US dollars surplus on sales to the local domestic market by promoting exports of peanuts, wine, bio-diesel and soy flour to the tune of 157 million US dollars.
Argentina’s Ministry of Industry reported that the Korean company will make also make a capital investment of 8 million USD that together with the trade deal will enable the company operating in Argentina to have a 55 million USD surplus between imports and exports by the end of 2012.
The agreement was subscribed by representatives from Sojitz Corporation, the main partner of Hyundai Argentina with 34% of shares, with Ministers of Industry and Economy, Debora Giorgi and Amado Boudou plus Domestic Trade secretary Guillermo Moreno.
This way ten major car manufacturers operating in the Argentine market have committed to turn a deficit into a surplus. The corporations are Ford, Chery (China), General Motors, Volkswagen, Mercedes Benz, Porsche, Fiat, PSA Peugeot Citröen and Alfa Romeo.
Allegedly Sojitz will be exporting soy flour to Vietnam where it won a bid to become a food supplier to the Far East country.
Regarding bio-diesel, the 8 million USD from Hyundai will enable the Korean subsidiary in Argentina to export 100 million USD in two years time. The promised export bill for peanuts is 5 million USD and 2 million USD for wines.
In the communiqué the Ministry of Industry states that based “on commitments agreed with local auto corporations we have guaranteed the trade surplus in that sector will reach 4 billion USD by 2012. This compares with the sector’s deficit of 6 billion US dollars in 2010”.
To overall contain imports and expand exports, Argentina is implementing a policy, sector by sector, demanding corporations operating in the Argentine market, such is the case with the auto industry and importers, to promote surpluses by selling overseas more than what the introduce to the local market.
One company that still has to reach an agreement, and which has seen sales soar in Argentina, is Germany’s BMW.