Procter & Gamble, a U.S. consumer giant with sales of $85 billion, continues to review its business in Argentina, after selling its Pilar plant and the Ariel laundry soap and Magistral detergent brands to Argentina's Dreamco last September.
The company, which settled in the country in the early 90s, still has the plant in Villa Mercedes, San Luis, where it produces diapers (Pampers), feminine wipes (Always) and a part of Gillette products. It also has the Pantene and Head & Shoulders shampoo brands and Oral-B in dental care.
"Argentina at the moment is a business of about 400 million dollars. But we have yet to decide what exactly the plan is for Argentina. We've divested on the Fabric & Home Care side of the business and on the rest, we'll still have to see," said Andre Schulten, the company's chief financial officer globally. In that area, they still have the Downy fabric softener.
He made the remarks Tuesday at the Morgan Stanley Global Consumer & Retail Conference. There he gave details about the document that the company filed that same day with the SEC to announce a joint charge of US$ 2,500 million over the next two years in which Argentina was mentioned.
Schulten pointed to Argentina, along with Nigeria, as an example of markets where "it is becoming increasingly difficult to operate and increasingly difficult to create value in U.S. dollars."
"When you think about places like Nigeria, when you think about places like Argentina, it's very difficult for us, as a company that deals with U.S. dollars, to create value. It is also difficult to operate because of the macroeconomic environment," he said in the talk he had at that conference organized by Morgan Stanley and which is uploaded to the Internet.
"So," he added, "with that in mind, we are announcing a very specific restructuring program, with the intention of adjusting the operating model and adjusting the portfolio in some of the markets. The restructuring program will focus heavily on Nigeria and Argentina."
In the African country, the company will stop producing and will only sell, it will dedicate itself to imports.
P&G valued that restructuring program at between $1 billion and $000.1 billion after taxes. In addition, it announced that it will write down a $500 billion adjustment to the value of its Gillette business.
When consulted, the company's subsidiary said that "in Argentina, we have announced the decision to sell the laundry and dishwasher soap business. Beyond this, no other decision has been made." Supermarkets are closely following in the footsteps of the company whose brands occupy a large part of their shelves.