BUENOS AIRES (Reuters) - Argentina will take over bankrupt soy-crushing giant Vicentin, with the aim of saving jobs and protecting the country’s food exporting sector, President Alberto Fernandez said in a televised address on Monday.
Argentina is the world’s No. 1 exporter of soymeal livestock feed and Vicentin is one of the country’s main producers. Vicentin, founded in 1929, was Argentina’s top exporter of processed soy and an iconic brand in the domestic food market.
“Today we are signing a decree that provides for the intervention of Vicentin,” Fernandez said.
“We are sending Congress an expropriation bill so that the government takes over,” he added.
Vicentin has a joint venture with Glencore Plc called Renova, which has a major crushing plant in Argentina’s Santa Fe province. Renova has remained operational since Vicentin defaulted on its bank loans and suppliers around the turn of the year.
Fernandez said he did not consult Glencore before deciding to intervene in Vicentin. He called the move a “strategic decision for the national economy.”
Argentina exported $12.2 billion in soyoil and soymeal last year. Soy-based livestock feed manufactured along the banks of the Parana River, Argentina’s grains superhighway, is used to fatten hogs and cattle from Europe to Southeast Asia, while soyoil is used in cooking and to make biofuels.
“I want to give peace of mind to all the workers of the company, who will continue in their jobs. And also to the 2,600 farmers who will be able to count on the company to buy their grains for processing and export,” Fernandez added.
Argentina is facing a grim economic picture after defaulting on its own sovereign bonds last month.
Gross domestic product is seen shrinking 9.5% in 2020, according to a recent poll of analysts by the central bank. Activity has gotten walloped by a nationwide lockdown that started March 20 against the coronavirus pandemic.
Reporting by Hugh Bronstein and Maximilian Heath; Editing by Dan Grebler and Peter Cooney