In less than 20 years, the number of companies selling abroad fell by 60%

So far in 2024, Argentine exports have been growing at a rate of 15% per year, But despite this leap, the sector’s performance in the country remains poor.

The succession of export restrictions, the increase in the tax burden and the lack of financing are some of the factors that combine to reduce the number of exporting companies. This is shown in the latest report from the PyMEx Observatory. The document shows that Argentina went from having 15,075 exporting companies in 2006 to 8,798 in 2023, the lowest figure since 1994.

The number of manufacturing exporting companies rose from 9,176 in 2014 to 7,172 in 2023, also the lowest value since at least 1994 and far from the peak of 2006. Of the 7,172 manufacturing companies registered in 2023, 654 were Large, 3,707 SMEs and 2,811 Micro.

The report reflects that The size of the exporter is decisive when defining the scope of its exports. The average distance of exports by large firms (8,879 kilometers in 2023) is greater than that of SMEs (6,202 km). Even within this segment, medium-sized firms (6,579 km) send their products over greater distances than small firms (4,928 km). In 2023, the main destinations for SMEs exports were MERCOSUR (33% of the total), Chile (12%), the EU and the USA (both 11% of the total).

In order for exports to grow and more companies to join this business, the Chamber proposes that It is key to reduce tax pressure. “CERA is currently promoting, as a priority, the elimination of export duties on industrial goods, the regularization of VAT refunds and freight payments in Argentina, and the management of waterways and ports,” said Fernando Landa, president of the entity.

Another problem that Argentine exports present is that 62% of foreign sales are concentrated in primary products and Manufactures of Agricultural Origin (MOA), areas in which SMEs have less weight.

“Exports continue to have a high incidence of primary and derivative agricultural products, with Brazil and China as the main destinations, and some participation of specific industrial products (steel, aluminum, automotive). The recovery of the agricultural sector after the drought that affected the sector in 2023 generated a greater volume of production and consequently of sales abroad,” says the consultancy Qualy.

Added to this is the fact that the importance of fuel and energy exports is increasing. “Although it maintains a constant share of around 12% in exports,foreign sales in this area are the second that grew the most in the cumulative period up to August 2024compared to the same period in 2023: 26%,” the consultancy firm notes.

The destinations to which Argentina exports are also concentrated. In fact, Eight countries account for 50% of Argentine product sales: Brazil, China, United States, Chile, India, Vietnam, Peru and Switzerland.

Marcelo Elizondo, a specialist in foreign trade issues, points out that Argentina’s insertion in the world is small and that is a problem. “In 2024 we will be one of the 3 countries with the lowest import/GDP ratio (13.3%). Even considering the “delayed” exchange rate or recession, we are very closed. In Latin America the ratio is 25% and in the world 28.5%.”

“If we consider total foreign trade (exports plus imports, of goods plus services) in relation to GDP, our ratio in 2024 will be around half of the world ratio and the lowest in our region. Argentina must export and import more.”

“Argentina came second to last in the International Institute for Management Development’s 2023 World Competitiveness Ranking, which measured inflation, fiscal policy, public finances, the institutional framework, and company finances. There is no competitiveness without competition,” Elizondo concludes.