Argentina, one of the world’s leading agricultural producers, wants to integrate its agricultural machinery manufacturing industry into the global value chains with China’s help. Source: Xinhuanet
The Giorgi plant is one such manufacturer. Founded in 1958 by brothers Santos and Quinto Giorgi in the town of Fuentes in the province of Santa Fe, the plant began as a small machine repair shop and grew to become one of the country’s top manufacturers of seeding machines.
During the past two decades, soy cultivation has become a pillar of the economy in central Argentina, with which the agricultural machinery industry grew along, said Osvaldo Giorgi, who seized the trend to grow the family business.
The company today produces some 4000 seeders a year, mostly for national farms, while in the past it had been mainly exporting to neighboring countries, such as Bolivia and Uruguay, and also countries as far away as Ukraine and Russia, said Giorgi.
In recent years however, the US dollar-peso exchange rate, compounded by restrictions on the dollar, made export difficult. But Giorgi said they haven’t lost hope because they can develop their business through possible ventures with Chinese companies.
“It would be interesting to be able to have a complementarity or transfer of knowledge agreement with China that would be mutually useful,” he said.
He cited the cooperation between machine manufacturer Apache’s partnership with Shandong Changlin, a leading Chinese manufacturer of agricultural machinery, as an example of successful complementarity between Argentina and China.
Apache, also based in Santa Fe, has brought its technological know-how to the equation, while Shandong Changlin supplies precision machining at its Chinese plant. Together they offer the Shandong Changlin-Apache line of products.
During the signing ceremony of the agreement in February 2015, Apache’s director Carlos Castellani said: “For us, this is a very important step in our effort to internationalize the company, not just in economic terms, but also in knowledge and information.
“Our know-how, for example, is based on 58 years of being in business.”
Argentina needs to join global value chains, for which China’s help is invaluable, said Jorge Castro, an expert in international policy and head of the Buenos Aires-based Institute of Strategic Planning.
“One key issue for the development of Argentina’s economy in the coming years is to integrate its industrial production into global production chains, as Brazil has already done,” Mr Castro said.
Castro said that in the next few years, Chinese investors would be looking to incorporate their investment here in the production chain of agri-foods designed for the global market.
As major emerging markets, China and Argentina are well positioned to promote bilateral exchanges and cooperation, share development opportunities and work together to tackle common challenges.
China is currently Argentina’s second biggest trade partner. As a traditional producer and exporter of primary agricultural products, the South American country is already helping China bolster its food security, and now hopes to increase its export of high-tech and value-added goods to the Asian giant in a bid to optimize its economic structure.