Argentinian pet food giants looking for new markets

Amid an economic slump at home, Argentinian pet food companies may find increased business by exporting to high-growth pet food markets like China.

Grupo Pilar Pet Food

In early 2019, one of the leading pet food companies in Argentina, Grupo Pilar, filed for a preventive arrangement with its creditors. The company was facing financial difficulties due to the economic environment prevailing in Argentina, with interest rates and the peso hiking and a deep recession hindering businesses.

Despite the solvency problems of Grupo Pilar to pay back to creditors, the company continued operating as usual. It even launched new product lines, in a market with good prospects amid the adverse economic environment.

Good news from Chinese pet food market

In other information, the company received more positive news this year. The Chinese government issued a statement welcoming new imports from Argentinian pet food manufacturers. The local companies that China benefited included two production facilities of Grupo Pilar, another plant belonging to Agroindustrias Baires and a facility of Petfoods Saladillo.

According to press sources, China imported 16,800 tons of pet food in 2017, meaning a 70% increase compared to the previous year. Moreover, it is expected that the Asian market overall is increasing pet food imports rapidly in 2019 and beyond.

Accordingly, Grupo Pilar announced the delivery of 34 containers to China of their premium pet food brand, Top Nutrition, under the new agreement.

Exports may be way to overcome economic slump

In 2017, Argentina exported 112,247 metric tons of pet food, according to the National Statistics and Census Institute (INDEC). The top export countries were Chile (67,458 tons), Uruguay (12,199), Bolivia (10,679) and Paraguay, among others.

In 2018, Argentinian pet food exports dropped -3.2% in volume terms. Although China appears as a destination country on INDEC’s website, the institute does not disclose the amounts. Furthermore, as of August 2019, the country cumulated pet food exports for 62,300 metric tons, meaning an additional drop compared to the same period the previous year.

Even though Argentinian pet food exports have been decreasing steadily since 2018, amounts are still sizeable and might represent a path to a future rebound. At this moment, the local companies are struggling with the current economic situation. However, once the economy finds its way, local manufacturers may be ready to accelerate exports, given the rising demand for pet food products from high-growth markets like China.

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