by
Julio C. Totero
ASINMET Mendoza
President
- The resources
Mendoza is a province with plenty of resources, but it is not a rich one. The oil has been for years the activity that contributed to the highest sectoral percentage to the GGP, above the 20%. Energy plays a major role in the contribution of resources as well as the non-metal mining, though to a lesser extent.
However, there are strong expectations as regards the growth in the participation of Energy and Mining and the opening- up of new business opportunities.
This possibility that involves the development of renewable energies has aroused great hope for the metal-mechanic industry. Business organizations came out strongly to support this initiative that, currently, has become a state policy. Nowadays, four micro hydroelectric generation projects of Renovar 1 and five more projects of Renovar 2 are under construction and there are also six photovoltaic projects to be developed during 2019. Moreover, the project El Sosneado was awarded for wind generation of about 50MW.
A great debate was opened with the mining sector that ended up in the Dialogue Space called on by the provincial government. It was attended by more than 1,000 professionals whereas the provincial anti-mining sectors did not as they are aware that they have lost the technical-professional debate. This work of more than a year has finished and it is expected that a clear mining development policy will emerge and will also become a state policy. During the year 2018 the reform of the law 7722 was discussed in the provincial senate as well as another bill that proposed the creation of controlled mining parks. However, neither of these initiatives has been accomplished due to the lack of agreement among the political forces which seem to be unaware of the need to move forward quickly with these reforms. The debate over the remediation of the Uranian mine of Sierra Pintada was also held in 2018 and we expect that during 2019 the remediation of these environmental liabilities will be achieved and the exploitation of this project will continue.
Business development has been mostly driven by the oil sector and remains attentive to the development of the provincial south with Vaca Muerta and the investments planned by YPF in distillery.
- The SMEs
To face these challenges, the industrial SMEs and mainly the ones belonging to the metal mechanic sector have to make a great effort. As there has been an important fall in the agro-industrial activities, among others, it is imperative to take advantage of these opportunities.
The industrial framework that the province presents has proved to be competitive over time and to have the technological capabilities to meet these challenges. Manufacturers of capital
goods such as high power transformers, crushers, conveyors, turbines and hydraulic equipment, structures, tanks, electromechanical facilities and services of a wide variety of specialties are part of Mendoza metalworking industry that, through time, was able to project itself to the most diverse local and international markets.
- The State’s task
The State has to articulate local actors, investors and the financial system. Perhaps this has been the biggest deficit in recent times. We have seen how business opportunities for our SMEs have vanished. In this respect, we can say that big metallic structures come from other Argentinian provinces, having local suppliers of excellence. Mini plants for hydraulic generation coming from Europe, whereas there are local companies with strong experience in this field. Galvanized support for solar panels, electromechanical installers, transformers and others. Many local SMEs have missed opportunities vis-à-vis foreign competitors that have more competitive advantages in contrast with our SMEs. Here, there is a high rate of gross income (in some cases it exceeds 5 %) and stamps tax, etc. We do not have a provincial bank to leverage the development as San Juan, Neuquén, Córdoba or Buenos Aires do have. It has not been possible to articulate all the actors to take advantage of these opportunities offered by the energy sector in general. As it is necessary to generate employment, the situation this year will require to act firmly to seize these opportunities and create, above all, an economic development plan.
- The Current Situation
The low level of activity makes it necessary to take particular political decisions resulting in job creation and work for the industrial SMEs. Nowadays, as our idle capacity exceeds 40% there is much infrastructure available, there is technology and there are enough human resources to tackle the development of the energies as a whole. Today, Mendoza’s business sector led by Industrial Union of Mendoza, where ASINMET ( Association of Metallurgical Industrials) plays the main role, has stepped towards the realization of an energy cluster to give visibility to this sector. More than 100 local SMEs participate in this sector with the capacity and will to become part of it. The provincial State is backing this initiative, but much more than this is needed. A strong decision is necessary to develop metalliferous mining and a as well as the understanding of the SMEs logic to drive them closer to the big businesses. It is essential to give support to the development and understand that the best way of learning is doing things; nobody learns watching only how others do business. The situation is difficult but the solution is part of the “Revolution of the Simple “, as the Governor of the province says.
