Ternium’s CEO attended the 35th Annual Convention of the Argentine Institute of Finance Executives (IAEF) in Mendoza, Argentina. He spoke about the “Industrial Development and value chains” in Latin America and stressed the threat that China represents for the industry in the region.
Last 11 and 12th of September, one of the most respected entrepreneurial congresses in the country was held, the Annual IAEF Convention. Civil servants, legislators, economists and businessmen were present, gathered under the topic “Analyzing the future: Continuity or change”. There, Daniel Novegil spoke in a panel focused on “Entrepreneurial Innovation”. He emphasized the importance of the industry in Latin America and warned about the deindustrialization the region has been suffering for the last 10 years, mainly due to the advancement of Chinese imports.
According to Novegil, from an industrial development standpoint, “Latin America is an interesting region to conduct business and is demographically well compared to any competitor in the world”. However, in the last 10 years, Latin America focused on the primarization of its economy and thus generated a downfall in the industry. Daniel Novegil explains that Latin America is importing around 75 billion dollars in metal-mechanic goods per year from China, consequently generating a great impact on its industrial and employment structure. “We are going to end up selling primary products to China and buying manufactures from them, which is not sustainable for development”, he affirmed.
Daniel Novegil also pointed out that China is considered a threat due to its breach of international trade rules, since “one out of four dumping cases brought before the World Trade Organization (WTO) belongs to China”. For this reason, “China is an interesting phenomenon, and we should be careful when building a relationship with them”. Daniel Novegil claimed that Latin America’s challenge to confront the Asian giant is to foster economic productivity and diversify industrial goods offer.
To achieve this aim, gross capital investment is vital. While China destines 32% of GDP in the industrial sector, Latin America barely invests 14%. Novegil highlighted the fact that the manufacturing industry should be developed in Latin America due to its positive influence on employment. “Manufacturing involves hours of technical work, engineering, research and development, and higher levels of cultural and educational aggregation than primary goods production. This is our target”.