Over the past year, major consumer electronics and home appliance products have held steady, measured in units. This arises from a report by the Association of Argentine Terminal Electronics Factories (AFARTE), which assures that the cell phone market remainedin 10.6 million units against 10.5 million in 2021, and the air conditioning was reduced from 1.4 million in 2021 to 1.1 million in 2022.
The exception was the television market which, driven by the Qatar 2022 global effect, increased its production from 2.8 million units to 3.2 million.
Despite the crisis, the electronics industry maintained its production
In this context, the market was affected by international conditions of crises caused by the Russian invasion of Ukraine; a strong restriction on the approval of import licenses for imported products; the deepening of restrictions on importing finished products and the regulation of input imports through SIMI and SIRA mechanisms that delay income.
Although the activity in the productive sector was maintained, it was warned an uneven performance between the main categories and general stability was sustained through official programs such as “Ahora”.
The global effect, and the good sports performance of the national soccer team, generated a very strong “sell out” of the products of leading companies, both in stores and in e-commerce traffic, within a context of prices that rose below inflation.
Added to this, the dollar gap caused household appliances to be at reasonable prices and that the consumer understands the purchase of household appliances as a good destination for surplus pesos.
The “World Effect” increased TV sales from 2.8 million units to 3.2 million.
Newsan’s strategies to deal with the crisis
From this context, the Newsan group, one of the main competitors in the market, is working on the preparation of a business plan for this year that allows a favorable evolution of sales and economic results.
In fact, expects similar sales to 2022, in a scenario of greater competition in the sector and taking into account aspects that will influence the internal market for consumer electronics and household appliances such as inflation and the evolution of real wages.
This emerges from a document sent by the company to the National Securities Commission (CNV) that also warns about “the degree of uncertainty caused by the political context economic and that can influence the behavior of demand”.
In the same way, it describes as a “milestone” the extension of the promotion regime for the Argentine electronics industry “which provides an unbeatable framework of predictability for companies, as well as advantages for the final consumer.”
Also remember that as of this year new rates of internal taxes applicable to the sector are effective, establishing that are reached with a rate of 19%; except when they are manufactured by companies benefiting from the Law 19,640 regime, as long as they prove origin in the Special Customs Area, for which the rate will be equivalent to 50% of the general rate, which is equivalent to 9.5%.
Regarding the plans, Society bases its expectations on six strategic pillars:
- Process of consolidation of the industrial structure based in Ushuaiawith an increase in production capacities and an increase in automation.
- Development of the industrial structure of Buenos Aires plants.
- Platform as a strategic partner in Argentina, main local partner of international companies who intend to participate in the Argentine market.
- Increase of exports through Newsan Food, of the volume of fishing and development of new aquaculture projects.
- improvement of customer experience.
- Programs of digitization and automation of its processes.
Newsan projected a plan with six pillars, including the creation of new products.
“Newsan will continue with a strong development of new products with our final consumer at the center, and productive investments will be implemented in our industrial plants in Ushuaia and Buenos Aires”, add the document.
In the case of the Ushuaia plants, production maintenance is estimated with an industrial redundancy scheme and increased automation.
In reference to the new production opportunities, it will continue to develop the dynamism imparted in the plants located in the province of Buenos Aires, expanding the line and volume of products to be produced.
“In particular, during the 2023 We will reinforce our offer in mobility products and servicesdeepening our line of motorcycles with internal combustion and electric engines,” the report states.
Strengthen alliances: the central objective of Grupo Newsan
Newsan will continue to work for strengthen its role as a strategic partner of international brands, and position itself as the local partner chosen by the main technology companies in the world.
“In that sense, we offer local knowledge and track record, cutting-edge manufacturing capabilities, strong supply chain capabilities in both logistics network and warehousing and distribution, strong financial capacity, quality assurance and a wide range of certifications, extensive network of relationships with key players in Argentina (Government, unions, business ecosystem) and contracts adapted to the requirements of each international partner,” the paper highlights.
Among Newsan’s new goals, strengthening alliances with the Government, global brands and unions will be one of the keys.
Based on that strategy, will continue to deepen its relationship with Motorola to establish itself as one of the leaders in the cell phone segment and with growth expectations, with the simultaneous launch of new cell phone models worldwide. It will also deepen its lineup of new Motorola-branded products.
Regarding LG, it will follow a similar policy, deepening the relationship, “building and expanding our product line, and exploring new categories and other industrial products where LG is an international leader.”
In the case of Whirlpool, the goal is to launch new categories, while for the fishing division that carries the Newsan Food brand, it hopes to increase the volume of food export business.
In the same way, it will adopt a product diversification approach, continuing with the new aquaculture business started towards the end of 2021, projecting increase the production volume of mussels in Tierra del Fuegotaking advantage of its export “know how” and synergies with its client portfolio in the more than 70 countries to which it exports.
“Argentina is one of the countries with the greatest potential for aquaculture production, and the development and promotion of this type of production is a strategic decision of the group,” Newsan highlights in his document. In this sense, the project not only seeks to develop exports and the opening of international markets, but also to supply the internal market, generating work and substituting imports.
About, The company estimates to carry out the first harvest of mussels in the middle of the year, for sale during the second semester.
Newsan will continue to strengthen its role as a strategic partner of international brands and position itself as the local partner of choice.
Newsan seeks to diversify its portfolio
In the document, Newsan highlights that it is “continually” studying new business development opportunities and diversification of its portfolio, directly, or through its associated companies.
In this sense, he anticipates that will continue to try to boost the export businessas well as entry into industrial sectors where it can generate value.
In fact, it has already presented various projects for the Fund for the Expansion of the Fuegian Productive Matrix and its executives are in dialogue with the authorities of said entity for its final approval, which could occur in the first months of this year.
The growth plans are complemented by a cost reduction strategy to maintain the company’s operating efficiency, developing multiple control programs, and continuing to strengthen the management system through new certifications.
