Fisheries Subsecretary Norberto Yauhar is considering putting more funds into the trust backing the struggling fishing industry. (Photo: Stock File)

Govt confirms `financial bailout’ in motion

ARGENTINA
Tuesday, April 21, 2009, 23:00 (GMT + 9)

The central government  intends to "continue with measures tied to fishing’s financial bailout" as long as the international economic crisis endures, stated the Subsecretary of Fisheries and Aquaculture Argentina, Norberto Yauhar, on Thursday.

The government official had been chairing the meeting of the Federal Fisheries Council (CFP) in the Rio Negro harbour city of San Antonio Oeste.

Together with Rio Negro authorities, he evaluated "injecting more funds into the initial trust, so that businesses can leave the product in storage during a longer period, maintain personnel occupied and therefore obtain an added price without going out and selling at cost," he said.

"Many companies were not privy to this benefit because they had to turn to financial institutions, and since they did not fulfil requirements, perhaps because their accounts were in the red, they were not able to take advantage of it," the subsecretary explained.

"For that reason we will try to replicate what happened here in Rio Negro, where a trust fund was created and subsidised by the province, which is, in turn, subsidised by the national government," he added.

A pledge of ARS 400 (USD 105) contributed by Rio Negro and another ARS 600 (USD 157) funded by the national Labour Ministry covers a monthly payment. This is used to pay for a portion of labour wages of the companies that were sheltered by the bailout under the condition that no personnel be dismissed.

Yauhar also met with the executives of the affected companies, who asked him for additional economic aid.

"The reality is that companies are trying to subsist, but in other locations they are looking for new markets and creating products of greater added value to achieve higher profitability," the subsecretary sustained.

Some companies "have begun to enter the American market with fish processed with a special sauce, which are then exported at USD 1,800 to USD 6,000 per tonne, against hake, which fetches USD 1,500," he explained.

Aside from the greater value, one tonne of a special product requires 250 man hours, whereas one of processed hake is equivalent to 60 working hours, he pointed out.

In terms of the South African-backed company Alpesca, of the Patagonian city of Port Madryn, Chubut, Yauhar said he was aware of its "delicate" situation, and that his department was at the firm's disposal to assist with any means within reach.

The Alpesca board is evaluating the possibility of filing a "preventive crisis procedure" before the Labour Ministry of the Nation, hastened by the company’s complicated financial state.

Meanwhile, workers at Harengus and Moliendas del Sud, also located in Patagonia, have carried out strong-arm measures prompted by missed wage payments.

According to the fishing sector, the sector crisis was caused by several factors, among which they cited a shortage of some resources, greater operating costs and dwindling exports.

Yauhar expressed confidence that "a slow and gradual improvement will take place in the fishing sector."

"If the present situation had to be defined, one could say it maintains a delicate balance, and in achieving this, different problems of distinct companies were tackled in a precise way and with different tools, to gain time until the markets are reactivated," declared the subsecretary to Diario de Madryn.

In December, the Argentine government announced it would allocate USD 80 million to fishing sector companies as a pre-financing of exports via a line of credit with the Nation’s Bank.

The industry has since complained that this aid has not been forthcoming from the banking entity.

Related articles:

- Alpesca’s situation worsens
- USD 80 mln in sector aid granted

By Analia Murias
editorial@fis.com
www.fis.com