Argentina: Transnational Grupo Gloria closes the San Isidro mill in Salta

Reckoned as a major main source of employment in the Campo Santo locality, 59 km from Salta city in Salta province, the San Isidro mill was closed overnight on 20 January by the Grupo Gloria, a trans-national company based in Peru.

The close to 800 directly employed workers were informed through a sign posted on the factory that the company had submitted a crisis intervention program to the Ministry of Labour and was to cease activities while their submission was evaluated. Company spokespersons, however, added that their decision was final. The San Isidro is the oldest mill in Argentina and has specialised in producing organic sugar shipped to Europe, United States, Japan and Canada, among several destinations.

On 29 January, the governor of Salta met the board of directors of Grupo Gloria in Lima, Peru, where, according to the media, the company presented a “detailed” report about the San Isidro’s situation and offered to explore all options to ensure its profitability and to continue operating in Salta. According to reports, the company pointed to three factors leading to the closure: low sugar prices, unfavourable foreign exchange rates, and high labour costs. The latter is the other side of the coin as the SOEASI, the union that represents San Isidro employees, says that closing the mill is a strategy to pressurise unions and workers before the upcoming bilateral negotiations in the sector, and that there is no real financial reason behind it.

The SOEASI has submitted a proposal for the expropriation of the San Isidro to resume operations and maintain employment in Salta province. It followed a massive demonstration against the decision to close the mill.

The San Isidro is listed with some 3,500 hectares under cane and a factory with a daily processing capacity of about 3,500 tonnes of cane. The Grupo Gloria acquired 60 percent of the San Isidro in 2011 through the Corporación Azucarera del Perú SA (Coazúcar).

Coazúcar is part of the Grupo Gloria, which operates in several countries, including Peru, Bolivia, Colombia, Ecuador, Argentina and Puerto Rico, covering the dairy and food sectors, paper, agroindustry, transport and services.

In Peru, the Grupo Gloria controls over 50 percent of the country’s sugar production, with perspective to continue increasing their participation, as result of an explosive growth in the sector since 2006, through Coazúcar. According to Peruvian media, 99.9 percent of Coazúcar is owned by the Panama-registered Clarcrest Investments SA, which in turn is wholly-owned by another Panama-registered company, the Maningham Holding SA. The latter, report the sources, is owned by two Rodriguez Brothers on a 50/50 participation. The Grupo Gloria is also known as Grupo Rodrigues, because of the family name.

Background information

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