At one end of the Plaza de Mayo in Buenos Aires, within sight of the Presidential Palace and the National Bank of Argentina, Pablo is discreetly offering passers-by “change…cambio…dollars”.
“You understand this is the “blue” rate, not official,” he explains as we walk down a narrow passage off the main road, “we can give you 15 pesos to the dollar.” The official rate is closer to 9 pesos to the dollar. The daily papers print both rates.
It is tough for exporters to Argentina today – the government tightly controls access to foreign currency. All imports must be approved by the Argentine Tax Authority. Then the importers can apply to buy foreign currency from the government at the government rate. On the other hand, the Presidency will change soon. Elections are coming up in November and all three main Presidential candidates promise to relax or remove the currency exchange restrictions.
The policy is not designed to directly stop imports so much as to encourage Argentina’s own domestic manufacturing and export industries. But Argentina remains dependent on imports, and the government is running out of money to support the double exchange rate.
More efficient lighting technology is just one area where exporters are lining up to fulfil a demand that Argentina cannot pay for, as was evident from talking to business people at the annual BIEL lighting exhibition in Buenos Aires.
, it was the first time exhibiting in Argentina. “Many of the Chinese businesses are here for the first time. We want to explore the market.”
“Argentina is not very developed,” according to Cherry Zheng of Sanag (China), “they don’t show much interest in energy efficiency. Another problem is the government does not have any US dollars. Everybody is waiting for the next government.” Sanag produces LED panel lights and bulbs. LED lights are the latest lighting technology, replacing CFLs (Compact Fluorescent Lamps) which in turn replaced incandescent bulbs. The advantages are energy efficiency and long life.
Andy of Foxsun Lighting was facing similar problems. “Buyers here do not care about energy efficiency,” was his impression. “Argentine policy is that if you import goods, you must export the same amount. Small buyers cannot import anything, and they do not have much foreign currency.”
Cherry and Andy represented just two of the 24 companies from mainland China that were presenting LED lights in the form of bulbs, panels, tubes or ropes.
However Karina Lemma, Managing Director of Grupo Ingal (Argentina) disagreed. “There is a demand for energy efficient LEDs here. We sell them.”
“We have no problem buying our LEDs and lenses from the USA and Greece. We are an Argentine manufacturer and we sell our lighting systems to 100 customers across the country. But we are importing components. It is much more difficult for companies looking to import finished units.”
“There are currency problems here but we can still do business” said Jeffery Shi, head of South America Sales at Woo Jong. “If a company wants to buy they have to apply to the government for an import license, and the government may give them access to foreign currency.” Woo Jong is one of the ten largest Asian lighting suppliers specialising in CFL and LED research.
It was clear throughout the show that LEDs were the main focus. There were Argentine companies presenting a range of lighting which included compact fluorescent lamps and halogen lamps. But most Argentine companies were leading their exhibits with LEDs, and several were proclaiming themselves LED specialists.
” Trading conditions are difficult but not impossible” according to Lior Goldenberg, General Manager of DemasLED, a young company that has been providing LED lighting systems for eight years. “We manage to keep the channels moving, but things take longer. We hope things will improve next year, but it will take some time to normalise import conditions.”
For some, the economic woes are creating new possibilities. “The Latin American market, and particularly Argentina, are very important for us,” explained Technical Support specialist Alberto Zhou from Dahua Technology, a world leading video surveillance designer and manufacturer from China. “They do not have a lot of video security systems installed at present, because of the economic problems. So we see big opportunities if the market opens up.”
In the Kilkenny Bar in downtown Buenos Aires, a few blocks from the financial district, the bar is lined with pumps for Guinness, Beamish Stout, John Smiths Extra Smooth Bitter, and Newcastle Brown Ale. None of them deliver a drop.
“We cannot import these beers unless we export 50% more than we import,” the landlord told me. “We have not been able to serve any foreign beers since 2008.”